LTFRB orders Arcade City to 'cease and desist'

MANILA, Philippines — The Philippines’ transport regulator has ordered ride-sharing startup Arcade City to “cease and desist” for operating as a transportation network company without coordinating with the agency.

In an advisory dated April 2, the Land Transportation Franchising and Regulatory Board, or LTFRB, said it would be constrained to take legal actions against Arcade City should the company defy the order.

“LTFRB is strongly warning Arcade City to cease and desist from launching its mobile application on 16 April 2018, and to stop all bookings made with this application/platform as those who are operating are considered colorum,” the regulator said.

Arcade City was first launched in Austin, Texas in 2016 after the withdrawal of Uber and Lyft. The platform allows drivers to set their own rates while riders are free to choose their own driver.

In a report by GMA News on Friday, Arcade City CEO and founder Christopher David said his company would push through with the launching of its mobile app next week despite the LTFRB’s directive.

‘Different model’

David also denied LTFRB’s claim that Arcade City is a transport network company.

"It is a different model than Uber's, and governments are not accustomed to working with models like ours. We hope they are willing to work with this new model," David was quoted as saying.

"Hopefully the LTFRB spends more time processing applications of transport network vehicle services and drivers, less time on making threats to companies trying to help," he added.

Claiming to be an alternative for Uber, Arcade City last year announced that it was recruiting and activating drivers across the Philippines.

According to GMA News, more than 20,000 drivers and riders in the Philippines have signed up in the Arcade City mobile app since 2017.

The LTFRB’s cease and desist order against Arcade City came as Uber prepares to exit the country after the California-based ride-hailing company sold its Southeast Asia businesses to regional rival Grab.

But the Philippine Competition Commission had ordered Uber and Grab to delay the integration of their businesses and continue their separate operations while the antitrust agency examines the domestic implications of the merger. The pair was slapped with a similar command in Singapore.