News & Politics

Ride-Sharing Company Sidecar Gives Up on Competing With Uber and Lyft

Photograph by Flickr user TheTruthAbout.

After years of struggling to keep up with its more cash-flush rivals in the transportation-and-logistics game, Sidecar—which trailed far behind industry giants Uber and Lyft—says it will shut down its ride-hailing and delivery operations on Thursday. The company’s founder and chief executive, Sunil Paul, writes that while the company intends to continue in some form, it can’t go any further while it remains at a “significant capital disadvantage” compared to its rivals.

In a post on Medium, Paul writes:

Our vision is to reinvent transportation and we’ve achieved that with ridesharing and deliveries. It is, however, a bittersweet victory. Shutting down the Sidecar service is a disappointment for our team and our fans. The impact of our work, however, will be felt for generations to come. We changed transportation law, and created a new mode of transportation that has transformed cities and made life easier and better for millions of people.

Deleting Sidecar from the menu of smartphone apps that connect people with on-demand drivers is not a huge quantitative blow to the relatively young industry that has emerged from so-called transportation-network companies. Its coverage area in Washington never penetrated the suburbs like Uber and Lyft have, and it failed to recruit a big roster of drivers. More crucially, Sidecar never took root among Silicon Valley investors: it raised only $35 million in its lifetime; Lyft is currently valued around $6.6 billion thanks to a recent $247 million boost from Saudi Prince al-Waleed bin Talal, while Uber towers over the entire field with a $65 billion valuation.

Even though Sidecar lost the marketing race, Paul’s claims about reinventing transportation and changing transportation law aren’t that off-base. The company launched its service of letting any car owner become a private driver for hire in September 2011, while Uber was still only offering hails from professional luxury black-car drivers. Lyft was founded the next year and was chased quickly by Uber’s UberX platform, which quickly ate into the market. Late last year, DC’s taxi companies complained the “anyone-can-drive” models from Uber and Lyft (but mostly Uber) had cut their revenues by 30 percent in just one year. DC, Maryland, Virginia, and many other jurisdictions across the country have also rewritten their taxi regulations to accommodate these new modes of transportation. On this front, even if Uber’s lawyers and lobbyists did the heavy lifting, Sidecar can at least clain an intellectual victory.

Sidecar also pioneered true “ride-sharing” from nearly the start by allowing independent customers traveling in similar directions to share cars while paying separate fares; Uber and Lyft started tinkering with similar options in 2014 and only introduced them to the DC market in the last few months.

Still, simplicity to users matters greatly in the transportation-app market, and Sidecar was perhaps too wonky for its own good. Its other built-in options—allowing drivers to set their own rates and letting users pick their driver—might have been too much choice at both ends. Uber and Lyft give customer far less control over their ride experiences, but with the promise of much greater simplicity and ubiquity.

Sidecar’s company’s pivot this year toward deliveries—it had a successful partnership with food-ordering platform Eat24—also felt like a well-intentioned but too-small play at competing with more-established outfits like Postmates and titans like Amazon, which have transformed the way urban dwellers buy everything from groceries to clothes to appliances.

Mobile technology has made traditional urban transportation and logistics more susceptible than ever to disruptive upstarts, but scale is still crucial. Sidecar’s departure might be a loss to the industry, but it won’t be missed by very many customers when it goes offline Thursday afternoon.

Staff Writer

Benjamin Freed joined Washingtonian in August 2013 and covers politics, business, and media. He was previously the editor of DCist and has also written for Washington City Paper, the New York Times, the New Republic, Slate, and BuzzFeed. He lives in Adams Morgan.