Ridesharing service Sidecar raises $10 million, tweaks model-Reuters

(Reuters) – Ridesharing service Sidecar has raised $10 million from investors including Union Square Ventures, the company announced Wednesday.

The new funding, led by Union Square, the high-profile firm that helped back Twitter, Tumblr, and Zynga, will help bring more credibility to San Francisco-based Sidecar. Its service, which uses a smartphone-based app to match riders with drivers, is currently available in fewer cities than rivals Lyft and UberX.

The funding comes as Sidecar tries a new approach to fares: giving riders and drivers more say over their rides and fees. Like its competition, Sidecar relies on a network of drivers who usually use their personal cars to provide rides for pay.

Under Sidecar’s new system, also announced Wednesday, a driver with a pricier car or a sterling reputation from drivers could choose to charge a premium, say 1.25 times the base rate.

Similarly, riders will be able to choose based on factors such as price, proximity, the driver’s ratings or vehicle type.

Typically, ridesharing customers have no choice over the ride they obtain. After tapping in their pickup location, they wait until a notification arrives that a driver is on the way. For their part, drivers have had no say over fees, letting the app set the price based on factors such as distance.

In markets where Sidecar has tested the system, including Los Angeles, it has experienced a 50 percent increase in rider engagement, meaning 50 percent more drivers on the roads and riders requesting lifts, it said. One popular use case is female riders requesting female drivers, said Sidecar founder and chief executive Sunil Paul.

Sidecar, founded two years ago, is currently available in the San Francisco Bay Area, Los Angeles, Long Beach, San Diego, Seattle, Chicago, Charlotte, Boston and Washington, DC.

Union Square’s Fred Wilson will take a seat on Sidecar’s board, the company said.

Sidecar previously raised $10 million in 2012.

New investors Correlation Ventures, Avalon Ventures, and SoftBank Capital also participated in the funding round, alongside existing investor Lightspeed Ventures. Avalon’s Rich Levandov will become a board observer, Sidecar said.

Lyft last raised $60 million in May. Uber, which runs its low-cost UberX service alongside a pricier town-car service, raised $258 million in August.

Ridesharing has come under fire lately, in part because of questions over the type of insurance drivers carry. Sidecar carries a $1 million-per-ride insurance policy for liability, and says it is working on adding insurance for other types of claims.

Related Posts

Leave a Reply

PEHUB Community

Join the 12500 members of peHUB to make connections, share your opinion, and follow your favorite authors.

Join the Community

Look Who’s Tweeting

Psst! Got any hot tips?

  • This field is for validation purposes and should be left unchanged.

PE HUB News Briefs

RSS Feed Widget

Marketplace

VCJ Headlines (subscribers only)

RSS Feed Widget

Buyouts Headlines (subscribers only)

RSS Feed Widget

Reuters VC and PE feed

RSS Feed Widget