Ahead Of SXSW, Ride-Sharing Startup SideCar Prepares For Fight With Austin Authorities

By all accounts, next week’s SXSW Interactive conference should be huge for ride-sharing startup SideCar. The company will be partnering with a number of the biggest names in tech to provide free rides to and from parties being thrown during the event as a way to introduce the service to people who don’t live in San Francisco or have never tried out ride sharing. But recent actions by authorities in Austin could put a damper on the company’s coming out party.

SideCar is hoping to take advantage of the huge number of tech-savvy people descending on Austin next week as a way to educate people from around the country on the advantages of ride sharing. To do so, it’ll have a local community of drivers providing rides around town from 8:00 am to 3:00 am.

As part of the festivities from March 8 through March 17, SideCar will be giving free rides to and from some of the biggest parties during SXSW. That includes events from Twilio, Tumblr, Twitter, Livefyre, Mass Relevance, LinkedIn, The Raptor House, Text100, ShareThis, The Villa Austin, Tropo, Echo, The Backplane, Spotify, and Slacker Radio. (Yes, it’s quite a list.)

In addition to the parties, SideCar will be granting VIP access to some attendees during SXSW, giving them the ability to set their location as a free hotspot for three hours at a time. Those VIPs will be able to use the service to get free rides for themselves and anyone else going to or coming from “Spotlight” locations they’ve chosen. Those users will only be able to set one spotlight at a time, but anyone traveling to or from those destinations won’t have to pay to do so.

For anyone who’s ever tried to get around Austin during SXSW, the addition of a new fleet of SideCar drivers, in addition to the city’s licensed taxis, should be a welcome change. Due to the number of people who are in town over the course of the conference, taxis are generally in short supply.

But not everyone is excited about having a bunch of unlicensed drivers handing out rides around town. Earlier this week, SideCar received a cease-and-desist order from the city. And on Thursday, the Austin City Council voted to enable its police officers to impound the cars of unlicensed drivers who are found to be giving out rides for pay in violation of City Code 13-2-3 — i.e. the rule around operating licensed taxi services. That, of course, could put a damper on SideCar’s plans, as it relies on unlicensed drivers to make the service work.

Then again, Austin’s reaction to SideCar’s ambitious SXSW promo probably should have been expected. After all, the company entered the Austin market in part through its acquisition of local ride-sharing company HeyRide. And HeyRide was no stranger to controversy in the city — it too had a cease and desist issued against it by Austin authorities after it opened up for business last year.

Austin isn’t the first place where SideCar has faced scrutiny from local regulators or authorities. It got hit with a cease-and-desist order for operating in its home market of San Francisco last August, and later received a fine for violating the California Public Utility Commission’s charter party regulations. And on Monday, Philadelphia police impounded the cars of three SideCar drivers as part of a sting operation.

Despite the threat against its drivers, SideCar CEO Sunil Paul said the company won’t be altering plans for its big SXSW marketing push. It’s already discussed possible police action with drivers it has signed up in Austin, and has promised to support them by paying any fines incurred during the conference and providing legal help if necessary.

“We talked to our community of drivers there, and they are excited,” he said. “They are confident that what they are doing is right and they are excited to help support this rollout during South By Southwest.”

At the same time, SideCar is attempting to skirt around taxi regulations by paying its SXSW drivers as “brand ambassadors,” rather than compensating them based on the usual distance or time travelled while driving passengers around Austin. Since they’re being paid flat rates rather than per-ride, Paul doesn’t believe that those drivers should be in violation of the local taxi ordinance. Even so, he blamed Austin’s recent moves on pressure from the existing taxi lobby in the city.

“The complaints are coming from people with business models that they’re trying to protect,” Paul told me. But, he said, “the role of government is not to protect these business models.”

With all that in mind, a lot rides on next week’s SXSW promotion, as SideCar hopes to introduce its service to a whole new group of passengers from around the country. In addition to San Francisco and Austin, SideCar is in the midst of aggressive expansion to a number of new markets, including Seattle, Los Angeles, Philadelphia, New York City, Boston, and Washington, D.C. For riders in a number of those markets, SXSW might be their first experience with a SideCar, and the company is hoping that experience is a good one.