A ridesharing startup named Arcade City has announced plans to set up shop in the Philippines and will launch its service on Monday, April 16. This is despite the cease and desist order issued by the Land Transportation Franchising and Regulatory Board (LTFRB) threatening legal action and other measures should the company proceed with its plans.
In its blog post, Arcade City said that it will launch a decentralized rideshare network across Southeast Asia on April 16th, expanding on its large driver network in Manila.
“Uber is withdrawing from the world stage at an increasing pace,” says Arcade City founder and CEO Christopher David. “Arcade City is happy to continue filling the void Uber leaves behind. Drivers and riders all over the world are excited for a true alternative.”
The LTFRB, however, is not happy with Arcade City’s plans. The agency issued a cease and desist order on Thursday, April 12, against the company, ordering it to discontinue with plans to launch its mobile app and to stop all bookings made on its platform.
LTFRB orders ARCADE CITY to CEASE & DESIST pic.twitter.com/7zEcy97nTO
— Official LTFRB (@LTFRB) April 12, 2018
Atty. Aileen Lizada, LTFRB board member, said that Arcade City drivers caught plying the roads will face a P120,000 fine, and his or her vehicle will be impounded for 3 months. She said that Arcade City has no papers or pending applications before the LTFRB, and those operating under it are considered colorum vehicles.
Arcade City founder and CEO Christopher David disagrees. He said that Arcade City is not a transport network company (TNC) and is not comparable with other ridesharing companies such as Uber and Grab.
“We are a platform to support local networks forming their own TNC/TNVS and all using one platform. In the meantime, drivers can sign up and create a profile that is visible to people nearby,” David said. “Riders can choose their driver. Drivers can set their own rates. Driver networks called ‘guilds’ set the policies for their local area. We won’t be hiring some corporate people to run an office in the Philippines, we invite the drivers themselves to run the networks.”
“It is a different model than Uber’s, and governments are not accustomed to working with models like ours. We hope they are willing to work with this new model,” David explained. “Hopefully, the LTFRB spends more time processing applications of transport network vehicle services and drivers, less time on making threats to companies trying to help.”
He said that more than 20,000 drivers and riders in the Philippines have already signed up for the early version of the Arcade City mobile app, but the company had to take it down because it’s not “stable enough to handle all the demand.”
Arcade City: An Uber Alternative?
According to its website, Arcade City is “building a global network of local driver cooperatives called guilds. Guild drivers work together to provide reliable service to their local area.”
After Uber withdrew from Austin, Texas, on May 2016, Arcade City built the world’s first self-governing ridesharing network with over 43,000 members.
— Arcade City (@ArcadeCityHall) August 17, 2017
Arcade City has a unique peer-to-peer model of ridesharing. Instead of controlling driver networks from its corporate headquarters, Arcade City frees individual drivers to build up their own transportation businesses. City networks are governed by local groups of drivers, called cooperatives or ‘guilds,’ who create their own set of policies for their area.
“Drivers are tired of being pawns in the great game of big rideshare corporations buying and selling their loyalty,” says Arcade City CEO Christopher David. “All rideshare drivers – and even taxi drivers – want to be free to build their own businesses that no one can take away from them. Arcade City has an inclusive model that makes the corporate games obsolete.”
Is Arcade City the Uber alternative that Filipinos have been waiting for? With Uber’s withdrawal from the Philippines and the rest of Southeast Asia, as well as the impending sale of its regional operations to Grab, many fear that a monopoly will be detrimental to the welfare of the ride-hailing public. An alternative to Uber, such as Arcade City, will foster fair competition and give more choices to consumers.
Arcade City’s ridesharing model does look interesting. Let’s wait and see if its unique business model will be a big hit with Filipino drivers and riders. For now, it has to overcome legal and bureaucratic hurdles before it can gain widespread acceptance in the country.