ITEM: With Uber services temporarily suspended in the Philippines by the Land Transportation Franchising and Regulatory Board (LTFRB), Texas-based ride-hailing upstart Arcade City has offered all of the subsequently unemployed Uber drivers a job – which the LTFRB has ordered them to stop.
Earlier this week, LTFRB suspended Uber’s license to operate its ride-hailing service for one month on the grounds that it violated an order to stop accepting new driver applications. On Tuesday, Arcade City announced on its Facebook page (and in a press release) that it was recruiting and activating drivers across the Philippines to fill the service gap left by Uber’s suspension.
Arcade City positioned the move as a bid to help Uber drivers who suddenly found themselves out of work for at least a month. From the release:
“When 66,000 drivers are put out of a job overnight, the suffering is not felt by the corporations and bureaucrats who made the decision,” said Arcade City founder & CEO Christopher David. “The suffering is felt by the stranded riders and the jobless drivers who may now have difficulty providing for their families.”
It’s also a somewhat transparent attempt to poach drivers from Uber. Arcade City got its start a year and a half ago via a similar move in Austin, Texas, when Uber and Lyft were forced to suspend operations in the city.
The company’s pitch for drivers – apart from rescuing them from sudden unemployment – is a decentralized business model that promises them the freedom to build their own transportation businesses rather than report to a central headquarters. Drivers can set their own fees, build their own recurring customer base, and offer additional services such as deliveries or roadside assistance.
The service was initially conducted entirely via a Facebook group. A mobile app soon followed. Earlier this month, Arcade City launched the mobile app on the Apple and Android app stores in 155 countries. The company says it has around 43,000 members, and that it’s on track to become profitable in Q4 this year. It also plans to allow drivers to share in the profits by issuing a “blockchain-based crypto-equity token” allowing for driver ownership and community governance. (The company already uses the Ethereum blockchain to manage driver contracts.)
Arcade City said earlier today it has recruited over 200 Uber drivers so far – 160+ in Manila and the rest in Cebu City, Angeles, and Batangas.
The LTFRB is not pleased, and has ordered the company to stop recruiting drivers because it doesn’t have a transport network company (TNC) license, reports the Philippine Daily Inquirer:
LTFRB board member Aileen Lizada told reporters that Arcade City is “not authorized” by the agency to operate as a TNC as it “has not coordinated” with them.
“They have not yet been accredited by the LTFRB,” Lizada said of Arcade City, adding that all of its cars are “colorum,” or operating without a valid franchise.
Arcade City responded with a statement saying it will keep recruiting drivers anyway, arguing that it doesn’t fall under the LTFRB’s jurisdiction because its peer-to-peer business model is different from Uber’s:
“Arcade City does not provide ‘pre-arranged transportation services for compensation’ and therefore does not fit the LTFRB definition of a transportation network company.”
“Driver entrepreneurs may freely identify as Arcade City drivers, but Arcade City does not require payment from riders or drivers.”