Uber Competitor Sidecar Is Shutting Down
Co-founders Sunil Paul and Jahan Khanna wrote in a post on Medium that Sidecar would end service at 2 p.m. PST on Thursday.
The founders called the startup's end "a bittersweet victory" and said they planned to "lay the groundwork for the next big thing."
Sidecar spokeswoman Margaret Ryan declined to comment on what the "next big thing" would entail or if any Sidecar employees would be a part of it.
Founded in 2012, San Francisco-based Sidecar launched the original model of the ride marketplace, through which passengers could use a smartphone app to hail a ride at a fraction of the cost of a taxi. It was the first test of what would eventually lead to UberX and Lyft.
Sidecar was the only app to show passengers the cost of the ride and allow them to choose a driver based on price. This month, Lyft began offering passengers a fare estimate in its redesigned app.
Sidecar also did not raise fares during peak demand, a practice known as surge pricing that is used by Lyft and Uber.
The company was unable to catch up with Uber and Lyft, which raised and spent more money and embarked on fierce marketing campaigns while Sidecar spent its cash on technology.
Unlike its competitors, Sidecar did not aggressively seek a high valuation, but that left it with less cash to grow.
"For most companies, the problem they have now is they raised too much money and the valuations are too high and they don't grow into them," said Michael Romano, vice president of investor relations for Lightspeed Venture Partners, an early Sidecar investor. "Sidecar was always very disciplined. Uber just spent more money than them and spent it faster."
Sidecar raised about $35 million from investors that also included Union Square Ventures and Avalon Ventures.
Lyft has raised $1.3 billion and Uber has raised $7.4 billion, with another $1 billion round in the works.
Facing mounting competition, Sidecar earlier this year launched same-day deliveries of everything from groceries to flowers, and it partnered with startup Meadow to deliver medical marijuana.
In August, the company became primarily a delivery service for businesses and it struck an agreement to deliver from 7-Eleven.
(Reporting by Heather Somerville; Editing by Leslie Adler)
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