Not that this changes anything about how SideCar operates; after being sent a cease-and-desist order and fined $20,000, the company kept its drivers on the road and its mobile apps in riders’ hands.

The CPUC had previously made agreements with Lyft and Uber in January.

SideCar CEO Sunil Paul said the negotiations for his particular company took so long because he got the CPUC to agree to two particular concessions: 1) It cannot obtain driver and rider information without a subpoena, and 2) it agrees that SideCar is an information service, not a transportation service.

Update: The press office of the CPUC provided the text of the agreement, and it is embedded below.

Paul said he did not know the terms of the Lyft and Uber agreements, but that the standard terms did not include these privacy and jurisdiction claims. He said the past few months had been spent negotiating on these principles, and an agreement came through last night.

In Paul’s view, SideCar is significantly different from the competition because it requires riders to input their intended destination in order to find a driver. He calls this “ride matching” instead of “ride sharing,” and says his competitors are instead offering dispatching services, like traditional taxicab companies.

“We like the analogy of Match.com versus arranged marriage,” Paul said. “We are a data and not a transportation service.”

SideCar operates in about 10 cities, including San Francisco (where it started and is based) and Los Angeles. It has run into problems in other cities such as Philadelphia, where authorities conducted a sting, and Austin, where the city council is voting next month on whether it’s legal. In the meantime, the service operates for free in Austin and Philadelphia, while paying drivers out of its own pocket.

Lyft, the closest competitor to SideCar, announced yesterday it had raised $60 million led by Andreessen Horowitz. Will SideCar try to match that? “We’re talking to investors,” Paul said.

Meanwhile, while Lyft drivers famously adorn their cars with giant fuzzy pink mustaches, SideCar last week started handing out branded sleeves for its drivers to put on their rear-view mirrors so that passengers can more easily find their rides. “We call them ‘mirror socks,’ or ‘mox’ for short,” Paul said.

SED SC Term Sheet May23 13 Final Signed

It’s a huge round for the company, which is much loved for its community spirit and pink “carstaches,” but has also been much questioned for its practice of having regular people essentially act as city taxicab drivers in their own cars.

The deal was a speedy one; it was negotiated over the course of the past week, said Lyft co-founder and president John Zimmer.

And it brings Lyft to $83 million in total funding, having just raised a round about six months ago.

Why so much money so fast? It’s to try to get Lyft to the next level, given the expansion, competition and regulatory challenges it faces. “We can scale globally in the next 12 months,” said Zimmer.

For those paying close attention, Lyft was formerly known as Zimride, and it continues to operate a long-distance ride-sharing service under that brand, but it changed its name a month ago to reflect the momentum of the Lyft business, which is a year old.

Andreessen Horowitz partner Scott Weiss, who led the investment, contended that Lyft differs from competitors like SideCar and Uber, which are both based in San Francisco as well and have been expanding nationally. He likes that Lyft’s mission is around “taking cars off the road,” not replacing or augmenting existing systems.

Weiss said Andreessen Horowitz was motivated to swoop in and make a deal because Lyft “looked and smelled so much like Airbnb.”

Weiss noted that he’d been following Lyft closely, and saw the service grow from 14,000 rides per week two months ago (mostly in San Francisco, but expanding in other newer cities like Los Angeles and Chicago) to 30,000 rides per week now. Plus, he said, more than half of the company’s passengers are women, which says something about safety.

“With the risk of the Samwer brothers [who infamously replicate consumer Internet businesses for the European market] and the copycats, you can’t let grass grow under your feet,” Weiss said. “You have to grow it as quickly as you can, and that’s where we come in.”

The company connects riders and drivers through its smartphone apps, with payment in “gifts” rather than fares.

It is launching weekend service in Boston, Brooklyn and Chicago. Previously, the company started operations in San Francisco, then expanded to Seattle, Los Angeles, Philadelphia and Austin.

But those last two cities didn’t go too smoothly. In Philadelphia, local authorities conducted a sting and impounded the cars of SideCar drivers.

In Austin, the transportation authority declared ride-sharing was illegal, so SideCar filed a lawsuit against the city a week ago, and made all rides free for now.

Free rides were an easy non-sell during SXSW, with more than 20,000 requested during the Interactive (a.k.a. technology) portion of the festival. (Obviously, not all of those were fulfilled. But such is the nature of the system.)

