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Blockchain In Ridesharing: 5 Possible Use Cases

  • 7 November 2018
  • Sam Mire

We’ve all been there. It’s the wee hours of Saturday morning, the bars have all closed, and you’re dreaming of nothing but your Tempur-Pedic mattress. A night of downing Fireball shots and rum and Cokes has you well above the legal limit. There’s only one thing to do: call an Uber.

It’s 2019 and life without ridesharing seems unimaginable. The numbers show how ingrained the likes of Uber and Lyft have become in the fabric of modern society. Uber’s net value in 2017 amounted to a whopping $51 billion. Their primary competitor, Lyft, garnered an impressive valuation of $11 billion. Ubers now outnumber yellow medallion cabs by a count of 14,088 to 13,587 in New York City. With a 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.

This isn’t to say that the industry is without its problems — far from it. While growing, it’s been reported that ridesharing services accounted for only 1 percent of the vehicle miles traveled (VMT) in the United States in 2016. This suggests that there is a somewhat limited, short-distance use for ridesharing services. An expansion into novel use cases would allow an even greater impact by ridesharing services. The rural market is particularly underserved by ridesharing services. Conceiving new ways to serve these markets more effectively can be helped along by blockchain tech.

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 believe the technology could also help integrate autonomous vehicles into the ridesharing fleet.

Blockchain for ridesharing - Practical use cases


Facilitating Payment Using Smart Contracts

Blockchain use cases in ridesharing - 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 would say it’s nothing short of a racket — tyranny by cancellation fee. But the blockchain could put an end to the madness. 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.

Companies Trying to Solve This Problem


True Peer-to-Peer Ridesharing

Blockchain use cases in ridesharing - Peer-to-Peer Ridesharing

Below the poverty line is no way to live. Yet, for those who many forced to turn to the gig economy for a wage, poverty is exactly where they reside.

One MIT survey found that after expenses, 1,100 Uber and Lyft drivers took home $3.37 per hour as a median profit, and that’s before taxes. That means that approximately 30 percent of the ridesharing workforce is actually paying to drive strangers around. A revised version of the estimate found that roughly half of surveyed drivers made less than half of minimum wage in their state. Uber drivers are often in the dark about the cut that goes to the company, with one driver claiming that Uber paid him $59 for a $127 fare.

Whether this less-than-50 percent cut is accurate or not, we know that Uber has profit in mind. Reaping that profit means taking a significant cut from each ride. Some have proposed an ecosystem-type platform built on the blockchain as a remedy to these low wages. Drivers and riders could connect directly on such a platform. They could view each others’ reputations and choose their driver based on price, quality, and other free-market factors. It would be a welcome alternative for many drivers fed up with the current ridesharing pay structure.

Companies Trying to Solve This Problem

  • RideCoin Upcoming ICO designed to provide P2P ridesharing with no middlemen.
  • DACSEE Purely P2P Ridesharing App launched in Malaysia with $33million ICO.
  • Arcade City – Gamified ridesharing concept. 
  • ChasyrA decentralized ridesharing platform and software as a service.

Short-Term Vehicle Leasing for the Autonomous Age

Blockchain use cases in ride sharing - Short-Term Vehicle Leasing

The future is coming fast. It won’t be long until driverless cars pepper city streets and highways. You better believe ridesharing services are calculating how they’ll use autonomous vehicles to their advantage.

$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 U.S. 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. 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. In other words, never fear. The future of ridesharing in the autonomous vehicle age is being prepared for as we speak.

Companies Trying to Solve This Problem


Preventing Data Theft and Abuse

Blockchain use cases in ridesharing - Preventing Data Theft and Abuse

Data theft is so 21st century. No industry is immune, not even ridesharing.

The snafu that Uber’s Newsroom webpage refers to as the “2016 Data Security Incident” prove 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, a la Uber.


Transparent Rider, Driver Identification

Blockchain use cases in ridesharing - Transparent Rider, Driver Identification

Once upon a time, getting in a car with a stranger was frowned up.

Today, it’s a way of life. But many of the fears that prompted “stranger danger” remain.

Uber disclosed that between 2012 and 2015, five complaints of rape and, as they stated it, “less than 170” legitimate cases of sexual assault complaints were filed against drivers.

Congratulations?

These facts bring up an alarming reality: we know virtually nothing about who we choose to get into a car with. The driver knows virtually nothing about the rider besides a (possibly fictional) first name and a star rating. Ridesharing services assure users that their drivers have passed a thorough background check. Despite these “checks”, Uber and Lyft drivers have been responsible for deaths, assaults, driving while a felon, and a laundry list of other disturbing incidents. Crashes involving for-hire vehicles tripled between 2014 and 2016, going from 534 in July 2014 to 1,672 in June 2016. Yellow cab crashes decreased during that period, leaving one culprit: ridesharing drivers. Riders deserve to know certain information about who is driving them. A blockchain record that allows individuals to see critical metadata about their potential driver — and vice versa — would be huge for the security of all parties.

Companies Trying to Solve This Problem

  • Chasyr P2P Ridesharing app promising more fair treatment for drivers using blockchain.
About Sam Mire

Sam is a Market Research Analyst at Front Lines Media. He's a trained journalist with experience in the field of disruptive technology. He’s versed in the impact that blockchain technology is having on industries of today, from healthcare to cannabis. He’s written extensively on the individuals and companies shaping the future of tech, working directly with many of them to advance their vision. Sam is known for writing work that brings value to industry professionals and the generally curious – as well as an occasional smile to the face.

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