Jul 14, 2015 · 11 minutes

It’s rare that I hear a pitch for a company that I know is absolutely solving a huge problem felt by millions of Americans.

A universal problem that many of them would pay nearly any sum of money to solve. A product that I would quite likely use myself. And yet, one where I still have to wonder how on earth this can be a scalable, venture-funded business.

Welcome to the burgeoning industry of kid-haulers: A vertical within a vertical that has at least three promising companies that I know of, including HopSkipDrive which announced its funding today. More on that in a moment.

What is the “kid-hauling industry” other than a term I just coined?

It’s the cluster of companies that offer various kid-friendly ride-sharing alternatives. Once upon a time, I knew parents who would toss their kids into Ubers without a care in the world. There were even reports that Uber was actually working on a service specifically tailored to parents sending their kids places.

And then the gates of Uber PR hell opened up, and parents felt a lot less safe about someone who may or may not have been a convicted felon taking their kids to soccer practice. The easy Uber justification of “Hey! We think cabs are even worse!” was hardly a comfort when it’s the thing you love most in the world getting in the back seat of the car.

Enter Shuddle, which was founded by Nick Allen, who also founded early ridesharing pioneer and also-ran Sidecar.

Enter Kidsanity, which pitched at Pandoland last month and was one of my personal favorites.

And enter HopSkipDrive, which is based in LA and has just announced $3.9 million in funding led by Upfront Ventures.

These companies are all solving the same problem: Driving multiple kids to activities, playdates, school, and everywhere else is a full time job. For two parents who work, it’s near impossible, but no one wants their kids to miss out on activities because of logistics. Modern urban parents frequently don’t have local family members who can help. Nannies and sitters are options but if they aren’t full time, they come and go, and call in sick. Carpools are another option, but if you are the mom who always asks and never reciprocates, that can get awkward fast. And that’s all a working parent needs: More guilt.

Parents feeling this pain will absolutely pay for a service that solves it. But will they trust their children with it?

All three of these companies think so, and they take that responsibility very seriously. HopSkipDrive -- which was started by three moms-- takes safety measures further than anyone has so far. Both Shuddle and HopSkipDrive require that all drivers have years of child care experience. HopSkipDrive requires five years of experience. HopSkipDrive also meets each driver in person, has a licensed mechanic examine their cars, does monthly DMV checks, and says it’s the only ridesharing company that does fingerprinting and TrustLine certification, in addition to a full battery of background checks. HopSkipDrive also uses a product called Zendrive to monitor whether drivers are talking on their phone or texting while kids are in the car.

The service is designed for kids aged seven and up, and the drivers also have booster seats for kids on the smaller size, per California law.

Like Shuddle, HopSkipDrive requires parents to schedule a ride the night before and show pictures and names of the person who will be picking their kids up. Drivers on HopSkipDrive walk in to meet the kids and use a code word before getting in the car. Parents can monitor the entire ride and a member of HopSkipDrive’s support staff monitors each ride and is available for talk, text, or email with parents at any time.

HopSkipDrive and its investors make much of the fact that unlike Shuddle, it’s founded by three moms, not a young, single founder who sees an opportunity in the market. Joanna McFarland is a former investment banker who has spent ten years working in LA’s tech scene. Carolyn Yashari Becher is a lawyer. And Janelle McGlothlin has worked at several startups and founded WriteBrand, a branding studio for large companies. They quit their jobs in August of 2014, launched a pilot that November, and then launched the beta this past March. Since then HopSkipDrive has facilitated thousands of rides and has over 100 drivers on the platform.

Between them, the founders have eight kids, aged four to twelve. They are the market. And angel investors like Joann Wilson only reinforce that this is not a company that will take shortcuts with kids’ safety.

Authenticity is always a plus, but considering how similar many of the features of the two services are, I’m not sure that’ll be the X-factor that makes one more successful than the other. Frankly, the two probably won’t compete for a while: HopSkipDrive is in LA and Shuddle is in the Bay Area, and the slow, deliberate, expensive plan for being so safe means national expansion will be slower for these companies than traditional ridesharing giants.

As I wrote about Shuddle months ago, I love this angle on the business. It’s an obvious problem, and Uber is obviously not the solution. I am all for anything on the market that means parents won’t risk putting their kids in Ubers, because I know plenty of parents who still do it now.

But I have concerns as a mom/potential customer and concerns as a business reporter. And they’re basically at odds with one another.

Let’s deal with the mom side of me first:

Despite all of these safety assurances, I’d still be nervous. I am still nervous booking through Urban Sitter, which is also founded by moms and promises extensive background checks and family references. I can’t suggest a single safety feature that HopSkipDrive hasn’t thought of, but as this company scales it’s just the law of averages that something bad is going to happen. And that’s not a worst case scenario I’m comfortable with when it comes to my kids.

That said, my kids are two and three. The service isn’t designed for them. It’s plausible that when they get to age 8 or ten, and have far more places they need to be, those worries ease. It’s also possible that given my past with Uber, I may carry more ridesharing baggage than the average mom.

