Ride-sharing startup SideCar received the first enforcement action against it since launching in the city in March, as a couple of its drivers were stopped by police over the weekend. In response, the company is asking its users to reach out to the New York City mayor’s office.
In a blog post this morning, SideCar told the story of two of its community drivers being caught in a sting operation by New York City police Friday night. In one of these incidents, a brand ambassador named Sandra had her car blocked by police vehicles after giving a free promotional ride near Webster Hall. The community driver received a citation from the police officers, and had her car impounded. In the other case, a community driver name Kristy had her car surrounded by police officers in East Midtown Saturday night.
SideCar is blaming New York City’s Taxi and Limousine Commission for these actions, which it calls “aggressive” in the blog post. In an effort to combat the enforcement activities, the company has asked its users to call, email and tweet at the city’s mayor in support of ride sharing.
This isn’t the first time SideCar has come up against regulators in new markets. In Philadelphia, the local Parking Authority cited three of its drivers and impounded their cars in a sting operation that sounds a lot like the one that just happened in New York. Right before SideCar embarked upon a big promotional kick at SXSW, the Austin city council passed an ordinance increased the penalties for existing violations of the Transportation Code to include impoundment. SideCar ended up suing the Austin Department of Transportation because it says the department was “misreading the existing Code as making ridesharing illegal.”
Heck, even in its home market of San Francisco, SideCar and other ride sharing providers came under heat from the California Public Utilities Commission, receiving a cease-and-desist and citation for operating an unlicensed charter party carrier. That was before the California regulator reversed course and actually began the process of reviewing ride-sharing apps with the possibility of creating a new regulatory framework that includes them.
For its part, SideCar argues that it isn’t operating a “for hire” service, and as a result doesn’t fall under the New York TLC’s jurisdiction. In contrast, it says it merely operates a service that matches up passengers who need rides with drivers who have rides to give. In contrast to local taxi or black car companies, SideCar says it doesn’t mandate driver shifts and employees drive their own cars. SideCar also says payment is a voluntary donation, not a regulated fare, and that compensation is solely at the discretion of the passenger.
That might be true, but it does a lot of things that make it look a heck of a lot like a taxi service — it does background checks and screens drivers before adding them to the system. And while the “donation” is voluntary, its marketplace has a two-sided rating system, which means that if passengers ever want to get a second ride on the platform, they’re likely to pay the suggested fare.
SideCar says it’s been in discussion with the TLC since launching in New York City — and its CEO, Sunil Paul, will be in discussion with them later this morning, when he gets on stage with me and TLC deputy commissioner Ashwini Chhabra live at Disrupt NY 2013. And it maintains that SideCar, and ride sharing in general, should both be legal in the city. We’ll see what the TLC has to say about that. Tune in at 9:55 ET this morning for our panel discussion with SideCar, the NY TLC, and Hailo CEO Jay Bregman.