In our day-to-day lives, every possible thing is important for us to survive, especially when it comes to electronic devices, digital assets, or simply home appliances. Without these, we cannot spend a single day properly.
In short, we can say that people rely on objects which are very essential for each one of us. And it’s 2020 after all, how can a person not able to use devices such as mobile phones, tablets, laptops, speakers, and what’s not? They are in fact, necessary right?
What about transportation? Nowadays, each of us needs a proper transport system to go here and there, or we can say, we need proper transportation to go to our offices, schools or colleges, etc.
In fact, transportation is one of the basic needs of society. It’s important because it enables communication, trade, and other forms of exchange between people, which establishes civilizations.
So what about public transport? Due to the rapid commercialization of technology and cheap credit, everyone can now easily own a vehicle. But, due to the sheer volume of vehicles, we are forced to build our cities around these vehicles rather than around its people. And yet, modern private transportation is often wasteful, time-consuming, and unsustainable.
Have you ever heard of the term ‘ridesharing’? Yes, ridesharing is the sharing of car journeys so that more than one person travels in a car, and prevents the need for others to have to drive to a location. By having more people using one vehicle, it reduces each person’s travel costs such as fuel costs, tolls, and the stress of driving.
In 2009, the world introduced a ride-hailing service called Uber. The application opened people’s eyes to a more convenient mode of transportation. Years later, ride-hailing competitors such as Lyft, Grab, and Didi have risen.
As it’s 2020 now, life without ridesharing seems unimaginable. It has been analyzed that with global net revenue of $7.5 billion and an estimated 53 percent of the population having tried ridesharing apps, the cultural and economic imprint of ridesharing is indelible. And it’s a growth sector, with an expected eightfold increase set to push the ridesharing valuation to $285 billion by 2030.
An expansion into novel use-cases would allow an even greater impact by ridesharing services, as the rural market is particularly underserved by ridesharing services. By conceiving new ways to serve these markets more effectively can be helped along by blockchain technology.
In this article, we are going to discuss blockchain and ridesharing!
One aim of blockchain is to remove intermediaries between rider and driver. This could mean more lucrative jobs in rural regions, where full-time employment is often hard to come by. Blockchain could also lend an unprecedented level of data security and driver vetting to the future of ridesharing. Some people believe that the technology could also help integrate autonomous vehicles into the ridesharing fleet.
How Blockchain will Reinvent Ridesharing?
Image: Foundation for Economic
Blockchain is the principal driver for boosting ridesharing services. Implementing blockchain in ridesharing is going to change the way the industry works completely. Let’s find it out!
Peer-to-Peer Ridesharing: Today’s cab service providers use a centralized strategy to carry out their operations. Each service provider has its terms and conditions which the driver and the rider must comply with. Moreover, the process of booking cabs requires intermediaries like third party payment platforms, and this lack of transparency leads to more problems. The blockchain is a decentralized ledger where all the information is stored on computers all around the world which can be accessed and traced publicly. Built into the ledger is a mechanism that allows participants to do business with each other and minimizes the need for trust between each other. The need to go through an intermediary is eliminated. Blockchain allows for short or long term vehicle leasing between two parties involved directly. Users can look up for rental services based on their needs without being dependent on intermediaries and choose accordingly. Users can also rent their vehicles out and connect with people in need directly.
Customer Identification: Due to the availability of data on a public platform, it provides for a transparent rider and driver verification. Users can be assured of the identities of individuals availing or providing services on platforms using blockchain technology. Blockchain helps in curbing identity theft as it provides strong cryptographic keys for security against potential attacks and data manipulation. People can be assured of identities while renting out or hiring of vehicles.
Secure Payments: Blockchain can be used to sign digital contracts and make payments directly between the parties involved. The most crucial advantage of blockchain being direct payments between the parties involved, without the need for a third-party payment gateway. Blockchain-based services use cryptocurrencies for transactions. This eliminates the need for real cash and third-party payment platforms for carrying out the transaction.
Data Security: The use of blockchain technology can protect ridesharers’ information from data pirates. The resulting platforms serve as blockchain-based Uber or Lyft alternatives. On these platforms, the information is stored on a decentralized ledger. This information can be accessed only by DApps (decentralized apps) that facilitate transactions between drivers and riders. This way, there’s no central database to be hacked. Many ridesharing apps like based on blockchain technology are pushing the ridesharing industry forward.