SideCar spokeswoman Margaret Ryan said of the Austin situation via email, “We’ve since had productive meetings with city officials, many of which are pro-rideshare. We’re hoping to have resolution so we can go back to operating as usual soon.”

Meanwhile, San Francisco-based SideCar is still in discussions with regulators in its home market, where competitors Uber and Lyft have already settled with the California Public Utilities Commission, but SideCar had resisted terms that limited an open interpretation of ride-sharing.

In Boston, Brooklyn and Chicago, SideCar will be available from 5 pm to 3 am on weekend nights until it reaches critical mass.

The company had also said last month that it was recruiting drivers in Washington, D.C., for launch this year.

SideCar raised $10 million in Series A funding last year from investors including Lightspeed Venture Partners and Google Ventures.

Banking on transportation as the great equalizer of the week-long music, film and technology conference that starts next week in Austin, Texas–namely, the need for every attendee to get from the airport to the conference and dozens of venues–a handful of startups are offering new services or extended existing ones in their quest to woo early adopters as users, and (they hope), ambassadors.

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Today, SideCar is making its next outpost clear, with the announcement that it is acquiring the assets of another, similar, company called Heyride, which is based in Austin, Texas, and had only launched there so far.

The deal is well timed for SXSW, the annual Austin-based conference/festival/boondoggle that has become an early-adopter petri dish and PR machine for mobile apps.

Ride-sharing in particular seems a perfect fit for overcrowded Austin in early March, where on-the-fly logistics are a constant issue.

Back home in California, Lyft settled its differences with local authorities late last month — as did Uber, which said it was thinking of adding ride-sharing to its existing licensed driver system.

SideCar, however, didn’t settle. SideCar CEO Sunil Paul declined to elaborate on what exactly happened, but said his company was unwilling to concede to the ride-share terms the California Public Utilities Commission set for the other two startups.

SideCar plans to launch in Los Angeles, Philadelphia and Austin this week, and soon in Chicago, New York, Boston and Washington, D.C.

Lyft and SideCar (and Uber even more so) have significant venture backing, despite their ongoing regulatory troubles. SideCar recently raised $10 million from Lightspeed Venture Partners and Google Ventures, while Lyft/Zimride raised $15 million led by Founders Fund.

The direct parallel is to New Year’s Eve last year, when Uber surprised some users by instituting dynamic pricing — for instance, charging one San Francisco user $75 for a two-minute black-car ride.

Uber has since made its “surge pricing” an ongoing part of regular usage, though it continues to rankle some people. The company’s explanation is that when demand is so high, the economics change, and increasing prices makes it worth the drivers’ while.

So now SideCar, a peer-to-peer alternative, is trying to do something similar. What makes this interesting is that SideCar is trying to redistribute supply and demand in a shared economy. Uber doesn’t employ its drivers, but it does get to set and enforce prices.

In order to comply with taxi regulations for nonprofessional drivers, SideCar suggests “community average donations” rather than using a more obvious term like “payments.” The service dynamically calculates a donation amount based on similar rides, and then it’s up to the rider to pay or not, enforced by social norms.

So SideCar can’t mandate much of anything, but it’s posing the price increase as a way to show appreciation for drivers.

Obviously, driving drunk revelers around can get annoying, and SideCar drivers aren’t employed by the company or put on shifts (unlike competitor Lyft), so they have even less incentive to get behind the wheel instead of enjoying the evening themselves.

Said a SideCar spokeswoman, “Knowing that NYE will be the busiest party night of the year, we want to do what we can to get drivers on the road to offer as many safe, reliable rides as possible. We talked to drivers and they told us that bigger donations would be an added incentive to come out that night. Donations are still voluntary and up to the rider. Ultimately, we want to be the safest, most reliable way for people to get around and we’re looking into different ways to meet demand as we grow.”

If that’s the case, Uber is the current badge leader, racking up a citation from the California Public Utilities Commission and a class action lawsuit by San Francisco taxi drivers to add to its hefty pile of local disputes.

Ride-sharing services SideCar and Lyft confirmed they’d also been cited by the PUC yesterday to the tune of $20,000. Lyft COO John Zimmer said his company would appeal the citation and described it as a chance to accelerate a conversation about modernizing transportation laws. SideCar CEO Sunil Paul asked users to sign a petition supporting his company and urged them to “Ride on!”

