Ridesharing company fires back at city

AUSTIN (KXAN) - Last month, the City of Austin issued a cease and desist, now the ridesharing company, SideCar, is fighting back with a lawsuit against the City. 

According to SideCar's CEO Sunil Paul, the company is turning to the court to decide whether or not what the company is doing is in violation of Austin's Transportation Code.

SideCar believes rideshares are legal and that the Austin Transportation Department misinterpreted its City Code.

SideCar is citing the following reasons for why their business is legal:

• SideCar is not a transportation service. SideCar is a technology platform that enables peer-to-peer ridesharing.
• The City Code regulates "chauffeured vehicles". We don't own or operate vehicles, dispatch drivers or mandate shifts.
• The City Code regulates "chauffeured vehicles" for a fee. Members of the SideCar rideshare community pay what they want and it's voluntary.

According to the City, SideCar closely resembles a taxi franchise and that any operation dispatching drivers to potential passengers on-demand requires a City Council-approved Franchise Agreement, and that all drivers are required to undergo criminal background and driving checks.

SideCar claims they aren't similar to taxis because SideCar drivers are regular people willing to give rides to people who need them. People pay what they want and drivers choose when they drive, how often they drive and where they go.

The city isn't backing down from the legal battle either.

"While we have not yet been served with the lawsuit, we are aware of the allegations made by SideCar and are fully-prepared to defend the suit," said a City of Austin spokesperson.

On Feb. 28, the City Council approved an ordinance that allows the Austin Police Department to impound vehicles that are classified as unpermitted vehicles for hire -- which the City claims SideCar is. The ordinance went into effect immediately because the City was worried that operators would be operating during South by Southwest.

The City originally filed a cease and desist order to Heyride in November; Heyride was eventually bought out by SideCar a few months later.