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Gov’t to sue ride-sharing startup Arcade City if it fails to stop operations

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By Janina C. Lim, Reporter

THE government has threatened to take legal action against ride-sharing startup Arcade City if it fails to halt operations and proceeds with its plan to launch its mobile application next week.

The Land Transportation Franchising and Regulatory Board (LTFRB) has directed Arcade City to cease and desist operations “as it was operating as another form of Transportation Network Company without coordinating with the agency.”

The LTFRB also “strongly” warned Arcade City to cease and desist from launching its mobile app slated on April 16 “and to stop all bookings made with this application/platform as those who are operating are considered illegal, the agency said in an advisory dated April 12 and sent to reporters on Friday.

Should the company fail to comply, the LTFRB said it will be “constrained” to file charges against Arcade City.

But the ride-sharing app is unfazed.

Asked if it will pursue its mobile app launch plans on Monday, Christopher David, Arcade City’s Founder and CEO replied in the affirmative while encouraging drivers “to sign up to provide service in their area” as the app will be launched nationwide.

The launch comes in the wake of Uber Technologies, Inc.’s exit from Southeast Asia after its operations in the region were acquired by Grab Holdings, Inc.

“In August 2017, Arcade City filled the void in the Philippines when Uber pulled out giving over 66,000 people jobs. Again in November 2017, Arcade City provided a platform available to over 300,000 drivers that were suspended on the Angkas service,” the Arcade City’s Friday statement read.

In an e-mail interview on Friday, Mr. David explained that the software is a platform for drivers to run their networks without taking any cuts of the driver profit. They will be visible and their services, made available, to the riding public once they sign up and create a profile with Arcade City which also serves drivers to connect with one another.

Mr. David said this was not the first time the LTFRB directed them to stop operating.

“Last time the LTFRB asked us to shut down, we said we are not a TNC/TNVS and asked them to explain what part of their law we weren’t complying with,” he said.

Under the LTFRB’s Memorandum 2015-015, a TNC is defined as an “organization whether a corporation, partnership, or sole proprietor, that provides pre-arranged transportation Services for Compensation using an internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles.”

Instead, Mr. David advised the LTFRB to spend “more time processing applications of TNVS and drivers, less time on making threats to companies trying to help.”