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Want to turn your car into a taxi? New York City says that's a crime

Want to turn your car into a taxi? New York City says that's a crime


The city cracks down on ridesharing app Sidecar with a sting operation that resulted in a citation for one citizen driver

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Ridesharing apps like SideCar and Lyft match drivers who have an extra spot in the car with passengers who need a lift. It's like hitchhiking, except that the passenger has the option of tipping via the app. The service is growing in popularity, but local regulators are cracking down as it becomes available in more cities, calling ridesharing unsafe.

Over the weekend, the New York City Taxi and Limousine Commission (TLC) stopped two SideCar drivers in a sting operation. The agency used the app to order two rides, then detained the drivers. One woman was allowed to go home, while the other woman was issued a citation and her car impounded. In response, SideCar has called upon the public to phone the city and tweet about the issue, citing a survey that says 83 percent of New Yorkers are in favor of ridesharing.

"What happens in New York City has implications for the entire sharing economy."

"What happens in New York City has implications for the entire sharing economy," CEO Sunil Paul said in a blog post.

It's a tumultuous time in the taxi industry. First, apps like Uber and Hailo shook things up by inventing a way for riders to hail cabs from their smartphones. These so-called "e-hail" apps faced resistance from taxi companies and local regulators, running a gauntlet of injunctions, fines, and lawsuits in New York City, Washington, DC, San Francisco, and other cities. However, these e-hail apps are gradually winning government approval despite all the entrenched interests stacked against them. The latest victory came in New York, where the TLC launched a pilot program to introduce e-hail apps to the city.

But while e-hail apps have been winning approval, ridesharing apps are still struggling for acceptance. SideCar was issued a cease and desist order in Austin and retaliated with a lawsuit, which is still ongoing. SideCar drivers were also busted in Philadelphia. SideCar, Lyft, and competitor Tickengo were fined in California.

Ridesharing apps are still struggling for acceptance

SideCar seems to be pursuing the same strategy that has worked for e-hail apps, especially Uber: that is, running full steam ahead and continuing to operate in spite of what regulators say. SideCar requires drivers to have a valid driver's license, insurance, and a working car. The startup also runs background checks, conducts interviews, and uses GPS to track trips. Passengers rate drivers after each ride, and SideCar says it will investigate any drivers with low scores.

SideCar operates in San Francisco, Seattle, Los Angeles, Austin, Philadelphia, Chicago, Boston, Brooklyn, and Washington, DC. The service has been at least tacitly approved by regulators in five of those jurisdictions including its native San Francisco, Paul said during a panel at the TechCrunch Disrupt conference today.

"What we oppose is a service that lets people provide taxi service."

"Categorically, we don't oppose rideshare," the TLC's deputy commissioner of policy and planning Ashwini Chhabra said at TechCrunch Disrupt today. "What we oppose is a service that lets people provide taxi service. You need to build in safeguards to make sure that this isn't someone who is going to be doing six, 10, 12 rides a day, because that's what a car service does."

Of course, many ridesharing apps are tempting people to do just that. The Verge took two Sidecar rides in Austin during the South By Southwest Interactive tradeshow. Both drivers were running rides back-to-back in an attempt to make a little extra cash on the side. The danger with this, regulators say, is that it allows drivers to avoid the regulations that are there to protect consumers from discrimination, price gouging, and other unsavory practices.

SideCar says it should not be regulated by the TLC because it is not a "for-hire" service, but rather a volunteer service where passengers can give drivers a donation. The TLC disagrees with this parsing. "It fits all the criteria for a for-hire vehicle ... We most definitely do have reason to invoke and enforce the applicable laws and rules," the TLC's deputy commissioner for public affairs, Allan Fromberg, said in an email.

"Sharing is not a crime," Paul said at TechCrunch Disrupt. "We're willing to work with regulators."