BC Business
Peer-to-peer car sharing may provide an alternative to the ubiquitous taxi.
Many of last year’s breakout trends here at SXSW centered on social media platforms such as Storify and Pinterest. This year, transportation is a crucially important discussion.
On that front, one of the most interesting new firms is peer-to-peer ride-sharing startup SideCar Technologies Inc., which is promising to transform the way people travel in cities by connecting passengers directly with civilian drivers in the area.
The system runs on donations (SideCar skims 20 percent off of each tip) and favours reputation (think Yelp reviews) over regulation, but despite much investor and customer excitement, the firm’s plan to disrupt the transportation status quo is also clashing with transportation authorities, some of which have even issued cease-and-desist orders.
SideCar may be from San Francisco and now making a splash here on the streets of Austin, but the battle over a new transportation economy is a familiar one in Vancouver, a city with a strained public transit system, an archaic taxi monopoly and no love for transport innovators. Those realities make SideCar an important barometer of the changing face of urban transportation.
I sat down with co-founder Nick Allen at the Austin Four Seasons.
Can you tell me how this got started? We spent a lot of time looking at the peer-to-peer economy, California passed a law that allowed peer-to-peer car rentals, so we had a company focusing on that, and it’s a tough business to make work. So we approached our co-founder out of the University of Michigan, who had done Android software to track vehicles. Three of us got together to build something consumer-facing. That was in the fall of 2011. Now we’re in San Francisco, Los Angeles, Seattle, Philadelphia and Austin. And very soon we’ll be launching in D.C., Chicago, New York and Boston.
Let’s talk about some of those war stories I’ve been hearing about: your drivers’ cars getting impounded, the cease-and-desist orders, the accusations you’re in violation of transportation codes, etc. In California, we got a cease-and-desist from the state, which regulates the limousine industry. On the face of it, we may look like a limo or a taxi. But it’s very clear in every regulatory code, a taxi picks up a hail, they have a meter that charges a specific fare. We don’t do that, so we’re not, by definition, a taxi. What we do is really just connect riders and drivers. We’re a technology platform first and foremost. And transportation is so important that innovation cannot be held back by regulation. Our argument is that as a technology platform, we should not be regulated.
So how do you pay drivers? We don’t charge a fare. It’s really a peer-to-peer network. It’s all donation-based. There are no shifts, there are no employees, they drive whenever they want, wherever they want. You go online and fill out a basic form, we run a background check on you, we meet you, make sure you have the appropriate insurance and make sure your vehicle is a newer model in good condition. And then you simply turn on the app whenever you want and if a ride is going in your direction, you can take it or not.
So regulators dislike you because they don’t understand you, but have you found any champions within the established transportation regime? The mayor’s office in San Francisco loves us. The mayor of New Jersey took a ride here yesterday. So we get lots of people who are supporting what we’re doing. It’s really just that innovation moves faster than the regulation can catch up and some of the regulatory bodies just get reactionary. I think in the long run their intentions are good, it is about public safety and fairness and we take those things very seriously. But we also defend innovation and we want to defend ride sharing. We will, if needed, have these battles. We’re working with the regulators to educate them. This has benefits for your community, for the environment, this puts money in people’s pockets. It is a huge benefit for the cities we go into.
Why have you made it a crusade to defend the sharing economy? It’s the right thing. It makes sense. There are all these assets and resources out there that aren’t being used very well, there are people who are underemployed or unemployed and this is a way to be smarter about our communities. That’s really important. And the smartphone is allowing us to do things we couldn’t do before. That needs to be pushed and defended, absolutely.
I’ve been hearing many entrepreneurs here at SXSW chant this mantra of “reputation over regulation.” Tell me how that works in your case. Every passenger and driver rates each other. And so you very quickly see if there are any bad actors. That could be as simple as someone’s car was dirty, or someone was rude. On occasion we get a passenger that treats a driver without the respect they deserve. It’s like getting a ride from a friend. Someone in their own car shows up, you sit in the front seat, people put [smartphone] chargers in their cars, people bake cookies to give to passengers. You do enter a credit card, so it’s a cashless system and when you get to your destination as a passenger, you literally just pay what you want. The idea of it is to offset the cost of your vehicle and that’s what drivers are doing.
So how do you move the needle in the absence of support from lawmakers or regulators? We’re just going to continue doing what we’re doing and pushing forward. The [customer] response has been great. In the end, we’re providing a safe, great service that people love and that most of these people really need. It’s really hard to get around Austin and just in the last couple of days we’ve given thousands and thousands of rides. That has made a lot of people’s experience here better than it would have been.
Any plans to launch in Canada? Yes, we have plans for Canada. I’ll keep those under wraps for a little while, but international expansion is something that we have on the horizon for sure.
More dispatches to come from Vancouver journalist Luke Brocki. His SXSW transportation of choice is, as always, a bicycle. It only took him one citation to learn not to ride it through the after-hours pedestrian zones on 6th Street. At least not while police are watching the intersections.