A fearful GM doubles down on purchases to thwart Über’s threat to the auto industry. GM follows its $500 million bet on Lyft Inc. with another flashy, though far less costly purchase. The automaker has acquired the technology and most of the assets of the San Francisco-based ride-hailing pioneer Sidecar Technologies Inc. GM will also hire around 20 employees from the Sidecar team, including co-founder and Chief Technology Officer Jahan Khanna. Although the price of the deal was not disclosed, reports are it is less than the $39 million the startup raised in venture capital.
“In connection with Sidecar ceasing operations, we can confirm that we have attracted Sidecar employees to be integrated into the GM urban mobility team and acquired certain related assets, for work on our global mobility programs,” a GM spokeswoman said.
Auto Makers Fear Über Threat
The Sidecar acquisition is another sign that automakers are waking up to the threat Über poses to the traditional auto industry. Carmakers are secretly terrified about what Über will do to their business. All of them will have to work hard to topple Über, which is regarded as the most valuable, and wealthy, startup in the world.
Sidecar helped introduce the concept of peer-to-peer car sharing when it launched in 2012. Sidecar’s inability to compete in the arena it helped create demonstrates the market power and tenaciousness of Über to raise money; Über is valued at $62.5 billion today.
GM Acquires Hidden Gem To Thwart Über Thtreat
GM will also get a license to a patent that was granted to Sidecar. Sidecar executives believed the patent covered the essential intellectual property behind ride sharing, though Über and Lyft never responded to Sidecar’s repeated attempts to enforce the patent. The better-capitalized GM may be able to pursue the patent violation against claims further.
In November 2015, GM filed to trademark the name Maven that some interpreted as GM preparing to introduce its own set of transportation services. The initiative purportedly would allow owners of GM vehicles to give rides to other passengers who are commuting in the same direction. GM President Ammann was rumored take charge of Maven. The reports seem less credible after GM invested $500 million in Lyft because Maven would compete with GM investment and business partnership with Lyft.
How GM May Use Its Acquired Patent Against Über Threat
More credible speculation may be that GM may become a patent troll against Über. GM is valued at only $55-ish billion (only $4 billion more than Über) and lags behind Über even after its investment in Lyft. GM’s acquisition of Sidecar’s patent would allow the automaker to challenge Über in court to defend its business practices, thereby slowing down its rival’s progress.