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Evaluating the Potential of Cooperative Ridesourcing: A Case Study of Arcade City in Austin, Texas

Project Leads
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ADAM STOCKER

Transportation engineer, researcher, and consultant at Sustainable Economies Law Center

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SARAH STEPHENS

Housing Program Director, Sustainable Economies Law Center

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Project Description

Digital sharing platforms have expanded in popularity over the past decade as technology has increased connectivity and reduced transaction costs, making sharing assets and services cheaper and easier than before. However, serious equity, labor, and environmental problems can arise when consolidated power is held by a small number of platform owners who often use unfair and extractive techniques to benefit themselves and their shareholders as opposed to the platform users and society as a whole. Platform cooperatives are an emerging approach to more centralized ‘sharing economy’ platforms that involve cooperatively owned, democratically governed platforms to facilitate the sale of goods or exchange of services. The goal of platform cooperatives is to decentralize the power of protocols and platforms to allow users and society at large to benefit from the shifting of transactions to the digital realm.
Although ridesourcing services are a commonly cited possible application for platform cooperatives, at present there are very few organizations operating as ridesourcing cooperatives. In May 2016, Uber and Lyft exited the Austin, Texas market when the city voted for stricter fingerprint background checks for drivers. More than a half dozen other ridesourcing organizations emerged in their absence, including Arcade City (AC) Austin, a decentralized ridesourcing cooperative which serves as a platform for coordinating on-demand rides, deliveries, and other services between requesters and drivers. The group is also one of the only examples in the world of a city-scale cooperative ridesourcing organization serving on-demand rides and requests.

This research will evaluate AC Austin and provide important and novel insights into the benefits and drawbacks of cooperative ridesourcing as compared to more prevalent centralized commercial approaches, such as Lyft and Uber. The researchers will uncover how and why this unique operating and governance model has succeeded in Austin and will contribute key findings to serve as a basis for understanding the implications of transportation platform cooperatives. The research team will address the following overarching questions as part of this project: (1) What factors are important for sustaining operations and ensuring equitable governance of decentralized cooperative ridesourcing platforms like AC Austin? (2) What are the environmental impacts of AC Austin’s current operations and what are the environmental implications of decentralized transportation cooperatives compared to their more centralized counterparts in general? (3) What policy frameworks and proactive governance approaches can be implemented by both regulators and transportation cooperatives themselves to ensure effective, equitable, and environmentally sustainable operations?
In completion of this project, the project team will review the history of Arcade City, transportation cooperatives, and platform cooperatives. The project team will review literature and online materials regarding transportation cooperatives, including their history and best practices. We will also review prominent examples of emerging platform cooperatives and will examine their various operating and governance approaches.

Then researchers will conduct an operational analysis. This analysis includes metrics such as the number of active drivers and requesters, average driver response time to trip requests, average wait time, and trip origin and destination locations, among others.

The researchers will investigate the governance structure of AC Austin. ​​Topics will include conflict resolution mechanisms, driver onboarding, operational change consensus, planned applications of blockchain technologies for governance, moderator appointment, and insurance and other resource pooling, among others. Benefits and challenges of AC Austin’s current governance model will emerge that could inform best practices for this group and others like it as cooperative shared mobility systems scale to more members and markets.

The project will include an environmental impact analysis of AC Austin. The researchers will collect survey data regarding changes in vehicle ownership, reductions in personal vehicle driving, and substitution of other travel modes, and assess the change in VMT and GHG emissions due to the availability of AC Austin. They will use these findings and those from other studies to assess the environmental advantages and disadvantages of
decentralized mobility systems compared to more centralized approaches.

Lastly, the project will explore policy and legal implications of Arcade City and other transportation cooperatives. This analysis will include a review of pertinent literature of policies that may present barriers to AC’s operational model at the city, state, and federal levels. The project team will research potential policies enacted in other fields that could either limit or enable the development of transportation cooperatives in the future. They will assess best practices for organizational policies within cooperatives that could help ensure effective and
equitable governance as transportation cooperatives scale to more members or additional markets. The team will also examine open data access and privacy considerations of decentralized platforms.