PPA Sting Operation Shuts Down New Google-Backed “Ride Share” Service SideCar [Updated]

Does that mean I get a refund?

(Update: Scroll to the bottom for a response from SideCar CEO Sunil Paul and an official comment from a PPA spokesperson.)

This morning, I was planning on writing a review of SideCar, the San Francisco-based “ride share” service that debuted in Philadelphia two weekends ago. As a loather of Philadelphia’s, er, crappy taxi cabs, I’m always interested in an alternative, and I’m big fan of Philadelphia car service Uber. But on Saturday night, the Philadelphia Parking Authority shut SideCar down, and I’m not the least bit surprised.

The idea behind SideCar is pretty simple. As with Uber, you download an app and register a credit or debit card. When you’re ready for a ride, you just tell the app where you are (the GPS rarely guesses your precise address in the city), and it matches you with a driver, a regular guy or gal with a regular car who didn’t go through any official process to become a professional driver. On the screen, you see an estimated pickup time and photos of both the driver and the car. The driver picks you up and takes you to your destination.

After you get out, the app asks you to rate your driver and also provides a “suggested donation,” which you can raise or lower. The suggested donation is much lower than an Uber fare and is comparable to a taxi fare but includes tip, so it’s actually lower than cab fare, too. The driver also gets a chance to rate you, so if you smell bad or underpay, you’re not going to be well liked by the SideCar drivers.

I used SideCar several times over the weekend. On Friday night, I took it from 15th and Walnut to 5th and Spring Garden to see Theatre Exile’s fantastic new show The North Plan. The driver used his handheld smartphone for half of the ride and wasn’t wearing his seat belt. I paid the suggested donation of $8.

On Saturday, I went barhopping with Fergus “Fergie” Carey, and we used SideCar twice. The one driver, who picked us up in a Cadillac STS with a handicap placard hanging from the rearview mirror, had absolutely no clue where 21st and Green was (even after we told him exactly where it was, repeatedly), and he wasn’t wearing his seat belt. I paid the suggested donation but gave him the lowest rating, and SideCar gave me the option to block him for future pickups, which I did.

Our last SideCar driver of the evening picked us up in a sporty black Mercedes, which was nice, although he wasn’t wearing his seat belt, and he also took car-clogged Chestnut, after I told him to take Market. Halfway through our ride, he got a call from SideCar. He was told: “Drop off your passengers immediately, and do not pick up anyone else.” SideCar Philadelphia was offline for the rest of the weekend.

This morning, a Philadelphia Parking Authority employee explained why. On Friday night, the PPA sent undercover inspectors out to use SideCar. Yes, a real live PPA sting operation! The PPA has jurisdiction over all taxis and limos in the city, and SideCar did not bother to get clearance from the PPA to operate here.

“They can’t do this,” my PPA source told me. “They have absolutely no authority to operate here. They have nothing. Their insurance is not even close to what it has to be. There are no proper background checks.” The PPA impounded three vehicles on Saturday.

I’ve asked SideCar for comment repeatedly, but I’ve received none. I did ask one of my SideCar drivers to explain to me how the company could operate in Philadelphia without PPA oversight and authorization. He explained that SideCar is merely an app and that he is an independent contractor with his own insurance. (He also told me that SideCar was paying drivers $15 per hour during the introductory period and that he had to pay 20 percent of each fare to the company). He added that he’s not charging anyone for the service. People are just taking a ride and “donating” whatever they want. Yeah. Nice try, fella.

Still, SideCar is no fly-by-night operation. In 2012, the company raised $10 million in financing, part of it from Google Ventures. And SideCar is all the rage in San Francisco, although it has had its share of legal problems there as well. Its road in Philadelphia is uphill to be sure. After all, we don’t take kindly to newcomers.

Updated [4:05 p.m., 2/25/13]:

In a blog post on SideCar’s website, SideCar CEO Sunil Paul made the following statement:

SideCar’s mission is to make transportation safer, sustainable, fun and better for our communities. We’re surprised and disappointed to tell you that the defenders of the status quo aren’t quite on board yet in Philadelphia.

