GM Acquires Sidecar’s “Essential” Ridesharing IP, Key Employees
Bay Area ridesharing pioneer Sidecar was back in the news this morning, when it was announced that General Motors has acquired the recently shuttered startup’s technology and assets. The value of the deal was not disclosed, but a source close to the situation told Bloomberg that “it was less than the roughly $39 million that Sidecar raised in its failing effort to compete with much better-financed rivals like Uber and Lyft.”
On Dec. 29, Sidecar founder Sunil Paul said in a post on Medium that the company would cease operations, effective Dec. 31. “We are the innovation leader in ridesharing despite a significant capital disadvantage, continually rolling out new products that set the bar for others to follow,” Paul wrote in the post. “This is the end of the road for the Sidecar ride and delivery service, but it’s by no means the end of the journey for the company.”
During CES a few days later, GM announced a strategic alliance with San Francisco-based ridesharing company Lyft to create a network of on-demand autonomous vehicles after a $500 million investment through GM Ventures. GM president Daniel Ammann joined Lyft’s board as part of the deal.
GM told Bloomberg it is bringing on board roughly 20 employees from the Sidecar team, including co-founder and chief technology officer Jahan Khanna, to “support the Lyft alliance” and assist with GM’s in-house efforts to develop ridesharing technology—another sign that mobility has become an increasingly significant part of automakers’ growth strategies as car ownership becomes less popular, especially among young and city-dwelling customers. (Stay tuned for Xconomy’s Detroit auto show wrap-up later this week, which will focus on how mobility innovations are affecting the auto industry.)
According to Bloomberg, GM is developing its own set of transportation services called Maven, which may allow GM-vehicle owners to give rides to other passengers commuting in the same direction, with Ammann reportedly taking charge of the project.
Buried at the end of Bloomberg‘s story was an interesting tidbit: the anonymous source said GM will also get a license to a patent granted to Sidecar CEO Paul in 2002, entitled “System and method for determining an efficient transportation route.” According to the story, “Sidecar executives believed the patent covered the essential intellectual property behind ride-sharing, though Uber and Lyft never responded to Sidecar’s repeated attempts to enforce the patent, this person said.”
One would presume GM has more than enough financial and legal resources to enforce the patent. Whether it does—and what that would in turn mean for Lyft competitor Uber—remains to be seen.