Peer-to-peer ride sharing is one of the hottest — and most controversial — markets in the current tech startup world. And one leading player in the space, SideCar, is looking to hit the gas pedal on its growth amidst all the hubbub.

The San Francisco-based SideCar announced today it has hired two key tech executives to join the company and focus on product development and revenue generation: Gregory Boutte, most recently VP of eBay’s electronics and motors divisions, is joining SideCar as Chief Revenue Officer, and Robert Wong, most recently VP of product at Hulu, will serve as SideCar’s EVP of product.

In a post on SideCar’s company blog, CEO Sunil Paul said the two new execs “will help us build our brand visibility and prepare for global expansion.” In a separate press statement, Paul had a couple more comments about what each new hire brings to the table:

“Gregory has a reputation for leadership and execution. His depth of experience in two-sided marketplaces and international operations will be key to Sidecar’s global acceleration. Robert is known in the industry as a product executive with the strategic and tactical expertise to take a breakthrough idea mainstream. Both these hires will play an essential role as we grow our business and rideshare community.”

The company launched its service nearly one year ago in June 2012. At the moment, SideCar has active operations in eight markets — San Francisco, Seattle, Los Angeles, Austin, Philadelphia, Chicago, Boston, Brooklyn, and Washington, D.C. — and, like other transportation apps, has battled its fair share of regulators along the way.

There are certainly a lot of question marks about how ride-sharing will evolve in the months and years ahead, as local governments work out their responses to the new transportation landscape. But the fact that companies like SideCar continue to attract talent from other established areas of the tech industry is a big vote of confidence that it’s a market that is here to stay.

Article courtesy of TechCrunch

TechStars, the popular startup accelerator with locations in Boston, Boulder, New York, Seattle, London, and more, has today announced an expansion to Austin, Texas – a city TechStars founder and CEO David Cohen refers to as the “natural next stop for us” in this morning’s announcement about the new location.

The program will launch its first program this August, and is accepting applications now.

TechStars Austin will operate out of Capital Factory in downtown Austin, and will be managed by Jason Seats, who sold his company Slicehost to Rackspace in 2008, making him VP of Engineering there. Seats has worked with the TechStars organization since 2011, serving as Managing Director of TechStars Cloud. He’ll now be relocating from San Antonio to Austin with his new position.

Cohen also notes that Austin has been named the “number one boomtown” and best place for your startup by folks like Forbes and Bloomberg, and recently became the second city chosen to receive Google Fiber. It’s also already home to a number of growing startups, as you probably know.

Austin’s Chamber of Commerce named 28 companies to its “A-List” showcase, its annual list which now includes startups like Spredfast, MassRelevance, Sparefoot, and MapMyFitness (to cite those Cohen pointed out), as well as others like myEDU, Uship, InfoChimps, Socialware, Emmoco, and many, many more. There’s also Indeed, HomeAway, Bazaarvoice, Spiceworks, and the 150+ others can pull up here in CrunchBase.

As with TechStars’ other locations, TechStars Austin won’t focus on any particular vertical, but is generally just looking for disruptive Internet companies backed by strong teams.

Mentors and investors involved in the new program include: Brett Hurt (Bazaarvoice), Tom Ball and Mike Dodd (Austin Ventures), Sam Decker (Mass Relevance), Jeff Dachis (Dachis Group), Kip McClanahan and Morgan Flager (Silverton), Josh Baer and Bill Boebel (Capital Factory), Ned Hill and Aziz Gilani (Mercury Fund), Rony Kahan (Indeed), Rob Taylor (Black Locus) Lori Knowlton (HomeAway), and more.

Austin’s scene is so hot right now that TechCrunch is even taking a roadtrip to that city this month (May 30th), kicking off the TechCrunch Meetup + Pitch-Off series, our 60-second pitch competition. First prize winners receive a table in Startup Alley at TechCrunch Disrupt SF 2013,  while second and third place winners will receive tickets. (Those event details are here.)

Article courtesy of TechCrunch

Woot, the daily deals site that Amazon bought in 2010 for $110 million, built a reputation for its “pile ‘em high, sell ‘em cheap” business model for shifting goods. Now, the company is facing up to a shift of a different kind: that of its own talent. In the last week, TechCrunch has learned that five six key employees are parting ways with the company.

