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Newly Released Blockchain App Brings Rideshare Back To Austin

The Arcade City app, featured in numerous headlines in 2016 as an alternative to Uber and Lyft, has been released. Residents of Austin, Texas, where other ridesharing services have been banned, have another option in Arcade City  to get around.

In order for drivers to use the Arcade City app in Austin and other cities, one million Karma points must be accrued by doing things like donating food to the needy. To keep track, this is done through, an app aimed at ending hunger. Austin was the first city to accomplish this, reaching its karma point threshold September 17.

Participants there, who refer to themselves as “the people of Arcade City, Austin” and “Members and Citizens” of Arcade City, started drafting a constitution. All groups must create their own constitution which describes how the group operates.

The group finished earlier in the week with their Constitution, but went back to work on it after Arcade City founder and CEO Christopher David – who is referred to as Mayor of Arcade City –  rejected it. He cited that it asked him to appoint leaders, which he won’t do. Later in the week, the group, located mainly in the Arcade City Austin Facebook group, finalized their constitution.

Arcade City allows drivers to set their own rates, contract directly with riders, and build their own recurring customer base over which Arcade City has no oversight by simply not really providing any of the infrastructure to handle it, as the recently released app demonstrates.

Arcade City is not much more than a virtual gathering place or the Craig’s List of ridesharing combining bitcoin with Facebook’s pre-existing infrastructures. It’s trying a radical new model so that it does not fit within the purview of regulations which brought down Uber and Lyft in Austin. Yet, the city has taken notice.

I reported in Motherboard in June that the Austin Transportation Department sent six officers to Capital Factory, a tech-focused co-working space where Arcade City addresses its headquarters, in order to serve David a ticket. A few days after, ATD sent David what he called a “nice email” requesting a sit down meeting to discuss the transportation ordinance.

David spoke with officials for approximately an hour and explained why he believed Arcade City is not a transportation network company, the business model used by Uber and Lyft to connect paying passengers with drivers who provide their own transportation.

“They didn’t fully agree with my reasoning,” he told Motherboard. So, it’s not clear if ATD will let the model persist. In June, Austin police impounded a female Arcade City driver’s vehicle for violating local transportation regulations. In a test of a central tenet of Arcade City’s model—community—other Arcade City drivers reportedly band together and crowdsourced the funds to get her back on the road.

“Arcade City the corporation has laid out an ambitious vision of total decentralization over time, a vision that will take resources and solid corporate strategy to attain,” David said. “We have a corporate interest in ensuring that people representing our brand in new cities aren’t making stupid mistakes that give customers a poor impression of Arcade City, mistakes that could have been avoided if they’d been connected with experienced drivers in our network.”

David believes ridesharing apps like Uber and Lyft “bastardized” the sharing economy. “They manage their drivers centrally, tightly control rider/driver interactions, and don’t allow service providers the leeway to set their own pricing or terms of service,” he said. “Their model is transitional: it fills the gap between the legacy transportation services of the past and the decentralized, stakeholder-owned marketplaces of the future.” But, David said, the modern ridesharing model will soon be obsolete.

“The value of that peer-to-peer, community-centric network will be orders of magnitude higher,” David said.

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