School bus contractors have dynamic jobs made even more challenging with recent market trends. Of course they deal with some of the same challenges school districts do — routing, student behavior, budgets, staffing shortages, and more — but they also have some unique dynamics.

Tim Flood, EVP of The Trans Group, shared with SBF that he’s juggling route reductions with rising costs for both drivers and buses (including a 40% increase in price for a new large bus!), prompting the need to evaluate budgets and contracts to make it all work. Amid all that, he’s waiting to see how the impact of the new tariffs further changes things.

Balancing general operations with state-specific requirements can be a challenge. In New York, Flood mentions that eight electric buses must be sold before one ICE, which makes new bus purchasing tricky. In his case, the power company cannot accommodate the charging needs to support an electric bus fleet in two of their yards. 

Shae Harkleroad, president of Raystown Transit in Pennsylvania, cites accommodating demand for spring sports trips, increased student behavior issues, and van usage as other new trends. 

School Bus Contracting Trends in 2025

• This year, the driver shortage continued to affect fleets, though by less extremes than previous years. 
• While we know that some companies have increased pay to combat the shortage, of survey respondents this year, pay hovered around the same rate, actually slightly less than last year.
• More drivers are represented by a union, jumping from 17% to 29%.
• Fewer contractor fleets plan to buy new buses next year, and more are unsure of their purchase plans. Likely an effect of inflation, uncertainty around new tariffs, and federal funding question marks.
• Of those who do plan to purchase new buses, interest went down slightly for diesel, gasoline, and propane, but increased for electric and CNG.
• Most technology adoption increased, with more fleets using parent apps, mobile data terminals, and predictive maintenance. Interestingly, fewer respondents this year marked the use of video surveillance.
• Some respondents noted that insurance rates have jumped dramatically over the last few years, inflation is a major concern, and the student transportation landscape is evolving quickly with new tactics needed to accommodate emotionally disturbed students on buses and vans.

All data presented was compiled from qualified survey respondents, which included about 35 private contracting companies, collected in February and March 2025. To see your voice represented in these results next year, watch for announcements about 2026 survey dates and share your insight to help us identify challenges, opportunities, and report on the state of school bus contracting.

15 Largest School Bus Contractors

* Latest data available.

First Student remains the largest contractor in North America, followed by National Express and STA. (Note: This list represents those who either responded to our survey or submitted data in previous years.)

Contractor Bus Fleet Size

• Average: 2,551
• Median: 93

Number of School District Contracts

• Average: 72
• Median: 6

Number of Students Transported Daily

• Average: 158,106
• Median: 500

Average Annual Salary for Terminal Managers

$74,916

Average Starting Driver Pay (Hourly)

$24.02

Buying New Buses?

Most contractors (69%) plan on buying new school buses for the 2025-26 school year, though less than last year (75%).

Technology in Contractor Fleets

• Parent communication increased this year, with half of contractors using the tech compared to just 39% last year. 
• Many contractor buses are equipped with video surveillance: 69% said all their buses are and 22% said some are.
• Tablet adoption is increasing as more contractors report using mobile data terminals on their buses. Last year, 69% said they didn’t use any.
• 56% of respondents said all or some of their buses are equipped with predictive maintenance. Last year, just 6% reported all buses having this.

Find the full results in the June/July 2025 issue of the magazine!