Peer-to-peer ride service Sidecar is betting that not everyone is looking for the cheapest ride when it come to an on-demand car service.
The company launched a new marketplace model Wednesday that lets drivers set their own prices, a venture that could help Sidecar drivers dip into the some of the surge pricing that competitor UberX is known for, or make just enough to cover travel expense.
Sidecar CEO Sunil Paul said the choice will be up to drivers and passengers. With the newly designed app -- and $10 million in new funding from investors -- Sidecar users will be able to choose a ride based on several criteria: the lowest price ride, the closest ride, and the most recommended driver.
Paul said the company tested the new business model in Los Angeles and Chicago and that the results show that it's not always about low prices.
"Price is definitely important," Paul said. "But sometimes you want the nicer ride, sometimes you want the bigger capacity. Sometimes, you want the guy with the Harry Potter audio books."
In addition to the set search filters, the app will show large images of the car, a photo of the driver, and a short bio blurb (Sidecar calls it a "bumper sticker") that drivers can use to sell their ride. The new app also comes with more accurate GPS tracking so passengers no longer have to enter their starting location when they order a ride -- something that made the car-ordering process slower than other services in the past.
Since its launch two years ago, Sidecar has tried to stand out from competitors by touting its price estimates. It's the only service that asks you to input your destination and then calculates how much the ride will cost before the passenger is picked up. Its drop-off area feature lets the more causal drivers pre-set where they want to do drop-offs in case they just want to a ride while on their commute to work or commute home.
The new model will still have these feature, Paul said, but the new features will give consumers more choices and help drivers make more money.
The company has been operating the new app in Los Angeles and Chicago for less than a month and is already seeing a 50 percent increase in driver hours, which means drivers are choosing to be on the road more often. LA drivers are reporting a 20 percent increase in rides, while Chicago drivers say they are up 60 percent, according to Sidecar.
The new system further incentivizes drivers to do well on each trip. If a passenger favorites a driver, the drivers will show up at the top of his or her ride list when they are nearby, under the "recommended section."
The new marketplace doesn't come at an easy time for the nascent industry. All the companies have faced scrutiny from regulators and the taxi industry, and questions around driver insurance policies and safety concerns. All the companies are working together to try to address these issues quickly.
Fred Wilson, a managing partner at Union Square Ventures, said brushes with regulation is something that comes with industries that are shaking up traditional business models, but people are showing that they want services like Sidecar. His venture capitalist firm, which also invests in marketplaces like Etsy and Kickstarter (as well as taxi-hailing app Hailo), is the latest company to back Sidecar.
Wilson is quick to say some people will simply prefer the more formal service offered by a company like Uber, which runs UberX, but some will want something more personal.
"I got a ride from SF to the airport from a Sidecar driver who was a musician...we had a conversation about jazz. It was great," he said. "That's the kind of thing that some people want to do and some people won't want to do. I think it's a different experience. It's not going to be for everybody."
Paul hopes what this new model will do is take peer-to-peer ride services to the next level. He thinks Sidecar can do for ridesharing, what Etsy did for niche e-commerce and what Airbnb is doing for travel.
"Just like Etsy or Airbnb, you can rent out a room once a week or once a month, or you can be a professional landlord," he said. "Now, you can give a ride once a day or once a month, or you can make a living."
Those are some worthwhile goals. While it's still not certain the mainstream public is ready for a peer-to-peer ride service platform, opening up a marketplace lets Sidecar drivers advertise a range of experiences that could fall right into their competitors' sweet spots: the luxury experience for UberX, and the quirky, fist-bumping attitude of Lyft.