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January 20, 2016

GM buys more ride sharing tech and assets

General Motors has followed up its US$500million spend on Lyft with another move to fortify itself against the rise of Uber Technologies, a media report said.

General Motors has followed up its US$500million spend on Lyft with another move to fortify itself against the rise of Uber Technologies, a media report said.

The automaker has acquired the technology and most of the assets of the San Francisco-based ride-hailing pioneer Sidecar Technologies. GM is also bringing on board around 20 employees from the Sidecar team, including co-founder and chief technology officer Jahan Khanna, Bloomberg reported. Co-founder and chief executive officer Sunil Paul is not joining GM.  

The price of the transaction was not disclosed, although a source told Bloomberg it was less than the roughly $39m Sidecar raised in its failing effort to compete with much better-financed rivals like Uber and Lyft. David Roman, a GM spokesman, told Bloomberg the assets and employees would support the Lyft alliance and other efforts at the automaker.

The report said the deal was another sign automakers are waking up to the threat Uber poses to the traditional auto industry.

Sidecar helped introduce the concept of peer-to-peer car-sharing when it launched in 2012 and essentially allowed anyone who passed a background check to offer rides to smartphone-toting passengers. At the time, Uber was brokering rides only between users of its mobile app and licensed limousine drivers. Lyft entered the scene soon after and the following year, Uber launched its own ride-sharing service, UberX.

Bloomberg said Sidecar's inability to compete in the arena it helped create demonstrates the market power and tenaciousness of Uber, which subsequently raised more than $10bn in financing and has offered generous monetary incentives for any driver that switched from a competing ride-sharing platform. It was most recently valued at $62.5bn, making it the world's most valuable startup.

In early 2015, Sidecar shifted its focus to handling deliveries for other businesses, including Yelp's food-delivery service Eat24. But by 29 December, Sidecar was finished: Paul wrote in a blog post on Medium that the company would shut down.

"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. "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."

GM is preparing to introduce its own set of transportation services, which it has dubbed Maven, Bloomberg's source said. The initiative may allow owners of GM vehicles to give rides to other passengers who are commuting in the same direction. GM president Daniel Ammann would take charge charge of Maven, this person said.

Bloomberg said GM filed to trademark the Maven name on 25 November, 2015. The application, filed with the United States Patent and Trademark Office, described "Application software for connecting vehicle drivers and passengers and for coordinating transportation services; software for use in planning, monitoring and controlling urban transportation."

The source added that, as part of the transaction, GM will also get a licence to a patent that was granted to Sidecar CEO Paul in 2002: "System and method for determining an efficient transportation route".

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, the source said.

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