A New Threat To The Industry: SideCar

Posted on July 11, 2012 by LCT Magazine

Most operators should have Uber on their radar by now, and if they don't, they need to, because the on-demand car hire service is disrupting the chauffeured car industry through its innovative smartphone application. It's available in many major metropolises across the United States and has recently conducted a soft launch in London.

But while Uber is getting all the attention, another potential threat to the chauffeured car industry lurks in the shadows: SideCar.

SideCar is a smartphone application that operators like most on-demand ground transportation apps on the market today, but with one twist: the drivers are not professionals and they use their own personal vehicles.

In a New York Times blog post, Side Car is called a "car sharing" service, when in fact it is not. SideCar not only provides a car, but also a driver, whereas a true car sharing service will only provide a vehicle for the client to drive him- or herself .Joshua Brustein, author of the New York Times blog post about Side Car, says the service is "potentially more disruptive [than Uber] because it cuts out professional drivers altogether."

SideCar's website says that every driver has a driver's license, is background-checked and tracked with GPS, and that vehicles are insured. But other than that, there is nothing that says drivers have the proper federal, state and local permits to allow the commercial transporting of passengers. It also doesn't specify any minimum level of insurance, and since SideCar is soliciting the services of the average Joe in his own personal vehicle, chances are insurance is minimal. It's basically a formalized version of, "Hey, I'll give you a ride if you throw in on gas money."

SideCar is basically a taxi service that operates outside of any formal transport carrier regulations. While this may seem more of a threat to the taxicab industry, it still potentially can undermine the chauffeured ground transportation industry because it gives illegal limo businesses a new way to operate and a new source of clients.

As it stands now, there is nothing to stop me from getting a Town Car, joining SideCar's database and offering low rates for a ride to LAX or around the city. I don't have to get any special permit or operating authority. It would seem like I was just giving a friend a ride. The problem is that my passenger is not my friend, and is in fact a customer that pays me electronically through the app. And that customer could potentially have been your customer.

While Uber is a huge threat to the industry as we know it, I think it will help improve the landscape of limo world by forcing operators to evolve their services by adopting better technology, responding to more on-demand requests and cranking up service levels to compete with Uber, all of which ultimately benefit the client. But I don't see any potential benefit to SideCar; it's a danger to legitimate ground transportation providers and passengers alike.

SideCar bigwigs are operating like a transportation broker, i.e. a "charter party carrier", and may themselves be operating illegally. Its drivers don't play by the same rules as professional companies and have an unfair advantage in finding clients and earning profits.

Michael Campos, LCT associate editor

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