GM Confirms Sidecar Acquisition As Auto Makers Take Tech Ambitions Up A Gear

Hot on the heels of its $500 million investment in transportation startup Lyft, General Motors has acquired select assets of Sidecar, a would-be Uber and Lyft competitor that went bust in December with a hint that this was not the end.

The GM news, first reported by Bloomberg, was confirmed to TechCrunch directly by GM.

“In connection with Sidecar ceasing operations, we can confirm that we have attracted Sidecar employees to be integrated into the GM urban mobility team, and acquired certain related assets, for work on our global mobility programs,” a spokesperson said. “We have no further details to share at this time.”

Bloomberg reports that GM plans to use the acquisition to help build its own transportation services under a new brand, Maven. The deal will include around 20 employees — including CTO and co-founder Jahan Khanna but not CEO Sunil Paul — as well as IP and other assets from the startup for a price that was less than the $39 million raised by the startup from investors that included Lightspeed, Richard Branson, Lerer Hippeau and Mark Pincus.

GM’s decision to invest in owning some of its own IP and staff working on ridesharing is an interesting development that underscores the evolution carmakers are undergoing as they face up to competition from technology players in all of the different aspects of car technology: not just in ridesharing and transportation services, but location services and autonomous vehicles, too.

The “car as connected hardware” has been a theme for a while now, with a number of automotive and tech companies pairing up to develop on-board systems to play music, navigate routes, and of course help you make and take calls while on the road. Companies like Apple, Nokia and Google have been working with companies like BMW, Ford and others for years.

But more recently, tech companies appear to have taken a more independent turn. Google has made no secret of its self-driving car developments, and while Apple has not talked openly at all about what it is doing, there have been plenty of signs that it’s been working on its own autonomous driving vehicle concept.

Another major player in autonomous cars, the new-generation car company Tesla, may not be a tech company strictly speaking but it is created with tech DNA, as it was founded by a co-founder of PayPal. We’ve heard that Tesla attracts many of the bright sparks coming out of universities interested in working on engines.

“GM’s problem now is that … no one who wants to work on engines goes there and they’re losing most of their expertise in the next 3-4 years because of retirement,” one engineering graduate observed. “They splash out loads for recruiting events etc., but good candidates go there and see their offices and team structure and walk straight out to Tesla/Mercedes/Google.”

Accurate or not, that is part of the perception that GM now needs and wants to change.

Turning to companies that are associated more with apps and software, the Ubers of the world have thrown a spanner into the works not just by becoming a force for getting transportation on demand — but by doing so efficiently enough that some might even start to question whether they need to own a car for themselves in the first place, pointing to a direct threat to the likes of GM.

And with the advances of machine learning, artificial intelligence and sensors that can read and parse more and more data, the number of tech companies getting involved is only growing. In one recent development, IBM used last week at the Detroit Auto Show to show off how it’s looking to apply Watson to improve self-driving cars and driving in general.

The company has developed an application of Watson that enable automakers and infotainment suppliers to deliver cognitive driving experiences: it can be used to power cars that learn a driver’s behaviors, as well as cars that sense and respond to the vehicle and the surrounding environment to improve safety. It’s doing this by using various sensors to track and understand a person’s driving habits, and then processing that data in real-time, while also getting feedback through natural language interactions.

This is a notable development that you can see potentially getting applied to how autonomous cars are able to drive themselves: one of the big complaints I’ve heard from people who have driven in them is that they are “too robotic” and don’t take into account enough environmental information. The kind of tech that IBM is working on with Watson could be one way to help solve that.

All of this is leading to some interesting moves on behalf of the automotive players. GM, unsurprisingly, does not feel threatened by it, as least publicly.

“I think [automotive is] an interesting, dynamic industry, so it doesn’t surprise me that other people are looking at it,” GM CEO Mary Barra told me in an interview earlier this month (embedded below). “[But] we’ve been in the business of vehicles for a long time.”

Still, although GM’s Sidecar acquisition is relatively small, it’s a signal of how it would like to be the one controlling the tech that runs in (and perhaps runs) their vehicles. GM is not alone. Last year’s acquisition of Here, the mapping division of Nokia, by a consortium of car makers, is another example of how car makers want to make sure that they — not the Googles or the Apples of the world — are able to call the shots on all of the location data that will become so central to cars of the future.

When I talked to Barra earlier this month, she would not be drawn out on whether its investment in Lyft included any option to buy the company, but I would not be surprised if we saw bigger and more tech acquisitions by car companies down the road.