They include Darold Rydl, who had been president of the company and one of its very first employees; CTO Luke Duff, who has been the technical lead for all things Woot since 2005; CFO Rene Gonzalez; Dave Rutledge, who had been the creative lead on all of Woot’s editorial content as president of Woot Workshop; and Jay Johnson, leading both the deals and affiliate marketing divisions at the company as director of deals.woot. Rydl and Gonzalez have already left, and the other three have given notice but will be with the company for another week. Update: after publishing, we found out about another departure: lead developer Shawn Miller is also leaving, with his last day May 17.

This comes 11 months after founder and CEO Matt Rutledge (brother of Dave) also left the company.

No, these six are not banding together for a new startup. Rydl distributed a note to staff and then later posted it on Facebook (we copy it below) describing a desire for a change of scene, and we understand that each is doing his own thing.

(We have reached out to Amazon for a response to this story.)

But we have also been hearing another story about what’s going on at Woot that may have spurred some of these departures, simmering issues with Amazon management that have finally started to boil over. “I don’t think any of us ever envisioned leaving Woot,” one person told me. “I thought I would stay there and grow with the company as the industry changed. But there were a lot of frustrations.”

These, we understand, are connected to a gradual set of changes at the company over the years as it has bedded down at Amazon. “Amazon wanted to come in and do things in a different way, not considering the importance of the other stuff,” I was told.

It seems like one of the thorny points is Woot’s CEO, Garth Mader, who had been put in place by Amazon to work under Matt Rutledge, and was promoted after Rutledge left.

In short order, changes pushed through by Mader have spread to various aspects of Woot’s business.

Turning straw into gold

The site, founded in 2004 by Matt Rutledge when it was first incubated inside Rutledge’s preexisting company Synapse Micro, was one of the pioneers of the “daily deal” model of selling goods online. It did so in an irreverent way aimed at disrupting the relationship between buyer and seller by making it far less formal. The original concept was to sell one “crap” item at a time that was at the end of its line (consumer electronics was a mainstay) at a competition-busting price, and then to launch another product at midnight each day.

Breaking up the pattern of single items for sale until they sold out, once a month Woot also sold a “Bag of Crap,” a group of items for a single price. Frank and funny commentary ran through all of this, along with an attempt to remain transparent with consumers through forums and details about how much of an item was sold.

All this brought a cadre of loyal users to the site — some 5 million per month at its peak, according to Rydl’s letter — rushing to buy things that, in a sense, no one else wanted to buy. Turning straw into gold, as Rydl describes it in his letter below.

Today, things have changed. Woot no longer shares data on how much of a product has sold. If you think about it, that kind of transparency also runs counter to how Amazon is about its own sales numbers for specific products.

Meanwhile, the Bag of Crap stopped getting sold monthly, because it was deemed to be too much of a strain on the system, and the server crashed every time it was sold. “That wasn’t an acceptable customer experience,” the source says Woot was told. “But there were a million people trying to get 1,500 items, of course they would crash.” It didn’t make sense to scale up the hardware to support something we did once per month, he said. The workaround was that the company ended up creating a scavenger hunt to find a (less frequently offered) Bag of Crap, but given that users had to “like” Woot on Facebook to get the first clue, “the perception for many was that it simply went away.”

Another change was more backend but crucial to Woot’s business model. The company made a “big push” to ship products using Amazon’s fulfillment system but this proved inefficient and far less profitable for the kinds of products that Woot sold. The Woot method involved a big palette with the item able to be taken and thrown into a shipping box; the Amazon method was less simple, if perhaps more professional.

“The end result was that our variable costs quadrupled. We used to be able to sell 50,000-100,000 items per day at a lower price point, but now we can’t profitably sell items under $10 because the variable cost for shipping got too high.” It’s unclear whether at some point Woot will revert to what it had been doing in the past.

However, there is more possible pain to come in this area, with wider ramifications. Along with the push to move product into fulfillment by Amazon, Woot scaled down its warehouse operations but has never communicated to the operations staff what the plan is for them. Our source says that “has left the remaining operations staff with an uncertain future and has had a dramatic effect on morale as others across the company wonder if their group will also be shuttered as more Amazon services are used. The fear is that soon, all Woot employees will be asked to move to Seattle [from its current HQ in Carrollton, TX, north of Dallas] or they will be replaced by Amazon services.”