On Saturday, SideCar was the target of an orchestrated sting operation conducted by the Philadelphia Parking Authority (PPA), which regulates taxis. Three everyday drivers in our community were given hefty citations and had their cars impounded, leaving them alone in the dark and cold in need of a ride home. The citations wrongly assert that SideCar and its community of drivers and riders is an “unauthorized service provider.” SideCar is a technology platform that enables peer-to-peer ridesharing. Our smartphone app instantly matches people who need a ride with regular, everyday drivers who are willing to give them one. With SideCar, payment is voluntary and you pay what you want. SideCar is safe. We run more checks on our drivers than taxi or limo services. Plus, all matched rides are recorded and GPS tracked for safety.

Transportation is too important to blindly close the door on innovation. The actions on Saturday night will not distract us from our important mission to revolutionize a transportation model that hasn’t innovated in almost half a century.

SideCar chose Philadelphia as its first East Coast city because of its reputation as a center of innovation and its forward-looking government. We remain confident these characteristics of this great city will prevail over the defenders of entrenched interests threatened by progress and the unknown.

The success of the emerging sharing economy depends on the ability to share resources with others using technology. SideCar is a leader in this new space. In less than one year we’ve become the largest instant rideshare community in the U.S., matching more than 100,000 rides. We understand that the sharing economy is new to regulators and that some will misunderstand the model or perceive it as a threat to the companies they regulate. As we sort things out with regulators, SideCar will continue to operate in Philadelphia so its citizens can continue to experience the benefits and joys of rideshare.

We look forward to continuing and expanding our conversations with city and civic leaders.

Ride On!

Updated [5:30 p.m., 2/25/13]: SideCar spokesperson Margaret Ryan has told the Business Insider that “SideCar is still operating in Philadelphia.” PPA spokesperson Marty O’Rourke was surprised to hear this. His response: “If they are found to be operating in the City of Philadelphia, they will be impounded and cited. This is an issue of public safety. This company is operating illegally. They are flagrantly violating the rules and regulations set up to protect citizens of Philadelphia.”

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  • Mark Rose

    I think the article opens up the issue… “As a loather of Philadelphia’s, er, crappy taxi cabs,” Hats off to SideCar for stepping up to improve the market…

  • Josh Mckibbin

    The PPA claims that this is a matter of safety. Pure BS. They are just upset that they aren’t getting a cut.

  • laughtiger

    Obviously these are just illegal taxis. Not much of an “innovation” there…

  • Dave Sutton

    Congratulations to the PPA for moving so quickly to protect Philadelphia passengers. It should be more surprising that SideCar simply launched into operations without bothering to get regulatory clearance from the PPA–but it’s not. It’s a move that’s straight out of the Uber playbook. So is dispatching drivers to pick up passengers and all the while maintaining the company is just a “technology platform.”

    Get serious: A “technology platform” affects a machine. SideCar coordinates drivers and passengers–it puts two strangers together in a vehicle. Controlling this arrangement is a matter of public safety and exactly what the PPA is supposed to do. If you can’t quickly imagine what can and will go wrong placing non-professional drivers without proper background checks together with passengers asked only to make “voluntary contributions” then you just don’t understand the taxi industry.

    • matthew manahan

      The company runs proper background checks on all its drivers.

  • http://www.facebook.com/gregg.fox.77 Gregg Fox

    The side car drivers should realize, their insurance companies will not pay claims, as personal auto policies include a clause saying they do not cover vehicles for hire. And if you think you’ll win that one, think again. Congrats to the PPA, call it you want Sunil, but a gypsy with a smartphone is still a gypsy. Pack your illegal bags and let legitimate operators earn their living.

    • Ryan

      So the liability rests with the person electing to take the ride, no? The problem is, you don’t believe in individual liberty or personal responsibility. If I want a stranger to drive me around in the city, that is my business and I am responsible for my choices. Don’t stick your nose where it doesn’t belong–in other people’s lives.

      • steve

        Your logic is why we have regulations. Nothing stops you on taking a ride from a stranger other than common sense. A couple serial rapest, fake ID s and laundered credit cards and you will see why we have regulations. Hopefully, you , your wife or daughter will not be the victim. Everyone wants personal responsibility until they are injured. Then it do you know a good planiffs attorney .

