November 2019 Evaluating the Potential of Cooperative Ridesourcing: A Case Study of Arcade City in Austin, Texas Adam Stocker Transportation Researcher Sara Stephens Cooperatives Attorney Table of Contents About the Study ................................................................................................................................................... 1 About the Authors .............................................................................................................................................. 1 Executive Summary ........................................................................................................................................... 2 What is Arcade City? ......................................................................................................................................... 9 Background ........................................................................................................................................................ 11 Methodology ...................................................................................................................................................... 15 Operational Analysis ..................................................................................................................................... 18 Participants and Requests ................................................................................................................................. 18 Request Types .......................................................................................................................................................... 20 Spatial Distribution of Requests ...................................................................................................................... 21 Operational Effectiveness ................................................................................................................................... 25 Governance Analysis ..................................................................................................................................... 33 Current Governance Model ................................................................................................................................ 34 Future Governance Plans ................................................................................................................................... 39 Governance Recommendations ........................................................................................................................ 42 Survey Results and Travel Behavior Analysis .................................................................................. 51 Demographics ......................................................................................................................................................... 51 Initial Use of Ridesourcing and Arcade City Austin ................................................................................. 57 Driver Survey Results ........................................................................................................................................... 59 Rider Survey Results ............................................................................................................................................. 74 Environmental Metrics Comparison ..................................................................................................... 86 Deadheading Mileage Comparison ................................................................................................................ 86 Vehicle Ownership Impacts Comparison ..................................................................................................... 89 Policy and Legal Implications Review .................................................................................................. 96 Legal Challenges for Arcade City Austin and Similar Cooperative Ridesourcing Models ....... 96 Recommendations for Arcade City Austin and Other Similar Platforms .................................... 101 Policy Recommendations to Enable Cooperative Ridesourcing Platforms ................................ 105 Conclusion ......................................................................................................................................................... 108 Acknowledgements ...................................................................................................................................... 110 References ......................................................................................................................................................... 111 About the Study This report explores the benefits, challenges, and implications of decentralized platform cooperatives as more equitable and sustainable alternatives to established commercial ‘sharing economy’ platforms. The authors examine the case of Arcade City in Austin, Texas, a decentralized peer-to-peer (P2P) ridesourcing platform (similar to Uber or Lyft) that consists of a 36,000-member Facebook group that links riders with drivers. The study uses empirical findings from Arcade City Austin’s operations to inform best practices for P2P platforms. Based on these findings, the researchers make recommendations for cooperative sharing platforms and policymakers. About the Authors Adam Stocker is a transportation engineer and researcher. In addition to serving as a research consultant to the Sustainable Economies Law Center, he holds a research and project management position with the Innovative Mobility group of UC Berkeley’s Transportation Sustainability Research Center, where he designs and executes studies that assess the travel behavior, societal, and environmental effects of shared mobility services. His research interests also include platform cooperatives, with an emphasis on applications related to transportation. Sara Stephens is a cooperatives attorney with the Sustainable Economies Law Center, where she coordinates policy advocacy, education, and client support for more equitable housing and workplaces. She also provides legal support to the East Bay Permanent Real Estate Cooperative. In the Cooperatives Program, Sara coordinates co-oplaw.org, a legal resource library for cooperatives, as well as the development of a legal practice guide for cooperative attorneys. Sara authored the model city ordinance that the Law Center has been working with local cities to adopt in order to incentivize worker cooperatives as an economic development strategy. Sara also offers legal advice to cooperatives, focusing on immigrant-owned businesses and conventional businesses converting to worker ownership. 1 Executive Summary Commercial ‘sharing economy’ platforms have exploded 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, most sharing platforms that currently command large market shares are controlled by a small number of platform owners who consolidate power and extract value to benefit themselves and their investors. These platforms often unfairly and unpredictably dictate wages and commission rates, leading some platform workers to make less than a minimum wage salary after expenses. These exploitative practices have led to unrest among many platform workers and subsequent action by advocacy groups and regulators around the world, as awareness of the precarity of platform work grows. While current discussions mostly focus on regulating the ‘sharing economy’ giants like Uber, Airbnb, and others, less emphasis has been placed on scrutinizing these companies’ fundamental business models and exploring whether more sustainable and equitable alternatives are possible. A small but growing movement of alternatively-organized platforms are beginning to challenge these business practices by distributing power and ownership among platform workers. Platform cooperatives and truly peer-to-peer (P2P) platforms are starting to emerge in fields as diverse as transportation, photography, healthcare, and many others. Platform cooperatives represent a paradigm shift in sharing platform organizational structures and incorporate cooperative ownership and democratic governance to facilitate the sale of goods or exchange of services. While ridesourcing (services like Uber, Lyft, and their global counterparts) is often cited as a possible application for a P2P or cooperative platform, there currently exist very few functioning examples. This study examines the operations of one such P2P ridesourcing platform called Arcade City in Austin, Texas. Arcade City (AC) Austin is a 36,000-member Facebook group that links drivers to those requesting on-demand rides, deliveries, and other driving services. The group originally formed in response to the abrupt exit of Uber and Lyft from Austin in May 2016 due to stricter background checks for drivers. Transactions on AC Austin are not subject to commission, are not mediated by a central platform owner, and rely on a distributed volunteer network of drivers and moderators to keep operations running smoothly. While AC Austin does not currently operate according to cooperative principles, they are one of the only P2P ridesourcing platforms in the world that has served thousands of on-demand rides and requests on a citywide scale continuously for multiple years. Since AC Austin offers a unique opportunity to evaluate