Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius


Austinites try to fill in for Uber, get impounded – what now?

After Prop 1 ran Uber out of Austin, the newly-opened ridesharing marketplace gave several startups the opportunity to fill the functional void. Sadly, one is being targeted by police operations.

uber austin

Not great for its reputation

One odd upside to Austin’s Prop 1 saga is that the newly-opened marketplace gave several startups the opportunity to fill the functional void and drum up some brand loyalty from the citizens of Austin. Sadly, one of the companies is being targeted by police operations.


What happened to Arcade City?

City police cited and impounded a member of the Arcade City rideshare group over the weekend. In a statement, The city said “companies and individuals providing transportation services and charging more than the federal reimbursement rate without appropriate documentation are illegal in the City of Austin” (for the record, that rate is 54 cents per mile).

Arcade City claims these regulations shouldn’t apply to them because they don’t employ anybody, contract or otherwise.  Instead of creating an app that coordinates all rides, this organization started a Facebook group where riders and drivers could negotiate services without the middleman taking a cut.

Instead of a centralized organization, this group simply serves as a decentralized, peer-to-peer platform. Technically, all rides are free, but tips are welcome.

Because of this, in a response video, founder Christopher David pledged to pursue legal action against the City of Austin for this and any forthcoming citations against community members.

Cutting out the middleman

Legality aside, this certainly doesn’t look good for the city’s current characterization as anti-technology. While Arcade’s City concept is still in its infancy, it potential has great perks. Critics scold Uber and Lyft for not paying their drivers much money while reaping millions of dollars in profits.

Advertisement. Scroll to continue reading.

Without the middleman setting prices and taking their cut of the transactions, drivers in a true peer-to-peer system stand to make more money, even when it costs the riders less money.

To choose to target them through police action, rather than bring them to the table for a discussion about how to move forward, is terrible for the city’s image.

Opportunity for bounce back

At the same time, there’s still plenty to be skeptical of with Arcade City. The CEO has made questionable choices in past ventures. The response video doesn’t help his image; his anger comes off as childish and rooted in a fixation to “stick it to the man.” Plenty of other disrupters do so with level heads, and there’s a reason for that; it’s a better look. There’s also the question of how such a system will actually generate revenue to keep it going. Apps don’t get built for free.

How the Arcade City team chooses to monetize this venture remains to be seen; it’s hard to see any option that wouldn’t void their use of their legal loophole.

All that being said, it appears Austin’s government is bent on dismantling the operation before we get to find out. For that, they should be ashamed of themselves.


Written By

Born in Boston and raised in California, Connor arrived in Texas for college and was (lovingly) ensnared by southern hospitality and copious helpings of queso. As an SEO professional, he lives and breathes online marketing and its impact on businesses. His loves include disc-related sports, a pint of a top-notch craft beer, historical non-fiction novels, and Austin's live music scene.



  1. Point A2B

    July 3, 2016 at 10:35 am

    It’s interesting to note that none of the Austin drivers who were in fact contract drivers for Uber/Lyft, we’re not and had not contracted with Arcade City. They were merely granted access to a group of highly motivated passengers in desperate need of services. The vetting process for access was providing a Uber /Lyft profile. By doing so this would, in AC’s founder’s mind, sustanciate the drivers validity of passing the security check. The problem with tat was two fold. 1) it was the similar type of check which wasn’t sufficient enough for Uber/Lyft. 2) It created an even bigger potential for creed, and a method of circumventing AC’s vetting process. In fact there were individuals doctoring up uber/Lyft profiles just so they could gain access to the ever growing passenger pool.

    This created an even bigger mess. Why, because of the lack of oversight and governing of the hive by CD. Many times during the, let’s call it, “The Arcade City Takeover” campaign, CD mentioned the app would be out. 1st it was 2 weeks, next it would be beta tested by select deivers, and as of yet, still hasn’t been released. For me it gives rise to his mis-management style and given his questionable pass makes it abundantly clear that this go around isn’t be any different.

    Myself and many others from the original 1811, the core group of AC drivers, had mentioned numerous times of the importance of meeting the commercial and security compliance of any of the cities we’d planned on operating in. CD choose to take a different approach thus putting drivers and passengers safety and lively hood at jeopardy. This is what put the cross-hairs on the “non-contracted” driver. Of course ignorantly accepting the inticement of money for a commercially related activity without meeting those commercial requirements of that city is irresponsible. To be fare The City of Austin had every right to do what they did. Ignorance of the law is no excuse. Put another way in commerce there are rules that must be abided by and ignoring them is no excuse to do as thy will. Arcade City usefulness without a viable platform will continue to put all parties involved in jeopardy.

  2. Pingback: Austin Police Crack Down on Ride-sharing Rules - Quoted

  3. Pingback: Austin, your rideshare options are about to get shaken up, again - The American Genius

Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.



Business News

Apple is adding nearly a million square feet to their already giant Austin campus, to potentially seat another 15K employees.

Business Finance

Layoffs, hiring freezes and sales drops for tech giants like Meta, Lyft, Docusign, and Bed Bath & Beyond have all been announced this week.

Business News

(BUSINESS) If you drive for popular delivery services as a side hustle or your full-time job, check out how much you could save on...

Business News

(BUSINESS) Uber isn't new to in-app expansion, especially since its grocery and goods delivery service took off - now, Uber will let you choose...


The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.