SideCar Acquires Austin-Based Ride-Sharing Startup Heyride, Will Soon Launch In 7 New Markets

Ride-sharing startup SideCar is getting serious about expanding into new cities throughout the U.S. The company just acquired Austin, Texas-based Heyride to help it improve its product and introduce service in that market, and is announcing plans to roll out ride-sharing in Los Angeles and Philadelphia this weekend as well.

SideCar offers a set of mobile apps that allow users to electronically hail rides, basically connecting drivers and passengers with one another. It also manages identity and ratings of drivers and passengers, ensuring users aren’t getting into cars with drivers who are dangerous, unsafe, or otherwise creepy. And it facilitates payments (ahem, donations) for those rides, so that passengers can seamlessly give cash for the transportation provided.

After launching in San Francisco last summer, the startup has seen a fair amount of success. Now it’s looking to take its service into new markets. SideCar rolled out in Seattle in the fall, but plans to very aggressively enter a number of new markets over the next few months.

That expansion starts this weekend, as SideCar will being offering service in Philadelphia, Austin, and Los Angeles. At first, SideCar will only provide rides on the weekends, as it recruits drivers to support demand in those new markets. Not long after, the company expects to launch in other cities around the country, as it is actively recruiting drivers in New York City, Chicago, Boston, and Washington, D.C.

In addition to new launch markets, the company is announcing the acquisition of Austin-based startup Heyride. Like SideCar, Heyride has built mobile apps to enable ride-sharing services. While providing support in Austin is a nice bonus, SideCar founder Sunil Paul said the acquisition will help improve its own apps and service.

“We are bringing on this talent to improve our design and user experience in the app and in the vehicle,” Paul told me by phone. “If you play with the [Heyride] app, it’s really beautifully done.” SideCar is adding four Heyride employees to its roster, including two who will become part of the San Francisco team, and two who will stay on in Austin. The company will also have a city manager to handle local operations in that market.

(As a side note, SideCar plans to be fully operational in time for SXSW, which will be a blessing for anyone who has ever had to get from one place to another in that city during the week-long convention.)

SideCar’s expansion comes not long after raising $10 million from Lightspeed Venture Partners and Google Ventures. But it’s also being announced as competition heats up in the urban transportation market generally, and among ride-sharing services in particular. After raising $15 million of its own, San Francisco-based competitor Lyft entered a second market by launching its ride-sharing service in parts of Los Angeles late last month.

Meanwhile, emboldened by a deal with the California Public Utilities Commission, on-demand car startup Uber said it, too, would get into the ride-sharing business. And that’s not mentioning the fast emergence of taxi e-hail apps like Flywheel and Taxi Magic, all of which will provide a number of alternatives for residents in urban areas.

But it’s not just the competition that SideCar has to worry about: Like Uber before it, the company is also likely to face regulatory scrutiny in many of the new markets it enters. It’s notable that local authorities in New York City, Boston, and Washington, D.C. all took issue with Uber when it launched in those cities.

While SideCar has briefed local officials in many of the cities it intends to enter, Paul said he is lawyered up and ready to fight any regulatory battles that the company will face. “This is a new idea and just like other technological battles in the past… new innovations almost always have to battle against the status quo,” he said.

That said, SideCar continues to stress that it is a legal service, according to ride-share provisions in most locations. For one thing, drivers aren’t supposed to make a profit over and above the cost of operating and maintaining their vehicles. Also, unlike some other services, both driver and passenger have agreed on a destination that they’ll travel to before the passenger is picked up. “We’ve always maintained that what Sidecar does is legal and we’ve set up a system that enables drivers to comply with ride-share rules in all 50 states,” Paul told me.

We’ll see if regulators and local governments agree. In the meantime, isn’t it fun to watch all these startups battle it out, and at the same time, fundamentally change the way we all get around?