RIP Sidecar: Company Will Cease Rideshare And Delivery Services

Harry here.  We’ve got breaking news on Sidecar and RSG contributor Christian Perea and I will be updating you on the story.  Click here to get the latest.

Today at 10:47 AM, Sunil Paul announced on Medium that Sidecar would cease its delivery and passenger operations at 2PM Pacific Time on December 31st. Sidecar as we know it is now dead.

Sidecar had always been the first in rideshare. It was the first to offer on-demand rides, way before John Zimmer and Logan Green had even seen a pink mustache or Travis had gone to Paris to think about how much taxi rides sucked. And as the battle for the market of drivers and passengers raged, Sidecar came up with all the cool technology Uber and Lyft are testing years later: destination filters, custom pricing, the ability to favorite a driver, back-to-back rides, and the ability for a passenger to select the driver they wanted from within the app. Now it has become the first major rideshare player to bow out of the game.

Sidecar

They should have used motorcyclists with actual sidecars.

Sidecar Is Going Out of Business

Sidecar was actually the first TNC company I drove with. It was where I honed my skills. I remember waiting for rides and not getting any. I was nervous as I had my Jetta ready to go. Eventually, I got frustrated and lowered my prices to .5x in order to get some rides. I used those cheap rides as training for the first day. At this time, I had applications in with all three companies and Sidecar was the fastest to get me on the road with their innovative, rare, and vaunted…telephone number. I called it, emailed my docs and was on the road in less than an hour. Uber and Lyft STILL can’t match that today!

As the funding battles ensued, Sidecar soon became a clear and very distant third player. Yet it continued to hang on and innovate features that are just now starting to appear within your Uber and Lyft app.

We are the innovation leader in ridesharing despite a significant capital disadvantage, continually rolling out new products that set the bar for others to follow. – Sunil Paul

This alludes to a topic we talked about earlier this year: Sidecar patents. At this time, nobody knows what will become of them or if they will engage other rideshare companies in a patent war. It will be interesting to see what happens to all of their technology, patents and people.

This is the end of the road for the Sidecar ride and delivery service, but it’s by no means the end of the journey for the company.

Sidecar may be dead. However it may not be the last time we hear from them…

Sidecar’s E-mail To Its Drivers

Here’s the e-mail Sidecar sent out to its drivers:

The e-mail sidecar sent to its drivers about going out of business

Sidecar Shutting Down

This is a new and breaking story and we will post updates as they unfold.

Drivers what do you think about Sidecar closing its doors?  Was it inevitable or could they have done more?

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-Christian @ RSG

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In 2014, Christian left his job at a mental health center to drive full time for Lyft and Uber. Since then, he has driven for mostly Lyft with a little bit of Sidecar and Postmates thrown in for experimentation and Uber when he doesn't feel like talking to people. He likes to talk about Politics and Economics over a good beer to whoever will listen to him.
  • Anthony Nguyen

    This is proof positive that giving drivers to much control is a bad idea. Sidecar let you set your own price and that is probably its downfall. Drivers are greedy, but you cant blame them for trying to charge to much. At the end of the day, price does sell and most people are just looking for the cheapest ride possible. Not everyone looks for cheap rides, but the vast majority does. Since Sidecar’s model doesn’t work, then it should be seen as a lesson learned!

    • Yep

      Cheap rides and first class treatment

    • Don Anderson

      Not surprising, Sidecar was already the “myspace of ridesharing.”

      Sidecar was interesting because they took seriously the idea of being a “marketplace” for drivers and passengers to meet each other. Letting driver set their own prices was a much more logical and transparent system than the algorithm-driven model of surge pricing used by Uber and lyft.

      But I doubt sidecar’s downfall has as much to do with customer experience as with the ability to attract venture capital. So the real question is: how do Uber’s investor’s interpret this news? Are they encouraged? Or getting cold feet?

      • Christian Perea

        I think a lot of us saw the writing on the wall for Sidecar a long time ago. It’s an interesting case of a TNC failing though. It also sends a reminder that TNCs aren’t invincible and can fall from a position of strength to this. Remember, in 2012 Sidecar was the leader for a short period of time.