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.

The firms have continued to operate their services since then, but word of some of the letters just came out in a San Francisco Chronicle story.

The SideCar app

Lyft, SideCar and Tickengo make mobile apps that connect drivers to passengers who exchange donations for rides. The donations are only suggested, but riders who don’t make them risk lower ratings from the drivers. The PUC told the companies they lacked the necessary charter party carrier permits to operate.

“Our view is we are not offering a transportation charter service, so there’s nothing to cease-and-desist,” said SideCar CEO Sunil Paul in an interview this morning.

“They seem to have an attitude where they lump Uber, SideCar and other smartphone companies in one, without looking at the specific details of how we operate,” he added. (Indeed, Uber received a similar letter two years ago, and also continues to operate.)

Lyft COO John Zimmer told a similar story. “It was clear that they didn’t have an understanding of what we do. We designed the service to be in full compliance with regulations. We’ve been in conversations with them, and they admitted to the fact that current regulations weren’t written with this in mind.”

Both Paul and Zimmer said they have been in ongoing discussions with the PUC since then they received the letters in August.

While the talks have continued, the PUC has not done anything to enforce the orders. ”We understand that what’s likely to happen next is a public investigation,” Paul said.

The PUC’s general counsel, Frank Lindh, told the Chronicle that his concerns include liability in the case of an accident, and commercial competition for existing regulated taxi systems.

SideCar, Tickengo and Lyft clearly knew their legality was going to be questioned from the start.

Lyft cars have signature hot-pink mustaches.

“Everything we’ve done has gone above and beyond what any alternative transportation, what taxis or limos, requires. We’ve been very careful from the beginning,” said Zimmer.

“There’s certain entrenched interests that are not happy, and they have a lot of sway to try to put this existing innovation back in the bottle. But smartphones are not getting any dumber,” Paul said. “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.”

Zimmer had a similar message. “The important thing is we need to be able to innovate. There are serious problems with transporation in this city. Why would these regulators try to stunt innovation during a tough economy?”

Paul noted that he is intimately familiar with California transportation law from his successful efforts to pass AB 1871, which made car-sharing services like Getaround and RelayRides legal.

He pointed to two specific SideCar features that were built with compliance in mind: Passengers cannot request a ride without specifying where they are headed; and the suggested donation is based on an automatically calculated peer-based average, not an amount set by SideCar. Plus, said Paul, over the lifetime of the SideCar service (just about the last six months), about 1 percent of passenger trips have been given for free.

Meanwhile, Zimmer noted, Lyft has secured a first-of-its-kind $1 million excess liability insurance policy for its service.

Both SideCar and Lyft have put up blog posts on the matter.

Update: Tickengo co-founder Geoff Mathieux called and confirmed his company received a cease-and-desist in September. He contended that Tickengo had been unfairly lumped in with Lyft and SideCar, because those services have much in common with commercial taxi businesses.

Tickengo, by contrast, doesn’t screen or train drivers, doesn’t buy insurance, and actually limits the amount any driver can earn per year to $8,776 (the estimated American cost of car ownership).

“We’re trying to elimate the need for commercial vehicles, so we’re the total opposite,” Mathieux said. “Lyft is taking regular people, yes, but they’re turning them into professional drivers. It’s not disruptive; it’s a yellow cab with a mustache.”

“We’re not all created equal here,” he continued. “You can’t lump all these companies in one bucket. Some are legal and some are not. They’re BS-ing their way into peer-to-peer, and it’s not peer-to-peer. Frankly, I think the PUC has a point.”

Update 2: A representative for the PUC replied to questions we sent via email.

What are the core concerns about how these services operate, and what regulations do they violate?

Companies must obtain charter party carrier permits, which a company receives after the CPUC ensures that its drivers are properly licensed and is insured to carry commercial passengers.

What happens, going forward? It doesn’t appear that these services are stopping. What’s next?

The law provides various enforcement tools, fines, filing criminal complaints and possible imprisonment, vehicle(s) impoundment, coordinating with other law enforcement agencies, etc.

More and more apps I see take advantage of an emerging and highly useful mobile interface — a live map — that indicates where a person or service provider is located in real time.

Live maps are tricky — what could be more of an invitation to stalking and unwanted tracking than telling people exactly where you are in that moment? — but they have great potential.

