Liz Gannes

Recent Posts by Liz Gannes

Despite Ride-Sharing Regulatory Trouble, SideCar Gets VCs to Invest $10M

SideCar, the San Francisco-based ride-sharing service that helps regular people pick up and deliver passengers in their own cars, has raised $10 million in Series A funding from Lightspeed Venture Partners and Google Ventures.

SideCar CEO Sunil Paul admitted that it was “more challenging” to get venture capitalists onboard, given that SideCar was sent a cease-and-desist letter by the California Public Utilities Commission in August, along with competitors Lyft and Tickengo. He said that VCs were also concerned about there being quite so much competition in the taxi 2.0 space.

So why did the VCs pony up the money? Because Paul assured them that his service is differentiated and was carefully built within existing laws — something he personally is very familiar with, due to his work around legalizing peer-to-peer car-sharing in California. It also doesn’t hurt that SideCar recently acquired a patent for transportation routing that Paul received in 2002.

SideCar got the cease-and-desist order from the PUC on Aug. 15, saying that it lacked the necessary charter-party carrier permits. Paul told AllThingsD that the letter came as a surprise, arriving less than a week before a scheduled introductory meeting with a PUC supervisor.

Since then, SideCar has kept its drivers on the road, while trying to explain itself to the PUC. Paul maintains that his company doesn’t need a charter-party carrier permit because those are for limo services, which isn’t what SideCar offers.

In San Francisco, SideCar competes directly with Lyft, which equips drivers’ cars with large, fuzzy, pink mustaches that raise visibility. Lyft — which also received a cease-and-desist order — has yet to release growth numbers, but SideCar now says it has facilitated more than 50,000 rides since February (most of them since its public launch in June).

Paul said that SideCar expects to expand to U.S. markets beyond San Francisco shortly, and ultimately beyond just ride-sharing. “We’re out to build something that makes it possible for you to not have to own your own car, and this is the beginning of a series of innovations that will make that possible,” he said.

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