Sidecar raises $10M and launches user marketplace

Ride-sharing app Sidecar launched a new marketplace model on Wednesday that allows users to connect with drivers in new ways, including naming a price and “favoriting” drivers. The company also announced a $10 million Series B funding round from Union Square Ventures (which is publicly announcing its involvement for the first time), Correlation Ventures, Avalon Ventures and SoftBank Capital.
The round brings the total amount of funding Sidecar has raised to $20 million. The company said via email that the new money will go toward growing staff and product. Currently, users can access Sidecar via iPhone (s aapl) and Android (s goog) across twelve cities, including New York and San Francisco.
Through the new marketplace model, users can shop for rides from drivers who set their own prices. They can also search for drivers based on price and amenities, and prioritize drivers with a “favoriting” model that will alert certain drivers of the request. It also provides incentives for drivers to offer better experiences with their cars to attract better and more frequent business. The company said that it has tested the program for two weeks in both Los Angeles and Chicago, and the success has been strong enough to warrant a full-scale rollout to the cities where Sidecar is currently available.
In a separate blog post, Union Square Ventures’ Fred Wilson compared Sidecar and Uber’s positioning to the competition between Amazon and Etsy:

“Amazon is efficient and Etsy is personal. There is room for both of them to build big businesses in e-commerce. Uber is efficient and Sidecar is personal. And we believe that there is room for both of them to build big businesses in mobile transportation.”

My colleague Om Malik discussed the ways that ride-share apps can differentiate enough to stand apart from the current leader, Uber, and its lower-cost UberX service. Sidecar’s gambit to open up a true marketplace for its services fits the bill. The direct-to-seller model veers away from the corporate, often luxury-focused feel of Uber, but offers users a way to see and connect with the human who will be taking them to their next destination.
This article is corrected to reflect the accurate number Sidecar has raised to date. The company raised $10 million in Series A, not $4 million as previously written.