Facilitating Payment Using Smart Contracts: Most of us have experienced the dreaded Uber cancellation fee that comes through no fault of our own. Uber charges a $2.40, non-refundable booking fee, plus a $5–$10 cancellation fee for not showing up on time to the vehicle’s location. Poor communication with a driver who can’t get the gate code right can result in the rider being charged for a driver’s incompetence. For a company that raised $11.5 billion across 14 rounds of funding between 2009 and 2016, the system seems unfair, even opportunistic. Some people would say it’s nothing short of a racket — tyranny by cancellation fee. But the blockchain could put an end to this. By basing payment on predetermined conditions and installing them in a smart contract, drivers will get paid only when they have delivered a rider to their destination. If a rider cancels, the contract could release a small portion of the funds to the driver to account for their time in lieu of an arbitrary cancellation fee. It’s a more logical system that cuts both ways instead of only against the rider.
Short-Term Vehicle Leasing for the Autonomous Age: The future is coming fast. It won’t be long until driverless cars pepper city streets and highways. $80 billion was invested in autonomous vehicle technology between August 2014 and June 2017. While 61 percent of respondents in one survey said they still felt safer riding (theoretically) in a human-controlled vehicle, stats defy such sentiments. 37,461 people were killed driving on US roadways alone in 2016. More than 90 percent of crashes are estimated to be caused by some form of human error. With the rise in distracted driving practices, there’s a certain hollowness when touting the “safety” of the human driver. We know the autonomous vehicle age is coming. Innovators are preparing for a future where few people own cars and ridesharing takes the form of a driverless vehicle. Owners of autonomous vehicle fleets will be able to lease vehicles on a short-term basis – think rental cars or prolonged ridesharing. By utilizing a blockchain-linked network for fleet tracking makes sense in terms of cost and logistics. Combining blockchain with GPS tracking, RFID processing, and smart contracts could facilitate the transactional aspects of leasing an autonomous vehicle.
Preventing Data Theft and Abuse: The misconception that Uber’s Newsroom webpage refers to as the “2016 Data Security Incident” proves the industry’s vulnerability to data burglars. The report details the damage that was done when “two individuals outside the company…inappropriately accessed user data stored on a third-party cloud-based service that (Uber) use(s).” Compromised data included the names and driver’s license numbers of around 600,000 drivers in the United States. 57 million Uber customers around the world also had their personal info stolen. 25.6 million riders and drivers were affected by the breach in total. In response to the breach, blockchain geeks considered how their beloved technology could protect ridesharers’ info from data pirates. The resulting platforms would serve as blockchain-based Uber alternatives. In these platforms, information is stored on a decentralized ledger. Information can only be accessed by decentralized apps that connect riders with drivers and execute transactions. This way, there’s no central database to be hacked.
Safety and Screening: The process of screening for applicants based on criteria such as criminal history and traffic incidents are similar to the industry giants. However, blockchain allows decisions regarding safety and security to be made collectively as a community rather than centrally.
Traffic Law Compliance: The ability to log a driver’s traffic record on the blockchain could be used while hiring or selecting a driver.
Lack of Flexibility: Implementing the freedom for riders to choose their driver, as well as drivers having the ability to participate in a referral network or social circle of previously driven customers.
The Promise of Ridesharing
Reliance on single-occupancy vehicles is key to easing traffic congestions. The goal is for people to have practical, efficient, and accessible alternatives that rival the convenience of hopping in their cars and driving on their own. Ridesharing is one dynamic solution that exploded into popularity with the rise of new technology. Ridesharing platforms have made rapid progress in recent years. Worldwide revenue generated from these platforms is expected to be the US $60 billion in 2018.
Currently, the ridesharing market is dominated by Uber and Lyft. Lyft claimed to have 35% of the US ridesharing market in 2018. In India, revenue in the ridesharing segment amounts to US$371 million in 2018. Revenue is expected to show an annual growth rate of 19.6% by resulting in a market volume of US$761 by 2022. User penetration is 2.5% in 2018 and expected to hit 3.9% by 2022.
So, there already exists a solution to the problem of traffic congestion. Services like Uber and Lyft can provide the convenience of comfort traveling and quality service. However, there exists an innate problem with companies such as Uber and Lyft because, with the rise in their reach, these platforms have become more centralized and less transparent. Drivers are unfairly treated by paying increased service commission for their trips to these platforms and face arbitrary changes in incentives. Commission rates for Uber and Lyft go up to 29%.
Smart transportation is about creating a better usage of already existing infrastructure and resources rather than the addition of new ones.
Ridesharing Companies Uses Blockchain
DRIFE: DRIFE is powered by the EOS blockchain. It has the intention to empower both drivers and commuters by solving the current issues of the centralized business. The platform’s system wishes to eliminate excessive transaction fees, redistribute community value, reduce censorship, return community governance, and enhance transparency. Drivers can be a DRIFE partner by introducing other drivers to DRIFE and forming a social community. DRIFE partners gain individual income without any commission. As a blockchain-powered platform, all transactions are recorded on an indelible ledger with a user-friendly interface. The ledger will include all the information about one’s journey, reviews and feedback, driver details, and fare calculations.
