Touted as the “Uber killer” and the next generation of ridesharing, Arcade City has had an app out for almost two weeks without a single ride being given, leading to speculation that the app may not be finished after all.

At the beginning of this month, Arcade City, the much-hyped ridesharing app touting a decentralized structure and eventual integration on the Ethereum Blockchain, released its much-anticipated app.

To the surprise of some, however, at the launch the app did not initially allow any rides to be arranged. Instead, this functionality supposedly lies behind “unlocking” cities by building a critical mass of support from potential riders and drivers.

Christopher David, CEO of Arcade City, explains the reason behind initially restricting the functionality:

“Austin is on track to being unlocked probably by Wednesday of this week. The ball is in their court, so we'll see. Two things are needed to unlock a city: sufficient 'city karma points' representing the connectedness of a new rideshare community, and a constitution describing the leaders' vision for Arcade City in their area and their processes for self-governing. We want to make sure our cities are set up to be self-sustaining, not relying on the HQ for anything other than the mobile app.”

While it will soon be two weeks since the app’s original release without a single city featuring ridesharing functionality, David expects this to change soon:

“Austin has already done most of the work we expect from new cities, so they should be just days away from getting drivers on the road using our new app. Our Austin team leaders are preparing a report on the successful partnership with Unsung.org, and that's going to result in a flood of ‘karma points’ into the system. They are holding a meeting in the next few days to draft their city constitution. It should be exciting to watch, and will definitely help other cities to follow in their footsteps. And we think the flood of ‘karma’ into Austin, combined with our commission-based referral system, will incentivize our Austin trail-blazers to help other cities set up their networks too. There should be a pretty quick domino effect of cities unlocking over the next month. We expect active ridesharing networks in 100+ cities and 10+ countries using our app for rides by the end of the year.”

A gamified ‘karma’ system: community building, or a ruse?

The system of building ‘karma points’ as a precursor to app functionality is not typically part of a ridesharing companies’ strategy.

According to Neal Conner, who assisted David in the Free Uber activism campaign before Arcade City was founded, sees forcing users to play games for points as a way to stall for time:

"'Unlocking’ is a tactic that would have us doing significant marketing work for the company with no guarantee of an actual payoff. I doubt there's anything existing in the app that we're not seeing: so far it's been a stalling tactic, if, and when, ridesharing functionality is actually built. Every screen in the app makes promises of things 'coming soon.’ I'd frankly be embarrassed to refer anyone to it.”

As of the time of writing, no city, including Arcade City’s busy epicenter of Austin, has accumulated the necessary points to achieve functionality.

David maintains that the system is working as intended:

“The ‘karma’ system merely reflects the willingness of individuals and cities to engage in the kinds of community organizing we’ve seen to be successful in Austin. We know Austin was definitely a special case, so we don’t expect that level of activity from all cities.”

According to David, the involved point system is intended to foster a functioning community before debuting the service in a given city:

“At the minimum we seek to identify cities with enough dedicated Arcadians willing to put in place the guidelines and support structures needed to provide reliable service. Whoever is actually committed to that should see the ‘karma system’ as helpful in providing their people a public measurement of their contributions. The system currently is very rudimentary and we’ll be tweaking it over time, eventually putting it on the Ethereum Blockchain and handing off our current centralized ‘referee’ position to community consensus. For now, this system allows us to work with the self-selected ‘most-organized’ cities anywhere in the world, letting folks step up and demonstrate their willingness to help lead the way on decentralized ridesharing as Austin has been doing at this point. We don’t want to decide centrally which cities to roll out in. We can go everywhere, and we will — but we need to start small-ish and scale out. We learned with our early app release from February to April the perils of 'overheating’ and exceeding what our current infrastructure could sustain.”

Despite initial performance roadblocks, David expects cities to become unlocked in short order over the coming months:

“Based on the current levels of interest and cities getting organized, we think multiple cities will be unlocked very soon after Austin, soon to be multiple cities each week. No rideshare company in existence has launched in tens of cities per week, but we expect to be doing that ourselves by the end of year at the latest.”

Has the company run into financial troubles?

The current state of Arcade City has led to speculation that the company has run into financial difficulties after running low on venture capital too soon, leading to a points game to stall until the company can acquire new capital to finish the app.

Conner expressed his disillusionment with the current state of affairs:

"Sad that the new Arcade City is a confusing 'karma' game rather than a ridesharing app. Worse, if true, that all the VC was squandered”

Roger Ver, one of the prime investors in the project, echoes Conner’s concerns over the project’s financial management, indicating that it may not bode well for the company’s future:

“Of course I'm unhappy with how lavishly the money has been spent. Spending money frugally is the sign of a good manager. There are places to spend lots of money and most places you shouldn't spend much at all, especially when it's your seed capital.”

David maintains that everything is going according to plan

Despite concerns from both outside observers and the project’s investors, David maintains that Arcade City has delivered a fully-functioning ridesharing app: