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Comment by bell-cot | Hacker News Reader

Hmm...buses that (per the article) cost 2x or 3x what diesel ones would. From a company that's raising a whole lotta $$$ from VC's. And (plausibly) school districts will get rid of their old diesel bus fleets when they switch over...

Is anyone else suspecting an "of course we'll loose money like crazy, until we hit 'em with the massive price increase" business model?

EDIT: Wow, huge response. 3 points to add:

- Yes, kids not breathing fumes is better...but that doesn't change the company's nor the school district's finances.

- No, I have no good data on whether the "vastly lower TCO will cover the higher up front cost..." theory is 100% correct, or utter BS.

- My one not-too-close data point: A friend worked for a metropolitan bus system ~2011. She said they were getting rid of their "~1.4 up-front cost" diesel-electric hybrid buses - because the real TCO was considerably worse than the older, straight-diesel buses.

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This is a fairly standard reframing when your product has lower TCO but higher upfront costs.

If people just look at the upfront cost, they have that 2x or 3x gut reaction and just switch off.

Some nerdier types might draw up a spreadsheet and know exactly how many months they'd expect to break even and start saving.

People familiar with spreadsheets probably also don't have that much trouble getting loans and paying them back on time, and doing even more sums to see if that makes financial sense.

But your average school bus buyer perhaps needs someone else to do all that for them, hedge the risk and present it to them as an immediate saving on their monthly spend.

People have sold rooftop solar this way, or replaced kerosene lamps in Africa with solar and batteries, and EVs Vs monthly Car payment plus fuel.

I'm not sure why you would assume that the average school bus buyer can't do a spreadsheet. Our local suburban NY school district is fairly run-of-the mill, and has a budget of $84 million with several million dollars of that being for transportation. We have our own busses and drivers, and they spend about a quarter million dollars a year on diesel fuel.

The Superintendent for business affairs that has an MBA from Columbia and earns $231,000, and should clearly be able to handle a spreadsheet and then making the yearly powerpoint presentations.

It was more a general point, and I did say 'perhaps', which was based on reading a headline that said "get EV busses for less than your monthly spend" rather than "EVs have lower TCO" which is the pitch I'd use for the more sophisticated buyer.

But maybe in this case, the buyer needs that sales pitch not for themselves but for the people who would be angry if they did something financially sensible with future payoff.

As much flak as people give "the government" for poor spending, there's actually a huge amount of auditing and checks in place for purchases by officials.

There's no way a decision like this gets made without a several "independent assessments" happening as a CYA move.

The administration of the Roslyn school district ripped off tax payers for years. While it was caught it took awhile to discover:

https://www.vanityfair.com/hollywood/2019/09/hugh-jackman-mo...

It's not just the cost over time, it's the availability of capital in large clumps - also known as "the cost of being poor:" It may be 5x cheaper in the long run to pay 3x the cost today, but if you don't have 3x the cost today, well, good luck.

Capex <=> Opex swaps are pretty common, and it's not just a matter of poverty. (It's why airlines lease their planes.) Swap "subscribe" with "lease" and this article becomes less interesting.

> Swap "subscribe" with "lease" and this article becomes less interesting

To VCs, too

Yeah, and school's budgets are cash tight, with comparatively little ability to fundraise, so any large cash transaction will be DOA.

The swap should take place, and I'm now wondering why this hasn't occurred.

Schools often issue bonds to cover large purchases. Plus, sometimes states/fed will toss them grants.

It's interesting to see how different bond proposals are received by the public. In the more conservative areas I've lived, adding a penny to the sales tax to fund school bonds is pretty much always approved by the voters and renewals are likewise rubberstamped. In liberal areas, that's a much more difficult tax to get passed, mainly on the grounds that it is regressive. School bonds secured with increased property taxes tend to work in the reverse, with property tax increases being popular in liberal areas but opposed in conservative ones.

>This is a fairly standard reframing when your product has lower TCO but higher upfront costs.

I'd say it's the opposite a lot of times. EVs are one such product. People will say, "sure I'm paying 20k more for the car, but I'll make it up in fuel savings and zero maintenance!" without ever calculating how much fuel and maintenance you'd actually have to use to break even. Then, of course, there is the regulatory and temporal risk that energy costs today aren't what they might be down the road, and that there are some high-ticket items an EV can have fail itself.

It's hardly ever a no-brainer, because the invisible hand tends to make it so.

>People have sold rooftop solar this way

So many companies have gone bust because of this.

School buses are bought by spreadsheet literate people. Understanding lifetime cost is a job requirement of the kind of people who run bus fleets and most people are qualified to do their jobs and do them satisfactorily.

This isn't a case where a good product isn't succeeding because "hurr durr the public is dumb". People have run the numbers. It just doesn't work, yet.

I want to see that spreadsheet.

https://afdc.energy.gov/files/docs/vice-beb.xlsx

While not ideal, the alternative is kids continuing to sit in buses that idle for long periods of time slowly leaking diesel exhaust into the cabin area (at least that was the case with the Bluebird models I rode as a kid), that can't be good.

I think it's important to keep the electrification and subscription aspects distinct.

Electrification of bus fleets is an absolute good. Electric buses may cost more in the short run, but for the sake of children's health, not to mention the world they live in, school districts should be dumping diesel in favor of electric as soon as they can afford to do so. As taxpayers we should be ready to foot the bill.

There are real concerns with privatization of school bus fleets though. Safety obviously, but also advertising and marketing to children as other posters have pointed out. If a company offered school districts a subscription model with diesel buses we'd be rightfully suspicious of where this could lead. We should maintain these suspicions even as we encourage phasing out diesel fleets in favor of electric.

School bus fleets are already significantly privatized[1]. Not making judgement calls there, just pointing out that ship has sailed.

[1]https://en.wikipedia.org/wiki/First_Student_(United_States)

Yea, here the batteries catch fire and a bunch of kids burn to death. Grim, but possible.

ICE vehicles have orders of magnitude higher fire risk than EV. https://www.kbb.com/car-news/study-electric-vehicles-involve...

Right, because diesel buses are totally not flammable at all.

I bought a number of plastic "jerry cans" that all had stickers on them saying you shouldn't use gasoline or diesel to start fires.

Oddly the reason why is different for the two fluids. Gasoline can catch fire quickly and form a fireball, whereas diesel is hard to ignite and won't help start a fire.

This movie

https://en.wikipedia.org/wiki/The_5th_Wave_(film)

has a scene where the kids set a school bus on fire with the fuel which isn't realistic.

https://www.youtube.com/watch?v=7nL10C7FSbE compares the flammability of several types of fuels.

2m08s for Jet-A. 3m50s for #2 diesel. 6m03s for heating oil. 7m30s for kerosene (all those are basically the same and surprising to most how not flammable they are in liquid form). 10m15s for avgas. 11m30s for auto gas.

That's some bullshit video.

All you need is some tissue and a gas soldering iron or equivalent lighter. Lights up in under one second.

Back in the day we would make ‘firebowls’ with a metal bowl and burning various liquids, igniting it with a long lighter. We would burn everything from gasoline to corn oil that way.

Not likely, not without being in a serious accident. Despite the Chevy Bolt's highly publicized battery fires (which did not kill anyone), EV batteries don't usually burst into flames unprovoked. The battery will be well protected in a school bus frame.

Fire risk is a major reason why we already put as many as 8 or more emergency exits on full size school busses.

https://youtu.be/J6eS6JzBn0k Lithium-Ion Battery Fires in Electric Vehicles - Safety Risks to Emergency RespondersNTSBGov

Thermal runaway, stranded energy and battery reignition should preclude EV usage to transport children until adequate safety measures are put in place. EV car fires are intense, high voltage and severe. A bus full of children fire doesn't bear thinking about.

Ever been near a car fire? They burn pretty well and you'll feel it from the other side of a multilane road. I've also seen buses burn. Is there a reason to think that more kids are going to burn in electric busses than ICE ones?

Ever been near an EV fire?