TADA: Exclusively operating in Singapore, TADA is powered by Mass Vehicle Ledger (MVL), a blockchain-based ecosystem in which participants provide accurate and transparent transportation data. TADA aims to connect drivers and passengers with trust. It rewards drivers for their safe and friendly service while passengers are rewarded for their accurate usage reviews. For TADA drivers, there are no commissions as it takes none of it apart from debit/credit card transaction fees. There is also an advanced and personalized match system in which more riders can be matched to a driver. Drivers can also enjoy seamless rider pickup service, easy access information operation, and driver incentives. For TADA riders, matches are made with zero stress even during rush hours or bad weather. There are also features such as easy payment methods, careful review management, and rewarding feedbacks.
Chasyr: Chasyr is a California-based company, which used to allow riders to choose who they would want to ride with. Uber automatically matches passengers with its drivers, leaving the rider and driver with no choice. With Chasyr, riders were given a breakdown of their potential driver’s history before requesting a ride. Drivers could also see the passenger’s information before they decided to accept the request. Over the last year, they have been working on the revision for Chasyr and have outlined a whole new idea that will disrupt more than just the transportation industry, as Joshua Lapidus, the COO of Chasyr stated, “There are a plethora of delivery services that onboard 1099 contracted drivers, gouge high percentages from restaurants, coffee shops, and other vendors, and charge high delivery fees to their users. Chasyr follows the decentralized creed of cutting out middle-men profit-takers and empowering the real “shared economy.” Moreover, the new Chasyr will disrupt all delivery services such as Ubereats, Postmates, Instacart, Grubhub, and or any “Peer-to-peer” services that are available currently.
DACSEE: DACSEE claims that it is the “first social ridesharing platform” which means that it is both a ridesharing and social media platform. One can book a ride within a community of riders and drivers and connect with like-minded people. Eliminating the problems of centralized ridesharing platforms, DACSEE aims to improve the way people ride, drive, and socialize. It allows its users to become a Rookie Driver, be monitored by a Trip Companion, enjoys lifetime rewards, and create Social Community Groups.
DAV: DAV is a decentralized peer-to-peer transportation services system that allows anyone to put their own vehicles on the network. It provides a ride-hailing service using blockchain which means there is no middleman gaining revenue. One can also charge their bikes or scooters and earn DAV Token by allowing other people to use their light vehicles in wandering around the city. The DAV Network also allows decentralized manned deliveries in which anyone can send and receive packages on the blockchain. Other than cars and bikes, DAV also provides autonomous drone deliveries and carriers.
All of these platforms are centralized companies that allow their platform to be limited in terms of security, profit, and transparency. When ride-hailing apps are put on the blockchain, riders and drivers no longer need to worry about these limitations.
Riders and drivers need not fret about the mystery of identity as blockchain technology provides a transparent system for the platform’s transactions. Also, because these decentralized networks do not provide a third party, all of the drivers’ fares are theirs to keep.
There are a couple of decentralized ride-sharing platforms that are already available for riders and drivers alike. Cities such as London, Singapore, Tel-Aviv, and California have started operating with blockchain ride-hailing platforms.
Potential for Ridesharing in Asia
Over half of the world’s top ten most congested cities are located in Asia. According to Uber, Asians are stuck in traffic for almost two weeks a year. That’s just a few days behind the total number of vacation days allowed by employers in most of the Asian countries. Governments of these countries have serious concerns about traffic congestions emerging as a drag on economic growth because the number of vehicles is increasing faster than the roads being built. Economic losses in developing Asia are estimated to be over $35 billion in 2030.
Bangkok tops the list in Asia followed by Jakarta and Chongqing. Bangkok remains number one concerning traffic congestion, with just over 12% of the population of Thailand, despite having a new and modern subway system along with other vehicles of transport. It would take twice the time it took to go to work in the morning, to return home in the evening. Because of the increasing number of vehicles and inadequate public transportation infrastructure, people are forced to use motorbikes to avoid traffic in Jakarta. It has even given rise to the motorbike taxi-hailing service industry.
Chinese cities, namely Chongqing, Chengdu, Shenzhen, Beijing, Changsha, and Guangzhou are among the worst traffic-congested cities in Asia along with the Taiwanese city of Tainan. A study conducted by Uber on heavily congested Asian cities claims that 40% to 70% of private vehicles can be removed if ridesharing becomes a viable alternative to owning private vehicles.
The use of blockchain in ridesharing helps bring all the stakeholders involved in the ridesharing platform closer. It will pave the way for a secure and efficient ridesharing service. However, there is a need for a comprehensive blockchain framework policy that would regulate and encourage people to adopt a blockchain-based ridesharing system.
Thus, it has the potential to get more people to adopt ridesharing, which is beneficial financially and also environmentally, as the use of blockchain in ridesharing can not only benefit but also completely disrupt the market.