Bitcoin.com spoke with the co-founder of the decentralized ride-sharing app Arcade City, Christopher David, on the project that aims to disrupt an already disrupted industry. Arcade City’s decentralized approach brings an unprecedented level of freedom and choice to drivers and riders, according to David. “Uber’s long-term vision is, ‘If we can get you a car in five minutes, we can get you anything in five minutes,’ he told Bitcoin.com. “Ours is the same, minus the central coordinating authority.” The app is scheduled to launch today.
“A bunch of eggheads in San Francisco are right now centrally controlling rates For hundreds of thousands of drivers around the world. Yeah, we think we can improve on that system.”
Bitcoin.com (BC): What is Arcade City and why did you pick that name?
Christopher David (CD): Arcade City will be a decentralized marketplace for service providers, focusing initially on ride-sharing. An arcade is a meeting place — implying fun — and also a synonym for agora, the marketplace of ancient times. Uber’s long-term vision is, “If we can get you a car in five minutes, we can get you anything in five minutes.” Ours is the same, minus the central coordinating authority.
By decentralizing decisions about pricing and particular services to individuals themselves, we are creating the marketplace of the future.
The blockchain will be the great leveler, undermining centralized authority in industry after industry. By decentralizing decisions about pricing and particular services to individuals themselves, we are creating the marketplace of the future. That’s a mouthful I know, and a gamified agora certainly requires extra explanation. For now, it may help to just think “Arcade = fun!”
BC: What is a “gamified” peer-to-peer logistics network? How does the concept of video games align with your vision?
CD: We solve the issue of decentralized reputation through opt-in gamification layers where you level up your driver profile by providing safe and enjoyable customer experiences. Down the road, the rules governing the provision of “experience points” will be driven by community consensus and encoded as smart contracts on the Ethereum blockchain. To make this accessible to the consumer, we are borrowing the concept of “leveling up” your driver or rider profile from role-playing games. Riders will know at a glance that a Level 20 Driver from the Arcade City mainnet will be a safe and enjoyable ride.
Already our core driver group is planning out ventures in food delivery, courier services, and roadside assistance.
The network is ‘peer-to-peer’ because riders will be able to use our network solely to identify community-vetted drivers and transact privately with them if they want. And we describe it as a logistics network because this same network of drivers can be used to provide services other than ride-sharing. Already our core driver group is planning out ventures in food delivery, courier services, and roadside assistance. Drivers can provide those services from day one if they want — providing substantially more flexibility than Uber.
BC: Can you walk us through how the Ethereum blockchain will be used? Why did you choose Ethereum in particular?
CD: For us the chief technical appeal of Ethereum is its robust smart contracts system. Programming a consensus-driven gamified reputation system into a Turing-complete blockchain just seems to make the most sense. When we begin focusing on our Ethereum integration later this year, we’ll do a thorough review of what can and should be moved to the Ethereum blockchain. So we don’t have all the technical details filled in right now and we’re looking for support in that area.
Programming a consensus-driven gamified reputation system into [Ethereum’s] Turing-complete blockchain just seems to make the most sense.
For me the vision of Ethereum makes sense on an intuitive level; specifically the idea that Ethereum will do for human relationships what Bitcoin is doing for money: remove arbitrary intermediaries and empower direct person to person interaction.
CD: In peer to peer mode, drivers and riders can agree to whatever method of payment they like. We won’t know about it, won’t get a cut of it, won’t care. They want to barter car rides for pony rides or dogecoin, sure. We offer credit card payments through the app similar to Uber, including bitcoin payments through integration with Stripe. We’ll add other official payment methods down the road depending on user demand. But nothing stops rider and driver from transacting directly in whatever trade they want.
Our tests of donation rides here in New Hampshire have been amazing — with drivers consistently earning 2-3 times what they would have gotten with Uber.
BC: How do you plan to attract disgruntled Uber and Lyft drivers if you’re a donation based company?
CD: Donation rides are one optional payment method. Drivers are free to set their own rates. Our tests of donation rides here in New Hampshire have been amazing — with drivers consistently earning 2-3 times what they would have gotten with Uber, even before the rate cuts. But it may not work everywhere. So we won’t be centrally mandating that or any pricing structure. The Achilles’ heel of Uber and Lyft is their centralized management of pricing. Taking those decisions away from drivers will prove a major flaw when a true competitor emerges that allows drivers that ability.