They burn with the equivalent of a 220v welder across the whole battery skateboard, will literally melt aluminum wheels and body parts and require 20 tons of water to temporarily extinguish. There's a huge difference between an ICE vehicle fire, which is essentially rubber, upholstery and plastics burning sometime compounded by gasoline vapor and an EV thermal runaway trapped energy event. I think all EVs should be required to have manual escape locks etc at a minimum. https://youtu.be/J6eS6JzBn0k

It's incredible to me that EV enthusiasts are such zealots they refuse to take into account the facts around practicality, pollution and fire risk, just choosing to downvote instead.

A demonstration of a gasoline vs battery fire https://youtu.be/tuVxwmnhqP4

That's a demonstration of a $99 harbor freight flux core welder, not a "battery fire"

This is a EV fire: https://www.youtube.com/watch?v=CdaFk3w6rUY

And this is a diesel school bus on fire: https://www.youtube.com/watch?v=0nPrUdP_POg

If any vehicle catches on fire, you have to leave the vehicle, or risk death. There is no "safe fire"

Again, I suggest you digest 'Lithium-Ion Battery Fires in Electric Vehicles - Safety Risks to Emergency Responders' from the US NTSB which is analysis of types of EV vehicle fires. https://youtu.be/J6eS6JzBn0k

The 220v mig welder example was to demonstrate the different fire characteristics of a trapped/runaway energy battery fire vs gasoline fire. All commercial vehicles such as school buses have a significant fire risk from hydraulic fluids used for brakes, steering etc.

Here is is a refuse truck hydraulic fire example https://youtu.be/aj8-JlRqoWc

The dramatic bus fire you found was probably a combination of that and upholstery. Diesel is much less flammable than gasoline, one of the reasons for its use in commercial vehicles. https://www.anl.gov/article/7-things-you-might-not-know-abou...

Again, a major concern for me is the over reliance on electric door locks in EVs, which have trapped Tesla drivers who then burnt to death in high voltage fires. https://www.independent.co.uk/news/world/americas/tesla-driv...

Manual locks would be far safer, especially on school bus full of children. I am not opposed to EVs but I do feel there is a very unrealistic utopian view of their strengths while completely ignoring weaknesses, mostly due to massive public relations persuasiveness.

My point is that both will kill. There are, of course, some differences between fires of different types. However, one thing remains constant: the occupants can be killed by any of them if they don't get out.

I definitely agree that manual locks are safer -- school bus emergency exits don't even have locks, they simply only have latches on the inside. This isn't a problem with batteries though -- this is a problem with Tesla.

>That starts with phasing the purchase and deployment of electric school buses — which still cost two to three times more than their diesel counterparts — to take advantage of expected declines in cost over the coming years, McIntyre said.

Sounds like the model is to be the first mover and being entrenched by the time it's profitable without a price hike

The "subscribed" buses will be privately owned and operated, they'll be increasingly filled with advertising and other predatory bullshit for exploiting the passengers.

I think that's pretty unlikely, at least with schoolbuses. The US has laws around child privacy and advertising that companies easily flaunt online, but are much more difficult to flaunt when your product is a physical bus.

OTOH, I would not be surprised to see these buses rusting in a storage lot within a decade because these firms have closed up shop and some random server somewhere is no longer responding to requests. I hope (but am not hopeful) that municipal and state governments take measures during procurement to ensure that they aren't being turned into captive customers.

Captivate screens behind each seat with 'educational' content and pre-roll/banner ads. "We're giving kids extra education through new technology and they also learn about the value of chocolate sugar milk at the same time!"

In the '90s the dairy industry managed to get "got milk" posters into approximately every US elementary school.

Milk was my one true vice. Swear the stuff is more addictive them anything. Yes I’m boring.

Spent many years thinking it was healthy. Much regret.

I always found it sort of disgusting, but as an adult discovered that 1 tablespoon of Valhrona powdered cocoa, 1 tablespoon of Equal Exchange baking cocoa and 2 tablespoons of sugar in 1.75 cups of grass-fed organic whole milk deals with the bad part.

Was that through private businesses, or through the government?

