The Corner

The Austin Ride-Sharing Saga Continues

Residents of Austin, Texas recently voted against Proposition 1, which would have overturned a city council decision to impose robust background checks on drivers for ridesharing apps like Uber. At the time, Kevin Williamson covered the foolishness of that decision. New developments reinforce his point: The vacuum caused by Uber and Lyft’s departure has been filled with a patchwork of ridesharing services that lack any regulation at all.

Arcade City is the most prominent of these. It is charitably described by some news services as an “app,” but the mobile app itself has yet to launch. The form in which it currently exists is a Facebook group with 32,174 members, and the protocol for catching a ride simply involves posting your trip details to that group and arranging a ride with anyone who comments. There is no vetting process for the group; I requested to join and was added but ten minutes later, despite not having lived in Austin since age two.

The service itself eludes description. On its website, in response to those wondering about its status as a corporation, Arcade City demurs:

Yes, there will be a certain legal entity offering rideshare insurance to drivers starting this summer. But we will always stand firm on principle that two people should always be able to connect directly with each other, free from outside interference.

What of Austin’s mandate for background checks? Not a problem, apparently:

Our drivers are entrepreneurs, free to make their own choices about how they want to comply (or not) with government regulations. Some of our drivers want to get fingerprinted and comply with the Austin regulations. Some do not. We respect their choices.

The flourishing of Arcade City is a welcome development precisely because it demonstrates the adroitness of the market at satisfying consumer demand. Not only has it thus far escaped regulation – though keep an eye out – but the details of transactions between driver and rider are completely up to them. No price is mandated nor surge time set. For larger, better established services, companywide top-down organization is necessary to remain efficient. Arcade City is getting by without it.

But one wonders why Austinites are so eager to embrace Arcade City if they genuinely fear that ridesharing is unsafe without regulation. After the failure of Proposition 1, Austin’s city council struggled to figure out which of the myriad startups filling the ridesharing vacuum it would support. Few services appeared capable of meeting demand at peak hours the way Uber and Lyft could while also complying with the city’s new, onerous background check law.

Consider the issue of rider safety – supposedly near and dear to Austin’s heart – on the terms set out by proponents of Proposition 1. Without fingerprinting, the argument goes, riders are vulnerable to violence on the part of drivers. Yet even Uber and Lyft had their own background check procedures. Arcade City has precisely nil.

Rather quickly, Arcade City has blossomed. Will the city council weed it out, too?

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