Alumni-founded startup is using tech to combat driving school fraud

Kruzee is an online driving school that’s expanded across Ontario and into B.C.

When an undercover CBC journalist called several Ontario driving schools, 70 per cent of instructors offered to forge paperwork saying they’d completed driver’s ed, without having them take classes at all. 

The investigation, published last month, illustrates an industry rife with fraud. Alum Mikael Castaldo (BBA 2017 UTSC) says his startup, Kruzee, is taking a high-tech approach to create a driving school where that doesn’t happen. 

“That kind of behaviour is part of why we’re trying to stand out in the industry,” says Castaldo, co-founder of Kruzee. “Everyone has to go through driving school. It shouldn’t be this painful or scary or sketchy.”

One of the main appeals of driving schools is that they can issue the beginner driver education certificate, which makes new drivers eligible for insurance discounts and lets them take their road test faster. To get it, students must complete 10 hours of in-car driving lessons, 10 hours of homework and 20 hours of classroom learning, in-person or virtually.

Digitizing the experience

Many Ontario driving schools are small businesses using little technology, Castaldo says, and tracking everything on pen and paper means much can fall through the cracks. Kruzee is instead digitizing the experience: all learning except in-car lessons is done online, meaning a student’s progress is tracked automatically, and there’s no faking whether they’ve finished the classwork or homework. 

Castaldo and co-founder Osama Siddique (BBA 2017 UTSC) have brought similar accountability to in-car lessons, which has also helped them combat a frustration they’ve seen often in their research – and experienced themselves. 

They found 80 per cent of Yelp reviews for prominent Ontario driving schools were negative, and largely hinged on the process of booking in-car lessons. In many reviews, students recount scheduling lessons by texting or calling an instructor, then hoping both they and their teacher remember when and where the lesson is, and how many hours they’ve completed. 

“We were surprised that it was impossible to book lessons online, impossible to know anything about your instructor before you get in the car with them, and that the theoretical part was still pretty analog,” he says. “People complain about booking delays, last-minute cancellations, instructors ghosting them.”

Modernizing driver’s ed

Kruzee has brought in the kind of online booking now ubiquitous in the post-pandemic era. Students use Kruzee’s website to browse profiles and reviews of driving instructors, along with which car they’re driving, then schedule their appointments and get a reminder text 24 hours beforehand. Instructors also record students’ progress and bookings through a bespoke app. 

In the coming months, the company is launching a feature that will have instructors track not just how many hours a student has completed, but their specific strengths and areas for improvement, such as parallel parking or lane changes. That data will fill out a custom report card, which instructors will use to further customize their lessons.

The in-car portion is where there’s the potential for fraud, so Kruzee has made it a rigorous process to become an instructor, and continually checks that everything is being done above board. Each instructor is hand-picked and goes through extensive background checks, along with three rounds of interviews. In the two years since the company launched, 90 per cent of their drivers have remained. 

Digital approach keeps costs low

Their digital approach has helped keep their costs low; the company has also partnered with two Canadian startups also digitizing their fields to ramp up discounts. Kruzee students get $500 off their first used car bought through Clutch, which lets customers buy a car online, have it delivered to their house, drive it for 10 days and, if it’s not the right fit, return it free of charge. Students can also compare insurance rates with five free quotes from Walnut Insurance.

Kruzee has another course to prepare students for the first written test needed to get a driver’s licence, the G1, and students who take it are given a full refund if they don’t pass the test on their first try. Though the option is popular, the company has never had to give anyone’s money back.  

The startup has expanded across Ontario and into British Columbia, and has sights set on getting into the U.S.

“We’ve been getting a pretty phenomenal response so far in Vancouver, because people are facing the same problems there, and we know it’s a similar experience throughout the U.S.,” he says. “We’ve created a model that gives driving instructors and students what they're looking for, but better.”

Originally published by University of Toronto Scarborough