In my school district, the milk producer just gave a slight discount on the milk they sold to the school. They were still making a profit, just slightly less per unit (and presumably more overall since sales went up).

The average lifetime of a schoolbus is 10 - 12 years, so if they do manage to keep this service going for a decade, that's pretty good -- in 10 years the schol district would have been ready to refresh their fleet anyway, and hopefully the reason this business can't survive long-term is that electric buses become cheaper and ubiquitous.

Part of the reason for the 10-12 year lifespan is that ICE motors are really complicated and at a certain point, it's cheaper to throw out the bus than pay for motor repairs. EV motors last a lot longer and are a lot easier to maintain.

Are batteries going to last this long? And batteries are usually 50% of the vehicle price.

They should really be leasing the batteries and buying buses having easily swapped batteries conforming to a standard a competitive power systems market can cater to.

Rather than throw them out, I'd say there's an optimal point to sell them off. (A couple of years ago, I bought a bus that was sold by an institution when the mileage reached a certain point.)

The electric motor might last, all the electronics, probably not.

Don't forget a snack machine with sweets right inside the bus.

Or... A cold drinks machine, with all the bus windows locked shut. I'm sure I remember something about McDonalds putting more salt in the chips [/ food] so people buy a drink.

>they'll be increasingly filled with advertising and other predatory bullshit for exploiting the passengers

What's this based on ? AFAIK many school districts already contract out their school bus service. Are we seeing that in those cases?

“You’re only two bus rides away from your next Robux reward!”

So like city buses?

Not really, no. City busses recognize revenue from advertising and use it to subsidize fares. Being a public service, the public benefits. On the other hand, private bus fleets with private advertisements on loan to school districts will recognize that advertising revenue as profit, benefiting shareholders. Not everything needs a profit motive.

I don't know what the split is elsewhere, but it's worth noting that for BART in the Bay Area, at least, makes something like $10m/yr, compared to nearly $500m/yr in actual fares - so, in exchange for approximately 2% of annual revenues, we get BART trains and stations covered in ads.

Edit: Thought to look this up for SFMTA - 2020 proposed budget (projections as of 2019, chosen because it's the last "normal" year) - total revenue $1.2Bn, "Advertising, interest, and service fees" $54m.

Literally all the school buses in my area are operated by private companies which contract with the local public school districts. None of them are full of advertising.

It is a different calculation for the school board. For them, the costs of retraining staff, retooling a shop, increasing parts inventory are all big costs. Plus the risk of buying a bunch of lemons.

Leasing them with performance guarantees moves not just the costs, but also the risks to a specialist better suited to carrying them.

I don’t know if this firm is legit, but the deal could make sense.

A fair portion of school districts already contract their buses to First Student and similar bus companies. And if this company were to raise it's rates drastically, the districts could switch to First Student.

The upfront price difference should be offset in the long term by buying cheap electricity instead of expensive diesel.

> Hmm...buses that (per the article) cost 2x or 3x what diesel ones would.

What about when you consider total life cycle costs? Diesel fuel costs often many times of cost of the vehicle over its lifespan.

Fuel costs will likely increase quite a bit in the future.

Frankly, if they rip off school districts in order to keep kids from inhaling nitrogen dioxide, that's still a better business model than most of the ones I've heard.

I think that depends on the extent to which they rip them off.

I guess you're probably right. But it seems like we're looking at a small factor (2-3) applied to the usual price of a school bus. Of course, there are also reasons it might not be a ripoff, as others brought up (lower ops costs, economy of scale). I just felt like highlighting the problems with prioritizing price over all else around the health of primary schoolchildren.

> She said they were getting rid of their "~1.4 up-front cost" diesel-electric hybrid buses - because the real TCO was considerably worse

In my city, the original hybrids used Toyota Prius batteries and deep cycled them, which they weren't designed for, killing them and requiring regular replacements. That couldn't have been good for the budget.

The play is in vehicle-to-grid (V2G) electric price arbitrage, the article even mentions that a full third of the revenue from the program is coming from selling V2G power generation back to the grid.

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