The transportation industry is experiencing significant change as connected vehicles, autonomous cars and ridesharing impact the landscape. To stay competitive, industry leaders are constantly looking for opportunities to increase efficiency, improve security, reduce environmental impact and refine the customer experience. Luckily, blockchain has the potential to solve some of the sector’s most pressing problems.
From verifying a vehicle’s history, better supply chain tracking, automating transactions, enabling seamless ridesharing or supporting fairer insurance, mobility enterprises are already integrating this technology and coming out with exciting applications.
See more: Blockchain in mobility
Verification And History
Blockchain technology can prevent the age-old problem of mileage fraud through establishing a transparent, anonymous and manipulation-proof database for mileage. Telemetric data like mileage or battery levels can be uploaded autonomously via the vehicle or through a vendor, such as an autobody repair shop. Accidents and subsequent repairs or service and maintenance work could also be recorded in the blockchain. Having this extra layer of traceability could reduce fraud and significantly impact resale value.
Better Supply Chain Tracking
It’s no secret that blockchain is solving problems and increasing transparency within supply chain processes, including the mobility sector. The vehicle manufacturing process involves an incredible number of components, stakeholders, companies and processes. Blockchain can help every stakeholder in the process get a clear picture of the supply chain. By tracking sales, service, and repairs better, there is more accountability throughout the entire chain.
As new car generations roll out with advanced autonomous functions, automating payments and processes becomes crucial. Smart contracts have the potential to bolster automation in multiple ways.
Reducing the need for barriers such as requiring credit cards and bank accounts could allow automated payments to happen seamlessly. Using smart contracts, settlements can happen behind the scenes, based on defined parameters. Within the leasing and financing space, smart contracts could provide the ability to deactivate the unlocking system of cars with outstanding lease payments.
Autonomous deliveries? An Israel-based nonprofit called the DAV Foundation has created an open transportation protocol that allows anyone to add their vehicle to a blockchain system. Through this decentralized transportation ecosystem, users can access autonomous drone delivery, where drones communicate with both each other and various service providers to facilitate deliveries, charging and maintenance.
Blockchain also offers value within the public transportation space, where bus depots can charge customers and track vehicles easier than ever before.
Improved Ride Sharing
The rise of Uber and Lyft may have disrupted transportation, but new startups are emerging that could pose a threat to these industry leaders.
Chen Weixing, the CEO of Funcity, an app development company, and the founder of the Chinese ride-sharing system Kuaidi Dache, recently said he wants to construct an Uber equivalent that functions on blockchain. In the same vein, DACSEE, a P2P ridesharing app launched in Malaysia, hopes to solve some of the most common issues with traditional ridesharing.
The sharing economy is built on a peer-to-peer (P2P) system where people are connecting cars, houses and more to those who want fractional use of these resources – and it’s not going anywhere. According to McKinsey, the sharing economy within the world’s top regions is expected to experience 28% market growth annually until 2030. With stats like these, it’s no surprise to see more and more P2P startups cropping up.
HireGo, a blockchain-based car rental startup, uses its proprietary ERC-20 HGO token to pay for car rentals via a peer-to-peer marketplace. E-mobility manufacturers like eMotorWerks have supported distributed marketplaces that enable peer-to-peer charging models through a public blockchain transaction layer.
Blockchain is facilitating P2P growth by allowing stakeholders to easily access and share relevant records. By logging sensor data, blockchain technology could enable insurance policies, personal settings and preferences to be bound and unbound to the vehicle – a huge benefit in carsharing situations.
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Growth within the P2P ridesharing sector also has the potential to create a positive environmental impact as well. As blockchain technology drives more opportunities and decreases individual costs for mobility, traditional car ownership is disincentivized. With less demand for ownership, the number of cars on the street will also drop.
Blockchain technology enables the transparent and immutable logging of a vehicle’s sensor data in a decentralized network. Smart contracts allow this data to be processed and implemented into an insurance plan. Verifiable documentation via a blockchain black box could help resolve disputes after an accident. Peer-to-peer insurance solutions like Teambrella promise to guarantee payment to the customer in instances where an insurance event occurs. Other companies, such as Inmediate, plan to make insurance more affordable and flexible for both insurers and customers by using smart contracts. The possibilities are endless, but insurance companies will need to overcome numerous regulatory and legal barriers before blockchain technology becomes the norm.
These are exciting use cases, but some barriers still stand in the way of adoption. On the technical side, scalability is the most frequently named challenge. Security management, who owns the rights to certain assets and the lack of standards are also issues that need to be tackled. Finally, there can be a limited capacity to integrate new technology into existing systems.
There are also economic challenges: transaction costs, questions around profitability and shortages of skilled developers and specialists in blockchain technology. In addition, the inevitable tendency for mobility and transportation enterprises to compete, rather than collaborate, can also slow down development.
In spite of these challenges, the industry is changing and beginning to embrace this new technology. Some of the world’s most renowned automotive brands are already investing in blockchain and pushing forward with solutions. A report by IBM claims that over 60% of automotive businesses will invest in blockchain to manufacture the cars of the future. Initiatives like MOBI, of which my company is a member, are bringing technology companies, academic institutions and NGOs together to increase the adoption of blockchain.
While there are always challenges to integrating new technology, it’s clear that blockchain will change the way the mobility sector operates and unlock new solutions we never thought possible.