Sidecar failure

Sidecar

Provided B2B delivery transportation network

Description

Sidecar was a transportation company based in united states (US). It was founded a couple of years after Uber but was never able to catch up with it despite the fact that it had a good product built on solid technology. One of the features Sidecar introduced was that of enabling riders to set their own price. In general, the app of the company offered much more control over their riding experience both for drivers and riders.

Stats

Category
Transportation
Country
United States
Started
In 2011
Closed
By 2015
Number of Founders
Two
Name of Founders
Jahan Khanna, Sunil Paul
Number of Employees
Between 51 And 100
Number of Funding Rounds
5
Total Funding Amount
$45.5M
Number of Investors
21
Precise Cause of Failure
Competition
Business Outcome
Acquired

Cause of Failure

Sidecar had the top-notch technology but no marketing strategy. Car-hailing services depend on the traction present in the market and the network of drivers and passengers that they build. Sidecar could only become useful - and profitable - if there was always a high density of drivers and users. This is mainly where Sidecar failed. Unlike their giant competitors (Uber and Lyft) they didn't invest enough to market their product and gain customers. Uber reportedly lost almost a million in its first 6 months while it heavily focused on acquiring customers. Sidecar didn't have the backup funding to do that on a similar scale.

Also, instead of focusing on its powerful technology and the empowerment their app gave to its users, they tried to place themselves as an affordable alternative to Uber, which didn't really work for them. Weeks after shutting down on December 2015, though, they were acquired by GM.

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