      • Anthony Nguyen

        If your business model constantly needs venture capital, then it probably isn’t a good business in the long run. At some point the VCs will want to be paid back and 4 years seems like long enough to demonstrate if you are viable on your own or not…

        • Don Anderson

          So how does a decision like this one to end Sidecar get made? By Paul just deciding to call it quits, or by some big VCs saying, ahem…

          • Anthony Nguyen

            It is simple. If your business can sustain itself on its own revenue, then it will continue. If it needs outside money, then it needs to ‘borrow’ it and that means it will look at banks, venture capital, going public via IPO. If they all say no, we don’t believe in your current business model, then they are forced to shut down due to lack of funds.

          • Don Anderson

            So how will this impact Uber’s next appeal for funding?

          • Anthony Nguyen

            All the rideshare VC right now is mostly going to Uber and Lyft. If you were a VC, who would you invest in? It is probably not going to be Sidecar. So while it’s good to have one less competitor, it might be a sign that venture capital is slowing down and if so, Uber maybe be forced to go public to continue operations.

    • Christian Perea

      I agree. It was a classic example of presenting too much choice, which was nice when it was new. As it became more of a commodity, the biggest factor was 1. Price and 2. When I press the request button, how long until I am sitting in a car?”

    • There is a lot more to Sidecar’s downfall then that. If anything, most drivers and customers alike enjoy that feature, even when the filters were raised by the drivers. Most Sidecar Drivers played the game well. If Uber or Lyft had a reason to surge, so did many SC drivers, but most kept it at bay and didn’t gouge the passenger with lofty pricing.

      Not sure if you have done much homework, but in the statement you made below, it surely seems like you have not:
      You wrote, “If your business model constantly needs venture capital, then it probably isn’t a good business in the long run…”

      Tell that to Uber and Lyft who are and have constantly raised funds, huge amounts and are not even close to being profitable. Sidecar, when it switched over to deliveries finally moved into the air profitability. It was the only “profitable” of the three. The other two companies are losing money by the millions every month. How long can they sustain that kind of fiscal behavior before their investors start pulling on the reigns? I know, with at least Uber, they have a pretty large amount of munchies in the cookie jar, but still, all of that could crumble away at some point in time if they don’t become profitable.

      It is my bet from what I’ve seen in the media, and more importantly, all of the different people in the business, at all levels, who I have talked to over the last year, that the entire Ridesharing industry as a whole will most likely change dramatically in 2016, or at least our next year will be the impetus for those changes. We will see a great deal of tax issues and other government involvement including issues surrounding the entire Gig Economy business model. You certainly can’t discount these issues then, now, and in the future. I believe, in many US Markets, the power will begin to move back to the Taxi industry as they have raised the bar on their customer service and seem to be in the midst of creating a hybrid of a Taxi – Ridesharing model. Good for them, if any organization can give the U-monster a run for their billions it surely is the Taxi cabs.

      Who’s to say that once again, Sidecar’s visionaries have “seen the light” and are bailing when the bailing is good. Maybe they’ll come back with a product or a plan that will be the Consumers answer to a “Super Service” and will trump it all and leave everyone in the dust. One can only hope for the best, right?

      One last observation. I have not seen any official statements or comments by either Uber or Lyft brass since Sidecar’s announcement — what does that tell you?? If there are any, I would certainly invite anyone to share them here or with me directly.

      Cheers everyone and have a GREAT NYE welcoming in 2016, it’s going to be a helluva ride!

  • Dax E. Richardson

    Are passengers not allowed to favorite drivers and select who they want to pick them up on Lyft and Uber’s apps?

  • ProWorkingClass

    Regardless of the reason for Side Car quitting, it is an alarming gesture to the heavily funded rideshare industry. As an investor, I would be more concerned than before about the prospect of success, least to say. I will not be surprised to see more out if the feverish price war does not stop. This where PUC regulations and others become handy in making sure everyone gets a piece of the pie.

  • Luis Avalos

    Does Anyone Know SideCars EIN???

  • GiantSteps

    sidecar didnt fail. they were bought out by GM. huge win

    • Don’t think so, they announced they were going under and then GM bought them out.

  • GiantSteps

    GM plans on rolling out autonomous cars with sidecars technology.