SideCar - a victim of Philadelphia 'sting operation'

Steven Loeb · February 25, 2013 · Short URL:

Three SideCar vehicles were impounded and the drivers fined $1,000 each

(Updated to reflect comment from the Philadelphia Parking Authority)

Ride-sharing services are notoriously unpopular with local taxi commissions and city governments, that increasingly see them as a threat to their local taxi industries. Companies like SideCar, Uber and Zimride have all had numerous problems in cities all around the country. They have been ordered to cease operations, and even fined.

An incident between SideCar and the city of Philadelphia this past weekend, though, might be the first time that one side in this fight has actually accused the other of malicious intent.

SideCar, which has also run into difficulties in its home state of California, wrote in a blogpost Monday that it was the victim "of an orchestrated sting operation" in Philadelphia, the first East coast city it has expanded to.

The incident in question happened this past Saturday, when three SideCar drivers were "given hefty citations and had their cars impounded," Sunil Paul, CEO of SideCar, wrote.

According to Paul, the citations given to the drivers wrongly say that SideCar, and its drivers, are an "unauthorized service provider.”  

"SideCar is a technology platform that enables peer-to-peer ridesharing. Our smartphone app instantly matches people who need a ride with regular, everyday drivers who are willing to give them one. With SideCar, payment is voluntary and you pay what you want. SideCar is safe. We run more checks on our drivers than taxi or limo services. Plus, all matched rides are recorded and GPS tracked for safety," Paul wrote.

How the incident in question consitutes a "sting operation," is unclear, unless the people who sent for the SideCar vehicles were doing so to purposely take away their vehicles.

VatorNews has reached out to SideCar to get a better idea of what happened. We will update if we hear more.

Martin O'Rourke, a representative from the Philadelphia Parking Authority, told VatorNews that each driver was fined $1,000, for a total of $3,000.

The SideCar drivers were "operating illegally," he said. "They have no license to operate taxis in the city of Philadelphia."

Despite SideCar's insistance that it is a peer-to-peer service, and that the cars are lent out by private citizens, O'Rourke says that the drivers were "dispatched to pick people up," and, therefore, it constitutes a taxi service. 

Taxis in Philadelphia are regulated and inspected, and the drivers are given criminal background checks, but this is not done for vehicles operated by SideCar.

"We don't know if their cars are insured, if the drivers have a criminal background or if they even have driver's licenses," he said.

“This is not about technology. This is about public safety."

While SideCar says that it chose to expand first to Philadelphia, "because of its reputation as a center of innovation and its forward-looking government," the incident on Saturday has not seemed to deter Paul from wanting to work with the city, as he wrote that SideCar will continue to talk to city and civic leaders in Philadelphia.

"We remain confident these characteristics of this great city will prevail over the defenders of entrenched interests threatened by progress and the unknown."

Ride-sharing violations

This is not the first time that SideCar has run into issues with local authorities over its services.

In October, the company received a cease and desist letter from the California Public Utilities Commission in August.

“Public Utilities Code section 5371 states that no charter-party carrier of passengers excepting transit districts, transit authorities, or cities owning and operating local transit systems themselves or through wholly owned nonprofit corporations shall engage in transportation services without first having obtained from the commission a certificate that public convenience and necessity require the operation, except that certain specific transportation services as defined in Section 5384 may be conducted under authority of a permit issued by the Commission,” the letter said.

”Continued violations of law may result in criminal prosecutions and termination of telephone service.”

Some of SideCar's competitors, including  LyftZimride and Tickengo received similar letters.

In November, SideCar, Uber and Lyft were each fined $20,000 each by the commission. 

Uber, one of the biggest names in the ride-sharing space, has also run into problems when it attempted to expland to the East coast. 

Uber first attempted to launch a taxi service in New York City in September, but ran into trouble from the New York Taxi and Limousine Commission, causing it to shut down operations in October. 

In December, the Commission finally voted to allow a year long pilot program that will let people in New York to use their phones to connect with yellow cab drivers.

Founded in June 2012, the San Francisco-based SideCar raised a $10 million Series A round of fundraising from Lightspeed Venture Partners and Google Ventures in October. The company previously received seed funding from Spring Ventures, Huron River Ventures, SV Angel, Lerer Ventures, First Step Fund, Jeff Clarke, Lisa Gansky, Robert Goldberg, Jared Kopf, Konstantin Othmer, Mark Pincus, Martin Roscheisen, Josh Silverman and Thomas Varghese.

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