The bigger picture for daily deals

To be fair, there have been other pressures on Woot’s business that have less connection to Amazon’s ownership. Daily deals, as we have seen with Groupon and Living Social, have become less fashionable, partly because of an oversupply of companies working in this space.

“The fact that so many retailers started doing these kinds of promotions and started pushing so many emails I think led to fatigue,” our source says. Woot resisted emails, until two years ago, but “even then a small percentage came from there. Most still came from direct traffic, from people hitting the site every day to be engaged with the content.”

That direct traffic on the site, nevertheless, is down nearly 30 percent year on year, and is continuing to decline.

But ironically, because Woot is selling significantly more items now than it did in the past, this hasn’t impacted business. In fact, Woot’s revenues have been growing at a 20 percent rate over the last two years, and 2013 appears to be shaping up in the same range. Specifically, through Woot Plus, its flash-sales section, the site now offers more than 400 SKUs every day instead of six a year ago.

(Amazon does not break out how individual businesses are performing in its earnings statements.)

The Zappos fairy tale

The story of how Woot was acquired and subsumed into Amazon can be a cautionary tale for other startups. Our source says that Woot had envisioned it would follow in the path of Zappos, the shoe and fashion e-commerce site that was acquired the year before Woot for $1.2 billion. Into that sale was built the idea that Amazon would stay hands-off. At the time of the acquisition, Zappos CEO Tony Hseih noted in a letter to employees:

“We plan to continue to run Zappos the way we have always run Zappos — continuing to do what we believe is best for our brand, our culture, and our business. From a practical point of view, it will be as if we are switching out our current shareholders and board of directors for a new one, even though the technical legal structure may be different.”

Indeed, while some of Amazon’s acquisitions still do get to do things their own way, more or less, there are others that have been held to more integration.

This is, of course, to be expected: Amazon’s wafer-thin-margin business model is predicated on economies of scale, so it doesn’t make much sense to run different organizations within it in ways contrary to that.

“Maybe because we were only a $110 million transaction, we didn’t have as much leeway in how things worked out for us,” our source said. But that brings a mixed fate: “The core reason we’re all leaving Woot is because we’ve lost the ability to do what’s best for our brand and culture. The business will no doubt continue to grow because Woot can leverage Amazon systems, but Woot will look more and more like Amazon until it is unrecognizable.”

Rydl’s letter:

“In the summer of 2003, a little group of three started kicking around ideas, hoping to let a little wholesale company [to] move a ton of crap. None of us believed the guy in a DeLorean who stood out front yelling “THIS IS WHERE IT ALL BEGINS, YOU GUYS!!!” In retrospect, we probably shouldn’t have called the cops on him. Our bad, guy.

But anyway, that little project soon garnered international acclaim and earned the love and adoration of millions of fanatical customers, all of them begging us for the crap no one else wanted. Every day, I felt fortunate to be around the sort of people who could turn straw into gold.

But today, after lots of soul searching, I’ve decided to take up new challenges. Tomorrow I leave Woot to embark in a new direction. No destination is clear, no course is plotted, but I remember the excitement of starting something from scratch, and I can’t ignore the urge to go create something new.

With my parting words, I want to make it clear: each of you should be proud of your contribution to Woot.com. With the simplest business idea ever (and no advertising dollars to spend) we attracted over 5 million customers, managed well over a billion dollars in sales, and spawned an entirely new industry.. from SCRATCH. We grew from a team of 15 to over 200 people in multiple states, and we even earned the attention of the biggest internet company in the world, a company that decided that it would be safer to flat out buy us instead of trying to compete. Few people in this world have accomplished what we did – always remember to reflect on these wins and celebrate them. In the world of retail, you guys are the freakin’ Justice League.

Please know that I am so incredibly proud of each of you and what we’ve all accomplished together. And understand I didn’t arrive at this decision easily. Nevertheless, I know my decision is right. I leave you all in the capable hands of my hand-picked leadership team – I am 100% certain that they are ready to take the lead. Although you may miss me with your hearts, day-to-day you’ll never feel a thing. And please, keep any tears off the product in the interest of optimizing the customer experience.