For instance, a new iPhone app called Twist was released today that helps users send estimated arrival times to people they are trying to meet up with.

Before a Twist user leaves for a destination, she tells the app where she’s going and who she is going to meet. Throughout the trip, Twist recalculates her arrival time depending on traffic, mode of transportation and the tracking of her actual location. Both the sender and receiver can see her travel across town on a live map, and they also get text or push notifications about her ETA.

Twist seems a bit like a more polished version of Glympse, which is an app I use with my family all the time to send each other short-term live maps when we’re on our way home or to pick each other up.

Twist adds some nice features like a home screen that calculates the current travel time to bookmarked locations like home or school, and integration with the phone user’s calendar events to automatically suggest upcoming destinations.

Some places you could imagine using Twist are for carpools and business meetings — especially useful for those of us who tend to run late. Or perhaps you could do something more creative, like bring the guest of honor to a surprise party and surreptitiously tell everyone when you both will arrive so everyone else doesn’t have to crouch behind couches shushing each other.

There’s a lot of accountability to this interface — you can’t fudge where you’re going if someone can see your actual location in real time. That may be a plus for some users and a downside for others.

It’s particularly important that Twist and similar apps stay respectful of sharing users’ actual locations only with the intended recipients. Sharing live locations is something people will always be fearful of, and with good reason. But we’re approaching one billion global smartphones by 2016; the times and expectations are changing.

Where I could see Twist and Glympse live mapping features being really useful is as a part of other products. For instance:

• People who RSVP for an event on Google, Facebook or elsewhere could all share their location while en route.
• Within the course of a regular text message conversation, one person could send the other a live map.
• A restaurant sending out food for delivery could show the recipient where the driver is en route. (I’ve heard of multiple companies working on exactly this issue.)
• The ride-hailing app Uber has a very nice live map interface that shows all the local cars’ locations, and an estimated arrival time once one is chosen.
• All sorts of other smartphone apps like Exec — a way to request instant part-time assistants — have created their own Uber-like interfaces, and tend to call themselves “the Uber for X.” Actually, Twist co-founder Bill Lee told me you could think of his app as “the Uber for people.”
• Some fitness apps like RunKeeper allow users to live-broadcast their activities so people can check on how they are doing, encourage them and make sure they are safe.
• Live maps are a safety feature for the wacky new peer-to-peer taxi app, Sidecar. Users can send out a “Share ETA” text to a friend with a link to a live map, making the prospect of getting into a stranger’s car a little less daunting.

Multiple companies hope to enable other people’s live maps. For instance, Bill Lee of Twist said he plans to release a public API, while Skyhook today launched developer tools that promise to persistently track location with less battery drain.

What’s interesting is that early social location apps like Loopt and Google Latitude actually started with this kind of persistent location tracking, but they both shifted toward more selective check-ins when Foursquare was on the rise.

But the reign of check-ins may be waning. These days, Foursquare itself has reduced its emphasis on check-ins and moved toward providing local information to users who might not want to broadcast their exact venue.

Meanwhile, Google Latitude is having a revival of sorts in the new Google Now for Android, which uses persistent location tracking to establish users’ patterns and anticipate what information they need in a particular place — like the next arrival times at a bus stop.

Still, it’s really not that thrilling to watch someone move around a map. Often, it will be what the map enables: Some users will prefer just to get notifications about ETAs generated by the maps. Some people will want those public transit times and commute length estimates. Others might just appreciate the added accountability that pushes food deliveries and cab drivers to arrive on time.

It was way less weird than I expected.

The guy who gave me the ride was an incredibly friendly fellow named John Robertson, who was driving for a start-up called SideCar, which has built an alternative to taxis, with cars driven by regular people and hailed using smartphone apps. SideCar launches to the public today in the San Francisco Bay Area.

At a SideCar employee’s suggestion — I should admit that my Friday afternoon meeting had actually been at SideCar’s office — I sat in the front seat of Robertson’s car and chatted him up.

Robertson told me he recently retired after 30 years as a project manager at UPS, and quickly got bored. He now generally drives five or six hours per morning with SideCar, and golfs in the afternoon.

Robertson said he lives in the East Bay, and has used the driving as a chance to get to know San Francisco better. He only makes $80 or so per session — which isn’t great, minus the cost of gas — but he doesn’t do it for the money, but rather because he believes in what SideCar is doing.

