Sidecar, a pioneer in the ride-hailing market, is shutting down its ride and delivery operations on Dec. 31, its co-founders Sunil Paul and Jahan Khanna announced today.
The news leaves heavily-funded startups Uber and Lyft to battle for supremacy in the growing market, but Paul, the company’s CEO, points to Sidecar’s role in shaping the industry — including launching a ride-sharing app, creating a marketplace for users and drivers, winning regulatory victories, and adding a delivery component to its ride-sharing business.
“I’m extremely proud of our team and all that we’ve accomplished,” Paul wrote in a post on Medium. “We are the innovation leader in ridesharing despite a significant capital disadvantage, continually rolling out new products that set the bar for others to follow.”
He added, “Our vision is to reinvent transportation and we’ve achieved that with ridesharing and deliveries. It is, however, a bittersweet victory. Shutting down the Sidecar service is a disappointment for our team and our fans. The impact of our work, however, will be felt for generations to come. We changed transportation law, and created a new mode of transportation that has transformed cities and made life easier and better for millions of people.”
But Paul seemed to leave open the possibility for Sidecar to pivot to a new business model, saying, “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.”
Indeed, Sidecar introduced many new ride-hailing innovations that Uber and Lyft would later implement, like carpooling, for example. It also stayed away from surge pricing and showed customers ride rates before they hailed a driver.
But the company’s ride-hailing product couldn’t compete with Uber, which has raised more than $6 billion, and Lyft, which has raised $1.25 billion.
In response, Sidecar rolled out a B2B play earlier this year, partnering with companies like Yelp-owned Eat24 that tap into Sidecar’s API to offer delivery of everything from groceries to flowers to medical marijuana. Deliveries soon became Sidecar’s primary focus, with the company noting in August that it had the “largest B2B on-demand network in the U.S.” and was on track to reach 200,000 total deliveries by this fall.
Still, though, that wasn’t enough. Sidecar raised $35 million since launching in 2012, most recently reeling in $15 million in September 2014 from Avalon Ventures, Union Square Ventures, Virgin Group founder Richard Branson, and others.