More seriously, I still consider my time at Woot to be one of the best things I’ve done, and I’m proud to have worked with all of you over the years. My love for Woot runs deep and eternal. Keep doing great things. After all, you’ve done so many already…..what’s one more?

Woot on,

Darold

Article courtesy of TechCrunch

It’s hard to believe that it’s been less than a year since ride-sharing service Lyft first launched in beta to friends and family, offering a low-cost alternative to on-demand black car service Uber. Not only has it grown aggressively in its home market since then, but Lyft has since begun offering service in Los Angeles and Seattle. It’s tacking on another city this weekend with a launch in Chicago.

With the addition of Chicago, Lyft will now be in four markets nationwide. That’s fewer than competitors SideCar and Uber, but it’s been focused on improving its rollout with each new city. With the recent addition of Cherry co-founder Travis VanderZanden as COO and its expansion playbook set, Lyft president John Zimmer promises me that the company will be aggressively adding new cities over the next year.

In the early stages of its expansion the company has seen positive signs of growth from each new city it’s launched in. Lyft’s launch in Los Angeles outpaced its first 12 weeks in San Francisco, with three times the number of users after its first 12 weeks. And the first month of service in Seattle has outpaced both its first two markets.

In Chicago, it’s hoping for the same type of demand trajectory, and believes it already has the driver supply to match. The launch team in Chicago has seen more drivers apply during its initial outreach period than in either Seattle or L.A., Zimmer tells me.

Exporting Company Culture

The company decided to expand to Chicago next due to the population density and transportation habits of residents there. Surprisingly enough, it didn’t really look at data around the number of people who have tried using downloading the app or using the service locally there.

Just as in L.A. and Seattle, Lyft sent a launch team ahead to Chicago to recruit drivers and vet them for service. For Lyft, that means driver and criminal background checks, as well as a car inspection and training to ensure that drivers fit with the community that it’s trying to build.

Along with the easily recognizable pink mustaches that grace Lyft vehicles, the company’s culture could be its biggest differentiator, but it’s also the most difficult piece of the business to re-create as it expands from market to market.

As for those mustaches — the company almost ran out, as it’s been adding drivers more quickly than its supplier could keep up, Zimmer tells me. Mostly, that was due to growth in San Francisco, where the company has recently doubled its driver count over the last two months.

Notably, the increase in supply has happened while Lyft has faced increased competition in its home market from Uber, which recently launched ride-sharing services of its own. In an effort to compete, Uber has been trying to poach Lyft drivers with some aggressive marketing tactics — including a “Shave the ‘Stache” mobile billboard that’s been driving around San Francisco over the past week.

Focus Now On Ride Sharing

Along with the launch in Chicago, the startup is announcing that it’s officially putting to rest the Zimride brand and will be known just as Lyft going forward. The company continues to support the legacy Zimride business, but the company’s main focus is on ride sharing — and has been for a while. So it’s not a huge surprise that it’s decided to reincorporate as Lyft Inc.

The rebrand follows a long and winding road that the company has been on since its inception. It all started about six years ago, when a group of friends founded Zimride to make it easier for university students to carpool home during the holidays and on weekends. The carpool community eventually expanded beyond university students, but the founders saw a larger opportunity in helping passengers get around urban markets.

So early last year, the remaining founders decided to take the business in a different direction and focus more on ride-sharing in cities rather than the longer, road trip-style carpooling that Zimride was traditionally known for. Thus Lyft was born.

Now that it has seen success with that model in San Francisco and subsequent cities, Lyft is ready to make it available throughout the country. Expect a number of new cities to be turned up over the next several months, as the Lyft expansion team continues to grow.

Article courtesy of TechCrunch

After losing mobile product head and Facebook Home team member Charles Jolley to Battery Ventures, Facebook is facing another departure from a previous Home staffer. Draper Fisher Jurvetson announced today that Facebook’s head of product for Android, Bubba Murarka, has joined the firm as General Partner and Managing Director.

Murarka has been with Facebook since 2008, and has held positions as business development lead, and was most recently head of product for Facebook for Android where he started the Facebook Home project.

Murarka helped scale Facebook’s Android product team to more than 50 members and pivot the mobile development strategy toward native applications. During his tenure, Murarka oversaw business strategy for search, photos, places and helped negotiate a number of strategic deals with key Facebook partners including Microsoft, Netflix and Yahoo.

