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GM Reportedly Acquired Technology And Assets Of Ride-Hailing Pioneer Sidecar | DrivingSales News

GM Reportedly Acquired Technology And Assets Of Ride-Hailing Pioneer Sidecar

January 19, 2016 0 Comments


GM is following up its $500 million investment in Lyft with another move to compete against the rise of Uber. According to Bloomberg, the automaker has now acquired the technology and the majority of the assets of the San Francisco-based ride-hailing pioneer Sidecar Technologies Inc., as well as bringing the majority of the company’s employees on board, including co-founder and Chief Technology Officer Jahan Khanna.

The price of the deal has not been disclosed, although Bloomberg reports that a person familiar with the matter said it was less than the roughly $39 million that Sidecar raised in its failing effort to compete with rivals like Lyft and Uber. A spokesperson for GM said that acquiring Sidecar’s assets and employees will support the Lyft alliance in addition to other efforts.

This acquisition is the latest move illustrating that carmakers see Uber’s growth as a threat to the traditional auto industry. GM’s president, Daniel Ammann, joined Lyft’s board as part of the deal when it recently invested $500 million in the company. Ford CEO Mark Fields says that his company is working on its own ride-sharing service, and in 2014, Daimler AG acquired German ride-sharing apps RideScout and mytaxi.

When Sidecar launched in 2012, it helped to introduce the concept of peer-to-peer car-sharing by allowing anyone who passed a background check to offer rides to customers. Back then, Uber was only brokering rides between users of its mobile app and licensed limousine drivers. Lyft was launched shortly after and Uber launched its own ride-sharing service, UberX, the following year.

However, Sidecar was unable to compete in the marketplace that it had helped to create. This demonstrates the power and aggressive tactics of Uber, which has offered monetary incentives to drivers that switched from a competing ride-sharing platform. Uber has raised more than $10 billion in financing and is now the world’s most valuable startup, with a recent valuation of $62.5 billion.

The failing Sidecar shifted its focus in early 2015 to handle deliveries for other businesses, such as Yelp’s food-delivery service Eat24, but the company was shutting down its services by late December.

“We are the innovation leader in ride-sharing despite a significant capital disadvantage, continually rolling out new products that set the bar for others to follow,” wrote Sidecar co-founder and CEO Sunil Paul in a blog post. “This is the end of the road for the Sidecar ride and delivery service, but it’s by no means the end of the journey for the company.”

Paul will not be joining GM as part of the acquisition deal.

Overall, GM appears to be focused on positioning itself against the threat of Uber by purchasing relative bargains in the ride-sharing sector, as Lyft is valued at tens of billions less than Uber, and Sidecar had become primarily a delivery service after it was unable to compete with Lyft and Uber. Considering the increasing popularity of ride-sharing, it’s not surprising that many automakers are seeking methods to tap into the growing market. GM already has a car-sharing program called “Let’s Drive NYC,” and it will be very interesting to see what the company achieves in this space in the future.

About the Author:

The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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