Potential of Blockchain in Ride Sharing Industry

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September 21, 2022

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Block Chain / BlockChain

WhatNext

Potential of Blockchain in Ride Sharing Industry

Over the past decade, the transportation industry has witnessed significant changes with the adoption of ridesharing landscape. Companies like Uber and Lyft have become the fabric of modern transportation, while also recording substantial revenues. The industry remains ripe for opportunities and ridesharing valuation is expected to grow up to $285 billion by 2030.

However, it isn’t to say that the industry lives without its problems. As a slight metric of the industry’s underlying issues, it has been reported that only 1% of vehicle miles travelled in ridesharing services were accounted for in the United States in 2016. Moreover, ridesharing platforms exist with involvements from multiple third-party intermediaries, which result in costly payments for the customers in using the service. There isn’t reliable transparency in how prices are set and how spikes are calculated, in addition to the lack of security, safety and privacy mechanisms in place.

Owing to these and numerous other problems, the ridesharing space remains critically in need for solutions to remove centralization between riders and drivers to improve security and refine customer experience. Implementing a blockchain-based ridesharing service can completely disrupt the market, allowing direct transactions between riders and drivers.

With widespread consensus in this regard, several technology platforms have identified benefits of a blockchain-based solution within the ridesharing industry and are now forming solutions attached to solving specific challenges lying in the space. A discussion of the foremost features of blockchain-based solutions in ridesharing, along with companies attempting to provide answers is given below.

  • Peer-to-peer ridesharing

    A blockchain-based ridesharing platform removes the need for a third-party intermediary as users will be able to directly look up rental and ridesharing services, while also being able to rent their vehicle to people in need directly, rooting out unequal profits. For reference, an MIT survey found that around 30% of ridesharing drivers actually pay the platform to drive people around while the underlying company makes greater profits. In addition to the unfair and inconsistent charges users themselves have to pay, there is a great potential demand for fairer and decentralized ridesharing services.Dacsee is a platform using a decentralized social media network to enable a community of drivers and riders using the Ethereum blockchain. The platform offers a peer-to-peer service that lets riders choose their own ride and riders via an interactive social media community.Arcade City is another platform combining different blockchains to integrate a decentralized ridesharing platform. It uses the Arcade Token as its official cryptocurrency and combines the Ethereum, Solana and Arweave blockchains for different protocols on the network.

    Cryptobike is a blockchain-based renting platform that is used to rent bicycles with hourly rates, making the process peer-to-peer, faster and economical.

  • Smart contract payments

    Secure digital payments can be implemented based on a preset contract between parties involved, using blockchain. This would put an end to the woes of ride cancellation fees and other charges that users have to pay in the current model due to poor communication or the driver’s incompetence. The model gives way to a more logical and secure payment system where money only gets released at the successful completion of the smart contract.Chasyr platform is harnessing emerging P2P trends to leverage a community that enables access to nearby food, groceries and retail products. The platform is built on the DAO network, offering users an in-app payment solution in crypto and earn rewards in a gamified way, as well.

    Mixrent is a blockchain-based vehicle ecosystem that enables its distributed ledger to connect vehicle owners and travelers. All transaction costs on the platform are fixed, offering 25% lower rates than major rental companies.

    Darenta is a similar P2P-based carsharing platform based on smart contracts to enable leasing and renting of cars.

  • Data security and customer identification

    Uber revealed that up to 2015, no fewer than 170 cases of sexual assault, including 5 cases of rape were filed against its drivers. Moreover, car accidents in hire-vehicles have also risen significantly. In the current system, there is no record and revelation of both driver and rider identification. Blockchain’s public ledger-based technology stores all kinds of information on open-source record to provide a transparent rider and driver verification process. Such a record would provide an immense security boost to the overall ridesharing industry.BlocVehicle is a blockchain-based car database and renting platform that allows users to keep a history of all vehicles in the public domain. The maintenance history of the vehicles is distributed to enable customers to make informed decisions, ensuring safer car-sharing.Moreover, blockchain-based platforms store information on a decentralized ledger which cannot be altered unless absolutely verified. In comparison, Uber uses a third-party cloud-based service that is prone to hacks and data piracy such as the one observed in 2016 where information of 57 million customers had been stolen in a breach. A blockchain-based system removes a central database to provide immutable data privacy.

    A platform offering a solution to eliminate imposters and data breaches from ridesharing is VeriDoc Global. It offers a blockchain-based solution to provide real-time information regarding the driver and live location tracking on the blockchain during the ride. Its immutable track and trace mechanisms are implemented via QR codes containing a unique digital hash that holds information that is placed on the blockchain for security and authentication.

The future

Blockchain technology has faced its fair share of challenges over the recent years. However, the concept is now beginning to be accepted by renowned companies and nascent startups alike. The same is true about its potential in the ridesharing industry. With largescale identification of existing issues and a need for change within the space, several startups are taking the first move to provide a decentralized ridesharing experience. Features like independent peer-to-peer connection between riders and drivers, a secure and traceable ride experience, and a payment mechanism authorized by smart contracts where no third-party makes shady profits, make the use of blockchain in the ridesharing industry overwhelmingly promising.

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