Prior to Facebook, Murarka spent seven years in technical and product roles at Microsoft. While there, he acted as group program manager for Bing’s Bay Area development team. He originally started his career at Microsoft in Seattle as part of the original threedegrees team, which developed an early messaging app.

At DFJ, Murarka will identify new investment opportunities in the early-stage consumer and mobile space. He will also advise current companies on strategic partnerships, growth, product vision, and strategy. For Murarka, the DFJ role makes sense as he has been an angel investor and advisor to more than 10 companies in the consumer mobile and online education sectors since 2008.

This has been a big week for Facebook engineering and product departures. AllThingsD reported yesterday that engineering director Josh Wiseman has departed the social network for an EIR role at Social+Capital.

Article courtesy of TechCrunch

After the amazing success of our New York Pitch-Off in February, we thought it would be fun to bring the energy and excitement of a mini-Disrupt to more cities across the country. We’re pleased to announced the 2013 Meetups + Pitch-Offs will begin in Austin on May 30 at Stage On Sixth in downtown Austin from 6pm to 10pm. You can buy tickets now!

Then, throughout the year, we’re holding meetups with pitch-offs in Seattle, San Diego, and Boston.

Each meetup is traditionally a crowded mishmash of networking, hustling and, well, drinking, so 21 and older only, please. This year, after the roaring success of our first pitch-off, each meetup will feature a rapid fire pitch-off and a few brief on-stage discussions for TechCrunch TV.

You can sign up for the Pitch-Off here and buy a $5 ticket that entitles you to booze and other goodness. Sponsors can buy tables here (and we definitely need your guys support to make this a rocking event.)

The pitch-off is a way to get your startup in front of TC judges as well as a few local judges from the area. Our goal is to pick three winners. Third place gets one ticket to Disrupt SF, second place gets two tickets, and the winner gets a spot in Startup Alley. Everyone who pitches will be considered for the Startup Battlefield as well.

Participants interested in competing in the pitch-off will have 60 seconds to explain why their startup is awesome. PowerPoint presentations are not allowed. These products must currently be in stealth or private beta, and they must be ready to launch at Disrupt in in September.

Our sponsors help make meetups happen. If you are interested in learning more about sponsorship opportunities, please contact our sponsorship team here sponsors@techcrunch.com.

Article courtesy of TechCrunch

Looks like Lockerz, the social commerce and photo sharing service, may be moving on to yet another chapter in its life.

After laying off 30% of its Seattle HQ staff, closing down its San Diego office, and shutting down its Plixi photo sharing API earlier this year, the company is now launching a new fashion site, Ador. A tipster tells us that Lockerz is shutting down altogether and relaunching, but as of right now, the Lockerz site looks like it is still operational. Ador, meanwhile, is in an invite-only phase. We have reached out to the company to confirm what is going on.

The launch of Ador, in any case, is one more sign of how Lockerz continues to search for new ways of bringing in more users and scale to its service. Lockerz was founded in 2009 and built an early reputation as a place to post photos to share on sites like Twitter — a service that may have proven popular, but perhaps difficult to monetize. That operation picked up extra challenges after other photo sharing services like Instagram emerged, and Twitter took photo sharing into its own hands. Indeed, Lockerz claimed that it was Twitter’s changing terms of service that led it to close down its Plixi API. A second source tells us that the Plixi API had driven “90% of the traffic to Lockerz.com and its mobile site.”

Lockerz has to date raised $43.5 million in funding. Investors include Kleiner Perkins Caufield & Byers, Liberty Media, DAG Ventures and Live Nation, with the most recent round, a $7.5 million venture round, coming in October 2012.

While we can’t confirm whether or not Lockerz is pivoting or rebranding, what we can see is that Lockerz has registered a trademark for “Ador,” along with “A Ador” and (bizarrely) “A”. “A ADOR is a product and service created by Lockerz, Inc.,” the Trademarkia entry reads. Ador is also currently hiring an iOS developer in Seattle.

An about page on Ador.com, meanwhile, describes a fashion-focused site where people can collect images that they like and share them with others, as well as use the site to purchase the items, and track when tagged items go on sale.

