Can everything be considered a data company now?

By Richard Nieva , written on May 28, 2013

From The News Desk

Last Friday, the California Public Utilities Commission (CPUC) deemed the ride-sharing service SideCar legal to operate in California. It was an anticlimactic reveal, because the company had been operating despite a cease and desist letter from the state.

The reason the clearance took so long, CEO Sunil Paul told AllThingsD, is because the company was in negotiations with the CPUC over two particular points: The commission cannot obtain driver and rider information without a subpoena, and SideCar will be considered an information service, and not a transportation service. (Competitors Lyft and Uber got clearance in January, and Paul said he doesn't know the terms of their agreements.)

The latter distinction is the more interesting of the two. Paul says the main differentiator between SideCar and competitors is that SideCar requires a user to input an end destination when booking a ride, which makes it more of a “ride-matching” service than a dispatch service.

About a month ago, I asked Paul about SideCar’s competition with Lyft, given their similar services. He indicated back then as well that the business was not merely about dispatching cars. “It’s a fundamental shift in transportation. This is not about taxis and limos,” he said. “So there is plenty of room.”

It’s a fair argument to make, and may be applicable in this case. But with data at the helm of almost every new mobile-centric service, can every company, moving forward, insist it’s a data company?

Paul says SideCar is in the business of ride-matching, because, according to the company’s website, drivers pick up riders on the way to where they are going, but that doesn’t seem to give the service enough credit for how robust it is. It makes it sound like the smartphone version of hitchhiking, and that’s not realistically the case. At times, I've used the service and drivers have told me they were sitting at home and decided they wanted to go out and make some money. And I’ve had drivers who said they weren’t familiar with the places I was headed. If drivers were on their ways to those places anyway, isn’t it reasonable to assume they would know how to get to the general area?

I bring up none of this to deride the drivers or the company. (I don’t mind saying I’ve had very good experiences every time I’ve used it.) Rather I bring it up to say that there is a difference here between Sidecar’s service and those casual carpool programs where a commuter in San Francisco will pick up another commuter on foot before heading out of the city. Those are truly cases of “I was going there anyway.” The company even positions itself as different from those programs on its website because SideCar is much safer.

For its part, SideCar is walking the walk by refusing to turn over driver and rider information unless hit with a subpoena. That reinforces the idea that the company is merely an information conduit, and not as involved in the rides themselves. But nonetheless, the distinction between information company, or dispatch company, or rental company, or entertainment company, or anything else, is an important one. Not necessarily for regulation systems – which some entrepreneurs will argue are broken – but for users.

If a user is getting into a car with a stranger, I think he'd want to know what particular things the company sees as its responsibilities. Those things are not semantics.

[Image courtesy: mikecogh]