Sidecar raises $15M as Uber, Lyft duke it out
Looking to expand to more US cities and focus on its carpool feature, the peer-to-peer car service gets a wad of dough from several investors, including Virgin's Sir Richard Branson.
As Uber and Lyft battle to beat each other out, it appears investors are looking at a smaller ride-sharing service called Sidecar.
Sidecar announced on Monday that it raised $15 million to help fuel its Shared Rides carpool feature and a bigger expansion throughout the US. The round was led by Avalon Ventures and includes both Union Square Ventures and transportation leader and Virgin founder Sir Richard Branson.
"I like companies that are innovative, offer exciting customer experiences and make the world better," Branson said in a statement. "An entrepreneurial company like Sidecar can take on the big guys with innovation and big ideas, not just big bank accounts."
While Sidecar has now raised a total of $35 million, it's still in the small leagues next to Uber and Lyft. Uber is currently valued at $18.2 billion, and Lyft is valued at more than $700 million.
Sidecar's service is similar to Uber and Lyft with a couple of different tweaks, such as letting users pick a specific driver. The service is currently only in a handful of cities. It appears, however, that Sidecar's investors aren't worried about competition from Uber and Lyft.
"It has been reported this is a winner takes all market, but it's not," Branson said. "These are early days and, like a lot of other commodity businesses, there is room for innovators on great customer experiences. Sunil and Jahan and the team have the potential to make a real difference in the market."
Branson has also backed a company called Hailo, which is a mobile app created to help users find taxis and taxi drivers to get more passengers.
Sidecar began testing its carpool feature, dubbed Shared Rides in May. The idea is to match users with a nearby rider heading in the same direction, so that they can share the fare. Sidecar said that 13,000 people requested a Shared Ride in its first month and now thousands of matches are being made each week. The company officially launched this carpool feature last month.
Both Uber and Lyft also announced carpooling features in August. However, last week, the California Public Utilities Commission issued a warning to all three companies saying the carpool feature is illegal under California law. If the companies want to offer carpooling, they first have to request an adjustment to their existing CPUC permits or petition the state legislature to modify the law.
It's unclear how the car-sharing services will work things out with the CPUC. However, it appears Sidecar has no intentions of slowing down. The company said that with its new funding, it expects to match 500,000 Shared Rides in one year.
"Technology has turned transportation on its head," Branson said. "We don't need to own cars, services like Sidecar can get us around town. And Sidecar is developing an every day travel solution that sits side-by-side with public transit."