In other words, Ador’s services are very similar to those being offered on Lockerz, which has been transforming itself from a photo sharing service into a photo sharing service with a fashion/celebrity/e-commerce angle to it. “Discover the latest in fashion, beauty and entertainment,” the Lockerz site reads today. “Get rewarded for sharing what you love with our community of stylish shoppers.” In February 2012, Lockerz updated its look with a Pinterest-style grid layout and infinte scrolling.

When we covered the layoffs in January, we noted that key employees, such as head of mobile Daniel Marshalian, were still working at the company. According to Marshalian’s LinkedIn profile, he has now left. Mark Stabingas — who took over as CEO of Lockerz after founder Kathy Savitt the role left to become CMO of Yahoo — is still there. (Savitt remains chairperson.)

Article courtesy of TechCrunch

What are the challenges that the New York tech scene needs to address? This topic kicked off the conversation this morning between TechCrunch founder Michael Arrington and venture capitalist Bill Gurley at TechCrunch Disrupt NY 2013. Gurley’s VC firm, Benchmark, has invested in some of the most disruptive technology companies over the past 10 years, including Dropbox, Zillow, Uber, Twitter and Snapchat. He says that New York needs more iconic companies, and worries about the Wall Street influence on the New York tech community.

Gurley noted that what really put Seattle on the map were companies he described as “four pillars” of the Seattle market  - companies that people identify as being associated with Seattle: specifically, Microsoft, Starbucks, Amazon, and Costco. He says that all of these were originally venture-backed and have remained  throughout the years.

New York has the entrepreneurs and the engineers, says Gurley. Now the city needs its own “iconic” companies to put it on the map, as well. There’s no precedent for that here just yet, he adds. But when pressed on whether or not New York didn’t have “big” companies, Gurley admitted that VC’s think of DoubleClick as one of the big exits here, and more recently, he says, there was the exit of Connecticut-based job site Indeed.

“[Indeed] had a great business model, a huge consumer brand…and they sold it,” scoffed Gurley. “I think in general, in the venture business we have this problem – this kind of anti-IPO attitude – that I think prohibits companies from hitting the long ball, but it seems like maybe that’s even more acute here.”

Venture capitalists are dependent on huge home runs – big wins. He said the system dynamic in New York prevent companies from reaching that point. The mentality in New York is one that’s still associated with that found on Wall Street, Gurley said. That is, Wall Street is not loyal to companies, but is more focused on the dollars and bottom line. This can prevent companies from growing large, turning into the kind of iconic firms that could one day become pillars of the New York tech community, the way that Microsoft et al. have become synonymous with Seattle.

Earlier this morning, Andreessen Horowitz’s Chris Dixon spoke of other, but somewhat similar, concerns, when comparing the general climate for startups in New York to those in San Francisco. “There are plenty of great investors here and attracts lot of entrepreneurs,” he had. But he saw challenges in the “whole mid-level layer” when companies have a hit product and now need to scale.

“I hope it will all change,” Gurley concluded on this front, addressing the audience, but he honestly didn’t sound all that hopeful.

Article courtesy of TechCrunch

Want to book a private jet but are away from your keyboard? No worries! BlackJet‘s got you covered! The startup, which hopes to make non-commercial flights more efficient and less expensive for the high-powered jet set, launched an iPhone app for instantly booking private jets.

BlackJet, which was first announced last fall, publicly launched in February. At launch it connected five cities: San Francisco, New York, Los Angeles, South Florida and Las Vegas.

But it was only available on the web. Now it’s expanding the ways in which its busy, on-the-go clientele can book private jets to include its own native mobile app. The BlackJet app, which was released recently, provides an ultra-simple and fast way to buy seats on non-commercial aircraft, directly from their phones.

BlackJet is also growing the roster of supported cities — and trips between them — adding Chicago, Boston, Dallas, Seattle and Washington, D.C. That means the service will soon have 10 major markets total, and is connecting a lot of the big business corridors. While users perusing the site can see the new cities already, they’re really just placeholders until markets officially launch.

