Recently, while walking through Divine Estate, Amuwo Odofin, Lagos, I observed the parking lot of a private school in that vicinity. I counted about seven buses parked within the compound. These buses were parked because the school is currently on vacation (3rd term holiday). As a typical Igbo Man, I began to calculate how much revenue those buses could have been generating if they were deployed on the roads during this holiday.
Recall, the holidays started July 12th, 2019 and most schools will reopen 9th September, 2019. This means we are talking about 60 days (approx.2 months) with those buses being idle. Apart from the holidays, weekends and public holidays, those school buses are also idle generating zero revenue. Come to think of it, we are talking of some brand new Toyota Hiace buses with market value of between N18 million and N22 million sitting idly for 60 days. Some of them that were bought fairly used may have market value of between N5 million and N10 million.
I reflected on the reasons why most private schools choose to own school buses and the reasons include:
- To ease the transportation problem of their pupils who probably come from far distances.
- To advertise the school within the vicinity of the school’s target market.
- To ensure the safe delivery of the pupils to their parents by a system they can trust and have control over.
- Most parents specifically request for this service as they do not have the luxury of time to do such school runs.
- This is a means of revenue generation for most schools when managed properly.
However, on a Facebook group of school owners, many of the school owners complained bitterly about managing their own school buses. These are some comments from them:
“Maintaining a school bus is a headache on its own…”- I.O
“I have parked mine for the past two years. Am healthier. Drivers and mechanics were my major headache. I told myself I was too young to come down with high blood pressure.”… E.O
“It swallows up the school finances. You end up spending school fees to fuel the car.”…R.B.J
Other observations from the comments include:
- The school bus drivers colluding with mechanics to inflate cost of maintaining the vehicles.
- Parents complaints of poor service by either the bus drivers or late arrival of the drivers.
- Multiple taxations from local government revenue collectors, etc
- Excessive cost of fuelling the vehicle which ends up not adding up when compared to the revenue generated
- Parents’ resistance to pay new rates that incorporate the high cost of running the school bus.
Since these schools are not transport companies, I make a case for them to outsource these buses. Transport tech startups can fix this market friction. For one thing, these schools already have the buses. The major thing they require is a system to effectively manage these buses and generate more revenue from these buses. Instead of allowing these buses lie idly during the holidays and weekends, they can be aggregated to be used for school runs during the school hours (peak period) and holidays and weekends (off-peak period).
Instead of having more than ten different schools buses deployed to Ago Palace way for instance, you can have say 5 buses dropping off students at each of the partner school during the peak period. The transport tech company can track the movement of all its buses and know where to quickly deploy more buses especially during the peak period (6:30am -8:30am). The same pattern will definitely happen during the closing period (2:00pm-4pm). During the off-peak period in between,the buses can be utilized intra-city so that it would be easily available for the school closing time. Holidays and weekends afford the buses the opportunity to be used both inter-city and intra-city for transportation.
One of the issues that any startup desiring to go into this niche market should put as top priority is the safety of the children onboard the buses. It should be able to design a tracking system whereby these buses safely deliver the children to their parents. With the rising cases of kidnapping in our society today, such tech startups should be able to assure both parents and the schools that the safety of the children is assured.
Most times when I pass through Doyin bus-stop, Iganmu-Orile around 7:30am to 8:00am on weekdays, I see a good number of pupils trying to board tricycles (keke) to their various schools. The same situation plays out on Babs Animashaun Road by Gate. This makes me to wonder why Zido(the Keke aggregator) is not keying into this opportunity. Its aggregated tricycles could work with private and public school authorities to pick and drop these pupils to and fro school. At the rate of N200 (N50 per passenger), they could do 10 trips between 6:30am and 9:00am and the same average between 2pm and 4pm (closing time). This can generate N4000 per tricycle within the school rush period on such routes as Doyin to Masha, Doyin to Shiita, Doyin to Eric Moore, Gate to Shiita, Gate to Eric Moore,etc. The revenue generated could be more if the parents choose the option of having their children dropped at home rather than the bus-stop.
As the new school year begins in few weeks time, I believe that transport tech companies can explore the market opportunities of transporting schoolchildren across our major cities with their securities assured and revenue generated for both school and the companies.
PS: Names have been abbreviated to hide the identity of the commenters.