Sidecar Patent sends Warning Signals to Uber

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In our series of blogs related to taxi services, we discussed passenger safety and we deliberated how cab drivers can be at risk. But in this melee, how do some reputed cab services companies stand to suffer serious damages, albeit economic? How can they dodge such lethal bullets?

Uber is the dominant and most bullish player in the taxi industry. However, a relatively small competitor Sidecar might put brakes on Uber’s runaway success through its patent US 6356838. This patent has 95 forward citations, having been referred by giants such as Microsoft, Cisco, IBM, Research in Motion and Mitsubishi. It describes the use of GPS-tracking to help route a driver to a requesting passenger. This seems like the rudimentary principle behind the business model of almost every major cab service company like Uber, Lyft, Ridecharge and Ridecell. Sidecar may mobilize its patent and seek royalty and licensing that could bring more than a few creases on the forehead of rival companies. On the contrary, if Uber’s 11 applications lying with the Patent Office earns grants, then it could catapult to a position where it can pose quite some threat to competitors with multi-million awards in jury verdicts and even injunctions.

Sidecar was granted the patent in 2002. Since then a number of patent applications related to car services have been filed with the USPTO. In fact, there has been much patenting activity in the taxi industry over the last decade with majority of these applications filed by Uber alone. Uber has filed for patents for both passengers’ and drivers’ aspects of car scheduling. Sidecar has filed patent applications related to selecting a driver based on location (US 20110313880) and reducing trip costs (US 20100228415). Ridecharge in its application US 20090030885 seeks to patent a back-end network and system for on-demand and scheduled ride services.

Patenting activity in this domain is expected to increase as revenues grow and the number of market players increase. As of now, Sidecar and Uber are poised well on the IP front. Sidecar’s patent might take some momentum off the roller coaster that companies like Uber and Lyft are riding. But once these pending patent applications get the green signal, the world is likely to witness a whirlwind of patent battles.

A number of permutations and combinations are expected to ensue. Sidecar may want licensing fees or look to leverage acquisition. Uber and Lyft can consider buying some patents to launch a countersuit or agree to sign a deal to escape legal expenses. All said and done, the future is poised to certainly witness an active IP build up and monetization in taxi scheduling services.

Ambuj Srivastava
Ambuj Srivastava

Armed with a pen and paper, Ambuj can spend hours writing about anything and everything. A compulsive patent decoder, he can shred technology to its smallest bit as easily as he can translate his findings into a blog.

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