But the point is, HopSkipDrive and Shuddle can never have an Airbnb Meth Head Moment because the downside of something happening to your kids is so much greater than your car or your home or even yourself. That’s a huge burden for a fast growing company that flies in the face of Silicon Valley’s standard “We’re just a platform!” defense. It will weigh on every metric investors want to see from a startup. So for Shuddle or HopSkipDrive to be a service I’d trust with my kids lives, it would have to fly in the face of all of my experience as a tech reporter covering fast-growing disruptive platforms.

I’m a lot more comfortable with the approach of Kidsanity than either Shuddle or HopSkipDrive. LA-based Kidsanity, which was founded by dads and is currently trying to raise money, doesn’t rely on strangers to pick up your kids; it relies on your own community. It’s not meant as a permanent solution, but rather a way to fill the gaps around childcare. It compensates other parents on the soccer team or at school for picking your kids up, watching them for a few hours, or various other “favors.”

The thing I like about Kidsanity’s approach is that it automates something that already happens in the real world. HopSkipDrive and Shuddle are really introducing a new solution to an old problem. That may well mean that HopSkipDrive is more scalable-- they only have to find new drivers, whereas Kidsanity has to sign up whole schools and teams so that all the parents opt in.

The judges at Pandoland -- particularly Bijan Sabet of Spark-- didn’t like that Kidsanity included monetary compensation for parents doing a “favor” for other parents. August Capital’s David Hornik was Kidsanity’s mentor and strongly disagreed, saying well-off VCs don’t understand the very real costs to picking up someone else’s kid and feeding them mac and cheese. I agree with Hornik: As a mom, I want to reward parents who do me a favor so I’m not always the leech. It makes the ask easier. It might be a nice feature to give parents the option of donating their Kidsanity cash to the school or team that unites all the parents instead.

But back to HopSkipDrive. If my kids were old enough now and I could get over the fear-factor, I’d use HopSkipDrive a lot like I use Airbnb. I’d find a driver my kids and I like and then try to hire him or her on the side to pick up my kids outside the service. I’d still keep my account current in case of emergency, but I’d constantly be trying to find a way to introduce more consistency.

McFarland doesn’t think this will be much of a problem for the site. “You lose all the benefits like insurance and live tracking when you go outside the site,” she says. Maybe. That wouldn’t convince me. I’d rather have a one-on-one relationship with caregivers every time.

My concerns as a reporter are the opposite of my concerns as a mother. I worry about any of these companies scaling given the costs and incredibly high bar for adding drivers to the system. Every step they take to reassure concerned parents like me means they grow slower and more expensively. Profitability will rely on services like these becoming part of a parent’s regular routine. And as I mention above, if I were a user, I’d be keen on disintermediating it and basically treating HopSkipDrive like another Care.com. Which begs the question: Is this a business that could work better underneath the umbrella of a service like Care.com?

I also worry that Shuddle and HopSkipDrive will have a very real chicken and egg problem with supply and demand, requiring a higher marketing budget for bonuses and discounts -- all things that add to the cost of rolling the service out widely. Even Lyft has had a hard time in smaller markets after riders download the app and can’t regularly get a driver on the system to come get them. The fact that these services schedule rides the night before helps, but there need to be enough parents that it’s worthwhile for drivers and enough drivers that parents see it as a reliable solution.

That said, the services say they won’t really compete for drivers with Uber, Lyft, and Postmates given the required childcare experience. HopSkipDrive says it’s looking for caregivers more than drivers. Both sites boast that the bulk of their drivers are women-- unlike nearly any other ridesharing service-- and many are single moms who do pick ups and drop offs with their own baby in the car. “Before the only way she could make extra money was to sell Mary Kay or Stella and Dot,” McFarland says.

I think that’s mostly true, but I also have plenty of Lyft drivers who are single dads trying to make extra cash. Ultimately, the rate at which Uber and Lyft are trying to hire drivers means everyone will compete with them somewhat. But people who want to work with kids and have routes planned in advance will self-select into a service like HopSkipDrive. People who want more velocity of rides and prefer dealing with, say, drunk twenty year olds, won’t. McFarland says drivers make $30 an hour on average.

It can work. And I hope all of them do. I am all for anything that helps working moms be there for their kids without an argument of whose career is more important every morning at breakfast. Unlike a lot of startup ideas we see, this is solving a huge problem, people are willing to pay for it, and it’s a net good in the world.

But it will require patience, perfect execution, a rigorous eye on cash flow and unnecessary expenses, and insanely patient investors with incredibly deep pockets. That just might give Shuddle an edge being based in Silicon Valley. (So far it’s raised more than double what HopSkipDrive has raised.) It will require building a company in a way that almost no Silicon Valley entrepreneurs build companies.

Fortunately, the companies aren’t naive to this. Allen talked about this at our “Don’t Be Awful” festival earlier this year. And McFarland notes that that’s one reason she raised money from investors who are also parents and who get that you can’t cut corners on a service like this. It’s also why HopSkipDrive raised such a hefty seed round of nearly $4 million. I wish them luck threading the incredibly tiny needle that balances growth and safety. But I’m glad my kids have another four years before they are eligible to use it. I’ll be watching closely.