The massive amounts of money being poured into US ride-hailing apps Uber and Lyft showed signs of forcing a local shake-out on Tuesday, as Sidecar, one of the market’s pioneers, revealed it would shut down its service on New Year’s Eve.
The San Francisco-based company blamed what it called “a significant capital disadvantage” as it admitted it could not keep up with bigger competitors.
Sidecar raised $35m in its near-four year history, with prominent backers including Richard Branson, Mark Pincus, founder of online games company Zynga, and Fred Wilson, a New York venture capital investor.
The amount pales by comparison with the roughly $10bn raised so far by Uber, as well as Lyft’s $1.3bn. In the latest escalation in their rivalry, Uber and Lyft have both doubled the amounts they are seeking in new fundraising rounds, to $2bn and $1bn respectively.