        • ryan

          So typical that the statist tries to tell me that I don’t believe in personal responsibility. You completely failed (neglected) to explain why my logic leads to regulation. The fact is, I cannot accept a ride from this company because I am not permitted to. The premise that rape is even likely in this scenario proves you know exceptionally little about google ride-share. For the record, serial rape, fake IDs and laundered credit cards are already illegal. Google Ride-Share wouldn’t change that. As a statist, you are addicted to the idea of victimhood and you insist I will be one if I don’t let the oh-so-virtuous city of Philadelphia take care of my taxi service. Forget the fact that the worst drivers in the city are cab drivers and they just so happened to ruin my mother’s career and, ultimately had such limited liability that my mother didn’t recoup even a full year’s salary. No surprise that you, Steve the statist, don’t have facts on your side, I just prefer you didn’t open your big, ignorant mouth.

          • steve

            So did you sue for your career or mothers lost wages ? Appears as I expected you don’t walk the walk. You talk about personal resposible but really want to be protected. That is normal and why regulations exist to protect the weak. You may have personal problem with taxis but make the case for regulation. Sorry I hit a hot button but the point has been made. I guess my mouth should not be used unless it agrees with you, best regards

          • steve

            You do understand he sidecar Internet agreement gives you no rights to sue them no guarantees that the driver has been vetted or is who they say they did a background check on ?

          • ryan

            You are too stupid to even anticipate this answer, but we accept the outcome. The cab had inoperable seat belts and the driver ran a red light and smashed into another car causing my mom to brace herself against the plexi-glass and ruin her wrists. She won her suit,
            None of that is the poiint.
            She entered into an agreement, the agreement worked out poorly for her, she pursued a legal/equitable outcome and she accepts the final result. She entered into a contract by choice and she should be allowed to choose a different contract with a different company to obtain the same service.
            Now piss off.

          • steve

            So get ride of all regulations and have no rights? This is the transportation business and sidecares’ amateur drivers are going to run red lights and have issues. Difference is that you had rights in the cab for what happened to your mother. She was the victim and for that I am sorry but your anger is mis channeled to a business model that puts people at more risk not less.

          • ryan

            Where do I mention that I want to get rid of all regulations? Only a statist would contend that, somehow, regulations translate to rights. The notion that enterprising citizens, who have no trouble driving themselves every day of year, would all of a sudden become law-breaking drivers is absurd. My anger is channeled at you: the barely-literate statist that tried to stir the pot 3 months after the original post. I don’t need helpless fools like you–unable to determine who can best drive you around the city–to make decisions for me. I want the liberty to make a simple choice and live with the consequences: a scenario you cannot comprehend and are too afraid to embrace.

          • steve

            What regulations would you suggest side car follow ?

            How do you know who is driving the car ?

            Who do you think will be the average side car driver ? Someone who needs money or someone who is well off driving drunks around town ?

            Sorry I have stirred your pot ?

            I may not be literate in your view but I am not offensive like you .

  • http://www.facebook.com/tracie.crisante Tracie Crisante

    But isn’t “innovation” going to protect the rider? Who cares if the driver is a convicted felon as long as you can call a nice car on an app right? In case no one gets the nuance….my first two comments were sarcasm. These are EXACTLY the same as illegal taxis and why the PASSENGERS don’t understand the concern for their safety is beyond me.

    • matthew manahan

      The company runs background checks so there is no way they would be a convicted felon. Plus each vehicle is tracked on the GPS at all times so in a way, yes, “innovation” is protecting the rider.

      • steve

        You don’t know much about background checks. Have you any idea how easy it is to get around an Internet background check. Professional drivers go through city , state and federal background checks done by the police.

        Regarding gps. It only works if the phone is on. If I am going to hurt you or rape you, probably not going to accept the ride per say and I am not going to leave my cell phone on.

        Then again, I lost my cell phone sir and someone else was using my account. Taxi cab companies use cameras to protect the riding public and the driver.

  • Guest

    As a former Philadelphian myself, I’m more likely to get injured or killed on the streets of the Mean City than injured by a Google-funded startup operation that isn’t paying “protection money” to the notoriously corrupt PPA.

  • gregg

    I believe in both Ryan.Would you sign a waiver saying you wont sue if you’re hurt while taking the ride? If you would then side car is for you.

  • Rosario Ross Cracchiolo

    i worked for Germantown cab and a child molester worked there.also i knew a guy that had felonies so what is the ppa talking about? background checks? sure ppa