BlackJet’s investors include a whole lot of big-name angels and celebrities, such as founder Garrett Camp, Salesforce CEO Marc Benioff, First Round Capital, Shervin Pishevar, SV Angel, Ashton Kutcher, Guy Oseary, Michael Birch, Naval Ravikant, Rick Marini, Noah Goodhart, Thomas Ryan, Josh Spear, Jay Levy, Science Inc.’s Peter Pham and Mike Jones, Dan Rosensweig, Stephen Russell, Tim Ferriss, Matt Mullenweg, Ryan Sarver, Steve Jang, Shakil Khan, and David Ulevitch, among others. Another one of those investors is CrunchFund, which was started by TechCrunch founder Michael Arrington.

Article courtesy of TechCrunch

On-demand ride service Uber is more fully embracing ride sharing, making it clear in a policy paper this morning that it will offer up services from community drivers in markets in which competing services, like Lyft and SideCar, have gotten “tacit approval” from local regulators.

Until recently, Uber has operated with the help of third-party limo and taxi services to provide drivers who had already received whatever commercial insurance and licensing is needed to operate transportation services in the markets they operate in. But it’s seen competitors quickly crop up with competing applications that provide drivers who aren’t licensed in the same way.

That’s given these so-called ride sharing companies a big advantage, in that they’re not subject to a lot of the same fees and regulations that Uber’s partners are. As a result of using drivers without commercial licenses or fancy black cars, those competitors are able to offer lower-cost services in markets where they compete with Uber.

Today, Uber made it clear that it’s not going to idly stand by and let those companies steal share in markets where local governments and regulators have turned a blind eye to ride-sharing services. The company issued a Policy White Paper on ride-sharing, in which it detailed how it will decide to roll out ride-sharing in a market where Lyft or SideCar has already begun operating, and what safeguards it will provide to ensure a high quality of service.

Uber has said that it will consider offering ride-sharing services in markets in which it operates if a competitor has launched and is operating for 30 days without any direct enforcement against it. It’ll consider that “tacit approval.” But if a local government or agency has shown that it will enforce regulations — as they did against SideCar in Austin and Philadelphia — it won’t offer services there.

As for safeguards: Uber promises a $2 million insurance policy on all ride-sharing trips requested through its platform. And it will provide background checks on all drivers which it promises will be stricter than what is required for commercial transportation providers.

That makes it clear that Uber is serious about competing in the ride-sharing market. While it watched for a year while Lyft and SideCar opened operations in San Francisco, and then L.A. and Seattle — all of which are Uber markets — it won’t stand by any longer.

Presumably, that could give Uber an advantage in those markets, since new entrants will be competing in markets that Uber already operates in. While those ride-sharing services will need some time not just to get their operations off the ground, but also to educate customers about their apps, Uber in many cases will already have infrastructure and operations built out and ready to go, as well as built-in customers who already have the app installed. And, when it comes time to on-board new drivers, Uber should be able to do so pretty quickly.

In other words, 30 days isn’t a huge head start. Uber CEO Travis Kalanick wouldn’t say how long it would take to get ride-sharing up and running in any given city, mostly because it depends on the make-up and supply in the market. But it’s clear that with processes already in place in most metropolitan areas, it could be a matter of weeks for Uber to go from zero to having community drivers ready to go.

The announcement comes just a day after Uber announced it was launching in Seattle, another city where ride-sharing services have begun encroaching on its turf. SideCar has been in the Emerald City since last fall, but Lyft is launching there this week.

In a phone conversation, Kalanick said it was difficult to tell what effect Lyft or SideCar have had in markets where their services overlap, in part because Uber continues to see double-digit growth there. In San Francisco, for instance, Uber saw double-digit growth just within the past week. Part of that could be due to Uber’s own embrace of ride-sharing, however. Kalanick said he has seen substantial interest in the low-cost UberX service since it’s been rolled out.

The only question might be how this affects the third-party, commercially licensed partners that Uber has been working with over the last few years. After all, it’s one thing for them to compete with lower-cost services from other providers, but a whole other thing to have rides going to community drivers within the same app.

Kalanick said Uber has been talking to those partners about this issue, and telling them that Uber needs to offer ride-sharing as a choice if it hopes to compete. “I think it’s better for existing partners,” Kalanick told me. “If we don’t give the consumer choice, the consumer is going to go elsewhere.”

For Uber, making ride-sharing an option means that consumers will use UberX when they don’t want to pay a lot, but hopefully will also use the black car service on date night. According to Kalanick, that means consumers will use Uber “no matter what their transportation need is.”

Article courtesy of TechCrunch