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

Does that mean I get a refund?

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(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.”