And Robertson meets all sorts of interesting people — during the beta period, lots of Twitter and Google employees, where word about SideCar apparently spread quickly through their SF offices.

SideCar is run by Sunil Paul, the serial entrepreneur and investor behind companies like Brightmail, who in recent years has been exploring cleantech and now the “cleanweb.” Paul first worked on getting California legislation changed to allow car sharing, and tested a start-up in that space called Spride, but then decided the more transformative and potentially lucrative opportunity was around sharing rides within an online community rather than borrowing people’s cars.

If you ask Paul, the idea for a ride-sharing start-up first occurred to him in 1999 — and he actually received a patent on some aspects of it in 2002.

After sitting on the idea for some 10 years, Paul recently invested and became CEO of a University of Michigan transportation research spinoff called Shepherd Intelligent Systems — now SideCar.

SideCar has been in testing since February, with more than 10,000 rides to date. In San Francisco, SideCar isn’t nearly as fast as Uber, but rides can be booked in “minutes to 10s of minutes,” as Paul described it.

As seems to happen with many timely ideas, there is a direct SideCar competitor that also just launched — it’s called Lyft, and is made by the start-up Zimride. I tried Lyft yesterday, and from a user’s perspective, it seems almost identical.

There’s one key difference between SideCar and the competition, at least according to Paul. After all the work he did with car sharing, he knows the regulations around collaborative consumption and transportation backward and forward, and SideCar’s payment system is apparently more strictly built to abide by existing laws.

The way it works is that SideCar automatically and dynamically computes a suggested payment that averages what other people have paid for the same kind of ride. This sidesteps the company and the driver setting a price for the ride, in order to avoid commercial vehicle restrictions. SideCar takes a 20 percent cut.

Users don’t have to pay for the ride, but if they don’t, drivers are unlikely to give them a good rating, and they’re less likely to be picked up the next time they request a ride. (Lyft has the same policy.)

Of hinging his company’s business model on an optional donation, Paul said, “The capitalist in me is scared silly of that idea, but the human being says you can trust people.”

Another nice feature of SideCar is an easy way for riders to share their ETA with a friend and send them a live online map of their progress in the car. This looks a lot like Glympse, and helps people reassure themselves that someone knows where they are while they’re in a stranger’s car.

Paul is being somewhat secretive, even as SideCar opens to the public, and won’t disclose how much funding he’s raised or how many employees he has. He did give me a long list of investors, which includes his own 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.

With an interface like Uber, Lyft users will be able to find nearby drivers and hop in for a ride, paying a suggested donation that’s approximately 30 percent less than a cab fare.

Drivers will be vetted by Lyft, and both riders and drivers authenticate via Facebook. Lyft is only in San Francisco and on iPhone for now, where there’s also a competing service called SideCar in beta testing.

Asked about the licensing and insurance issues that come with effectively turning regular cars into taxis, Zimride COO John Zimmer said, “I’m sure people will get upset about more competition. But our understanding is that when it’s ride-sharing, you can use your personal insurance policy. As for regulation, a lot of state laws are supportive of carpooling and ride-sharing and want to make that work.”

A new free Android and iPhone app called Sidecar brings a few tweaks to the mobile dial pad, such as helping people share live video, photos, locations, contacts and texts during phone calls.

What’s nice about Sidecar is that it allows all those items to be shared after a normal phone call is already happening.

This is the kind of functionality that would probably seem more natural within the native dialing experience than within an application, but a start-up has to start somewhere.

So instead of being in the middle of a phone conversation, and then switching tasks to the address book to look up someone’s phone number and reading it out loud, a Sidecar user can tap on the big “contact” button, scroll to the right number, and send it directly to the person on the line.

As for its video feature — which helps users stream live video into an existing call — Sidecar has actually filed for a trademark on the phrase “See What I See.” As you might guess, the focus is to show what’s in front of the caller, unlike something like Apple’s FaceTime, which defaults to iOS devices’ front-facing camera.

The Sidecar app has a simple — you might even say rudimentary — interface. It works best when one Sidecar user calls another. Sidecar users can dial out to nonusers over Wi-Fi, and for free within the U.S. and Canada.

Founded by former RealNetworks execs Rob Glaser and Rob Williams, Sidecar was previously a social video service called SocialEyes. Funnily enough, when it launched last year, I faulted the company for its lack of mobile support.