SideCar launches in D.C., but trouble may be ahead

Steven Loeb · March 23, 2013 · Short URL:

Recent law says that drivers need to be licensed as taxi operators, but SideCar uses everyday people

Ride sharing service SideCar has just added a new city to its roster, and may already be in violation of the law by doing so.

The company announced Friday that it will be launching in Washington D.C., starting this weekend.

"DC meets SideCar tonight and we predict a perfect match. Beginning this weekend, SideCar is available every Friday and Saturday night from 5pm until 3am. SideCar is a fast, affordable and safe way to get around the Capitol, meet new people and help keep more cars off the road," SideCar wrote in a blogpost Friday.

"DC loves rideshare. In fact, 93% of residents polled said DC would benefit from a new rideshare program."

Washington is joining SideCar services in eight other markets: San Francisco, Seattle, Los Angeles, Austin, Philadelphia, Chicago, Boston and Brooklyn.

While the expansion to D.C. may seem like good news on its face, there are some very serious problems that may arise, based on laws recently passed to allow one of SideCar's main rivals, Uber, to operate in the city.

In December, after a long battle with Uber over whether or not the company was covered by existing regulations, the city passed The Public Vehicle-for-Hire Innovation Amendment Act of 2012. As part of that act, dispatchers need be licensed by the city and drivers have to be licensed as taxi or limo operators.

And that is where the problem comes in for SideCar, where the rides are based on voluntary donations, and users are connected to everyday drivers with a car to people in the community looking for alternative transportation. A.k,a, people who will almost definitely NOT be licensed by the city.

SideCar has found itself in trouble over having unlicensed drivers before.

The company recently ran into an issue in Philadelphia where it was the victim of a "sting operation" that led to three cars being impounded and three drivers being fined $1,000 each for not having licenses to operate taxis in the city. 

Martin O'Rourke, a representative from the Philadelphia Parking Authority, told VatorNews at the time that, Despite SideCar's insistence 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. And the SideCar drivers and cars were not properly vetted and inspected.

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

“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.

SideCar may be right that D.C. residents love the service, but ride sharing is a contentious issue with many cities and local governments, which see them as a threat to their local taxi industries. With Washington D.C. having clearly stated that all taxi drivers need to be licensed, SideCar should be ready for a fight.

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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