Exactly a month ago, Uber and Lyft paused operations in Austin after voters defeated Proposition 1, an attempt to overturn mandatory fingerprint-based background checks for Uber and Lyft drivers in the city.
With almost a million residents of the 11th largest city in the United States now void of the reliable transportation option that is Uber and Lyft, no one really knew what would happen.
And while a few law-abiding apps sprung up to take Uber and Lyft's place, it seems that a good deal of demand has shifted to an unlikely provider – an unregulated, peer-to-peer Facebook group.
The group is called Arcade City Austin / Request A Ride, and now has over 30,000 members. So how does it work?
Riders post their requests, which is typically a pickup and drop-off destination as well as desired time (most as ASAP). Then, literally within minutes, potential drivers will respond with an ETA, price, and phone number to call to confirm the pickup. Riders are then instructed to delete the post after confirming a ride, as not to clutter the page.
Drivers have even starting posting custom "brochure" graphics, that typically have a picture of their car, screenshot of their Uber or Lyft account (showing they have been through a background check), and phone number.
Although it operates totally peer-to-peer, the group was created by Arcade City, a new ride-sharing app that while not yet launched, hopes to eventually provide a totally decentralized ride-sharing solution that includes payment, identity, and reputation management.
What exactly does this mean?
Well, Arcade City will allow riders and drivers to decide on a cost and process the payment on their own – whether that is cash, Venmo, or hugs. While the app will process credit card payments as a convenience feature, this isn't a necessary or even encouraged method of payment.
While this seems like it may work, decentralization gets trickier when you start trying to figure out background checks and identity verification. But Arcade City is confident they have a solution that will protect riders, while still remaining decentralized.
The startup explained that each driver will have a profile that can embed a Facebook or Twitter profile, background check, FBI check, driver's license, proof of physical address, and more. Each driver can attach as few or as many of these verification options as they like, and the app will use these to compile a score that summarizes trustworthiness for each driver. Essentially, since riders will always be able to pick their driver, drivers who choose not to verify should be weeded out of the platform.
This of course leaves the door open for major safety liabilities, like the potential that a rider may choose a driver that wasn't verified. Even though Arcade City is shifting responsibility to the rider, their PR would still suffer if there was ever an incident.
Not to mention the huge liability that this Facebook group is. Even though drivers post images of their Uber app to show they were approved and background-checked by the platform, these images can easily be faked. There will always be a definite risk that you are getting into the car of a literal stranger, someone who never had a background check or may not even hold a valid license.
But for now, the group seems to be working. By creating the Facebook group Arcade City was able to capitalize on the void in transportation that Austin has faced over the past month, and now had an eager customer base of over 30,000 that it hopes to migrate to its app once launched.
This article by Fitz Tepper originally ran on TechCrunch, a leading technology media property, dedicated to obsessively profiling startups, reviewing new Internet products, and breaking tech news.