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A new player has entered the ride-sharing arena with an ambitious plan to take over the entire industry in a brand new way. This player is Arcade City, a company known as the "Uber killer". Unlike Uber's centralized management, Arcade City is a decentralized company. The company is currently integrating Ethereum into their operating system. Arcade City founder Christopher David is an activist and entrepreneur who ingeniously used Bitcoin crowdfunding to get a “free Uber.” Cointelegraph spoke with Christopher David on the topic of how to integrate the Ethereum blockchain into the operations of a ride-sharing company. CoinTelegraph: What made you decide to use Ethereum? Christopher David: Ethereum provides us with the entire technical package: everything we need can be found on the Ethereum platform, and in addition, there is a strong and well-managed Ethereum community. The main reason for our decision, not only because of Ethereum’s special technical features, is that the vision of Ethereum is very consistent with our own vision of peer-to-peer transportation and distributed logistics. For the problems we need to solve in the process of implementing a decentralized business model, we know that we can find solutions through Ethereum. Even in the early stages of our integration of Ethereum, we have received great support from the Ethereum community, which is an early adopter of Ethereum technology. So we believe that the Ethereum community will be a good partner for us on our way forward.
CT: Will Arcade City use Ethereum extensively? What would that integration look like? Christopher David: We intend for Arcade City to be the first large-scale, “mainstream” Ethereum company. This will require adapting Ethereum to accommodate our non-technical user base – riders and drivers – who will engage in peer-to-peer transactions around the world. With a “minimum viable product” app available on the Android and Apple app stores earlier this month, we have already built a user base willing to test new features and provide feedback. We are now building our prototype ridesharing company on Ethereum, starting with the identity and reputation systems. Our first goal is to deliver a working proof-of-concept of a reputation system on Ethereum by the end of April. Many of the rules for managing rider reputation will be encoded into smart contracts. If our drivers in testing agree that their reputation points drop too far after their first negative rating by a rider, we will modify the smart contract. Obviously, this will bring up other governance and consensus considerations as well. We want to learn as much as possible from our community members and communicate our experiences in an open, evidence-based way so that others can learn from us. We will then expand our reputation system beyond the specific structure of a ridesharing company to interoperability with other industry systems. Gradually, we will go through a process similar to Ethereum’s proof of concept, testing, and iteration. We will expand our business model to various fields as much as possible and advance it to blockchain, including management, financing, and even insurance and arbitration.
CT: Did the company encounter any difficulties in helping drivers understand this new and somewhat radical technology? External or internal resistance? Christopher David: Our drivers have been receptive to learning the technology, and some have had some difficulty, but that’s not a barrier. Understanding the technology itself is one thing — something I don’t know myself — but for many drivers, decentralized technology is becoming more and more obvious. Uber and Lyft drivers worry every day about the San Francisco headquarters cutting into their profit margins, or about central governments forcing peer-to-peer transactions. From this perspective, the call for decentralization is getting louder. If Ethereum is the best way to decentralize power to drivers and facilitate sustainable peer-to-peer transactions, then drivers will be happy to use Ethereum.
CT: What challenges do you foresee in integrating with Ethereum? Christopher David: Our primary challenge should be to bridge the gap between the two worlds: one is the pure decentralized abstract realm of blockchains - which is what we hope to achieve in reality as soon as possible; the other is the real world, full of regulations, governments, outdated insurance models, security issues, background checks, lost items, consumer services, etc. We plan to keep our hands firmly in each camp, pulling them together. For now, we need to articulate our business vision and raise the necessary funding, which will be used to buy rideshare insurance for drivers, which is our main obstacle. Fundraising would be easy for a company like ours, assuming that the company is just going to sell or go public in the future. But we don't want to do that. We want to create an asset for the entire community, an open distributed logistics platform that any driver, business or startup can enter and immediately access what we build. Ultimately, Arcade City will not be managed by any company or our founding team; it will be a public utility maintained by the entire community. So how can we achieve this? Before that, there should be some tokenized financing model that can give early drivers and builders a fairly generous reward to thank them for their contributions to the development of the entire network. Can or should we crowdfund using ether? How should we build it? We have these ideas but don't know how to implement them. So we need to turn to the Ethereum community for help. How can we build a decentralized Uber on the blockchain? What excites us to be involved? These are questions we all need feedback and help to find the answers to.
CT: There are a number of other ride-sharing companies competing with Uber and Lyft. How does Ethereum give you a competitive advantage? Christopher David: Why are Uber and Lyft able to take billions of dollars in venture capital from companies like GM? Because companies like GM believe that building logistics infrastructure will support the development of self-driving cars in the future. There is a problem with this approach: these investments only make sense as long as centralized institutions like Uber and Lyft remain relevant. Both companies can only legally charge 20% to 25% of each passenger. Uber and Lyft have spent a lot of money to acquire drivers and have high driver turnover, partly due to poor driver treatment and partly due to competition for driver fee bottom lines. In contrast, our driver acquisition fees are $0. We turn some drivers away because we don’t need as many. How will Uber and Lyft maintain their current revenue models if Arcade City continues to absorb their drivers?
CT: Is Ethereum really necessary for the project to run, or are crypto equity schemes just for profit? Christopher David: We can build reputation systems and other structures using traditional client-server technology, and even build our own blockchain and open source code to replicate the network effects of the Ethereum ecosystem. But this will isolate us from other developers working on the same problems. We don't want to lose the interoperability of shared standards. Contributing to the Ethereum ecosystem and benefiting from Ethereum will help us create other opportunities, such as a shared reputation market. Crypto equity plans do not give founders the same huge profits as traditional venture capital plans. I have never wanted to see a large concentration of wealth in the hands of one person. Crypto equity plans will make wealth more dispersed, just like a rising tide that lifts all boats at the same time. The reign of unicorns is coming to an end. The era of group rule is coming.
Original article: http://cointelegraph.com/news/swarm-activism-powered-by-bitcoin-free-uber
By Joël Valenzuela
Compiled by: Kyle
Source (translation): Babbitt Information (http://www.8btc.com/arcade-city-uses-blockchain-tech-take-uber)
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