Despite being shut down, ride service says it will run again

The SideCar app enables customers to request a car, indicating location and destination, for a "donation."
The SideCar app enables customers to request a car, indicating location and destination, for a "donation."
Posted: February 28, 2013

A "ride-sharing" operation that offered on-demand trips in private cars has been shut down by the Philadelphia Parking Authority for running an illegal taxi service.

But the founder of SideCar, a San Francisco-based venture that got $10 million last year from Google and other investors, said Tuesday that the service will be back in business in Philadelphia on Friday.

Three local men driving for SideCar were given $1,000 citations (one received two tickets) and had their cars impounded Saturday, Jim Nye, director of PPA's taxi and limousine division, said Tuesday.

SideCar was fined $3,000 for operating taxis without proper certification, PPA general counsel Dennis Weldon said.

SideCar offers rides on demand, through a smartphone application. Riders request a car, indicating location and destination, and a driver responds in a private car.

The transaction is paid for with a "donation," with SideCar suggesting an amount. Drivers make up to $22 an hour, according to SideCar's website.

SideCar founder Sunil Paul declined to say how many drivers are signed up in Philadelphia, though he said it was "less than 100 and more than three."

SideCar says its operation is "like a quick and hassle-free carpool," that is "completely donation-based."

Taxi and limousine regulators see it differently.

"It's basically a hack through an app," said Weldon. "It's a tremendous public safety problem. . . . You have no criminal-background check, no proof of insurance. You don't know if the driver even has a license.

"Something bad is going to happen, and people will say, 'How did you let this happen?' "

Paul said that SideCar conducts background checks of drivers, who provide a car and insurance. He said 71 percent of SideCar riders reported they felt safer than in a taxi.

Philadelphia cabs must have a taxi medallion, which currently cost $450,000 each, and owners must pay an annual $1,250 assessment per vehicle. Drivers must pay $115, undergo a week of training, and pass a test to get a cabdriver's certificate.

And cabs are subject to semiannual inspections, which cost owners $75 a year.

In California, where SideCar started, the public utilities commission issued a "cease and desist" order to SideCar and similar operations in August.

Investors have been undeterred.

In October, SideCar said it had raised $10 million from Google Ventures and Lightspeed Venture Partners.

Despite the PPA citations, SideCar will continue to operate in Philadelphia from 5 p.m. to 3 a.m. on Fridays and Saturdays, its founder and chief executive saidy.

"We're hopeful that the citizens and leaders of Philadelphia will step forward and realize that innovation in transportation is too important to be blindly shut down," Paul said. SideCar is "in conversation with the PPA" about allowing the operation.

PPA officials said they will continue to impound cars and cite drivers who don't have taxi operators' certificates.

Paul acknowledged that "PPA has the power to run us out of town, and if that's what Philadelphia wants, ultimately that's what Philadelphia will get.

"But we don't think that's what the people of Philadelphia want."


Contact Paul Nussbaum

at 215-854-4587 or pnussbaum@phillynews.com.

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