BC: How has your soft launch in Portsmouth been received? What do the drivers like and what do they want to change?
CD: Our New Years Eve soft launch in Portsmouth was amazing, with 100 people transported safely. Riders loved the ability to pay what they thought was fair. Drivers were initially uncertain about the donation rides but ended up enjoying them once realizing that people almost always gave more than Uber would have charged. In planning our policies after launch, drivers in some cities around the country insisted that donation rides just wouldn’t be viable for them in their area.
Drivers were initially uncertain about the donation rides but ended up enjoying them once realizing that people almost always gave more than Uber would have charged.
That’s completely fine and we aren’t mandating that as a payment method. Generally we are freeing drivers to make their own decisions. We’ve compiled a pretty impressive wish list of features that drivers have requested. When we get even just halfway through that list later this year, we’ll have by far the best ride-sharing app on the market.
BC: Do you think “logistics networks” such as Arcade City and Uber can become formidable competitors to centralized ones like UPS and Fedex in the future? How do you see this playing out?
CD: I’ve read enough Mises to know the failures of central planning. That applies to corporations just as it does governments. A bunch of eggheads in San Francisco are right now centrally controlling rates for hundreds of thousands of drivers around the world. Yeah, we think we can improve on that system. The cool thing about liberating people from central control is you never know what ideas they are going to come up with. Freeing drivers and service providers to create custom offerings tailored to their local market or some unique specializations will eventually result in far more powerful and resilient networks than any centralized entity.
BC: What cities or regions do you plan to roll out in first? Where do you see the most potential?
CD: We initially planned a small launch for a handful of cities in New Hampshire and surrounding areas, aiming to recruit 100 drivers by the end of January. We ended up recruiting 1,800 drivers across tens of states and four countries, and had to shut down our signup process because we couldn’t handle the demand. Our drivers have self-organized in more than 50 regional Facebook groups. The largest of those is in Midland, Texas, where Uber just withdrew from due to some local regulations. Our drivers there have taken the initiative and gotten on multiple local news stations and given tens of peer-to-peer rides even though we don’t yet have the app ready.
I think capital will shift from chasing unicorns to growing distributed networks and ecosystems.
That same dynamic is playing out in multiple cities around the country: drivers taking promotion into their own hands. So I can’t say yet what launch will look like, but our most built-up areas are in Midland, Texas; Fresno, California; Raleigh, North Carolina; and Chicago. Not because of any decision we made, but because that’s where our drivers have been hustling hard.
BC: Down the road, do you expect that a decentralized network such as Arcade City can see as much funding as Uber and Lyft? In other words, will we see “decentralized unicorns” in the future? If so, how will raised funds be used if there is no CEO and shareholders?
CD: Yes, I think capital will shift from chasing unicorns to growing distributed networks and ecosystems. Ten years from now if you look at aggregate investments in startups across the entire Arcade City network, I think it will exceed the amounts currently raised by the unicorns. Similarly, I don’t expect token-only funding models to eclipse the big boys anytime soon. We are looking at a hybrid model of various AC-related entities raising equity financing to advance specific business models, with the underlying blockchain-based platform using transactions facilitated by a token — Arcade token! — with crowdsales as appropriate. We already have regional groups organizing to raise their own funding to pay for local compliance costs using their own legal entities. We don’t see a need to choose just one model.
The Achilles’ heel of Uber and Lyft is their centralized management of pricing. We think we’ve crafted the bow and arrow to take them down.
Don’t ask me for financial projections on the above. I wouldn’t know where to start. I do know that anyone valuing Uber at $60+ billion severely underestimates the power of decentralized networks. The Achilles’ heel of Uber and Lyft is their centralized management of pricing. We think we’ve crafted the bow and arrow to take them down. Not because we know how to run a multibillion-dollar corporation better than Uber, but because we’ve combined our firsthand industry knowledge with a sound understanding of the trends toward blockchain-based decentralization.
Are you looking forward to decentralized ride-sharing and logistics networks? Share your thoughts and comments below!
Images courtesy of ridesharecrew.com, unionleader.com, arcade.city