The mobility economy is a highly fragmented domain, currently undergoing an unparalleled revolution. This revolution takes place on two axes; a shift from ownership to “on demand” and a shift from human operated to autonomous. Although this future seems intriguing, there are two major challenges in facilitating this transition:
Challenge 1: The governance and protection of data and Artificial Intelligence.
Challenge 2: The creation of a level playing field with a low barrier to entry in which all stakeholders are able to cooperate.
In this blog, I will discuss these two challenges and I will propose arguments on how blockchain technology can be implemented to overcome these challenges. I conclude this blog with some basic tips on how to actually start implementing blockchain technology in (public) transport.
THE LEGACY OF THE 2.0 ERA
Before diving deeper into the two challenges described above, I would like to briefly touch the reason why we are currently facing this challenge. In the past decade we have witnessed the rise of companies that have two main objectives:
1. Aggregate huge amounts of data and monetise on this data;
2. Aggressively acquire a significant market share, even if it results in a structural negative cash flow situation (Uber).
These two principles have influenced the mobility economy as well. We have seen the rise of data and payment aggregators that aim to connect as many mobility services as possible on totally closed platforms.
My proposition is that we can not solve our vast mobility challenges with a single app or one platform. In cities where these companies are active, the costs of mobility increase as well as problems like air pollution, number of cars on the road and congestion.
Furthermore we have to realise that access to mobility services is a public good. As a society we should not want this access to be controlled by Google, Facebook, Uber or any other large corporation.
A NEW MOBILITY ECONOMY
In my opinion, the principles of aggressively aggregating data and market share work very well for the internet giants and private companies in general. However, mobility challenges need a different approach. Good access to efficient mobility services serves after all, a public mission as well.
A different economic model is necessary to effectively govern the mobility economy. In this model we need a solid basis for cooperation and incentives for healthy competition. The design principles of this new economy should be based on three pillars; the creation of fair market conditions, social inclusion and sustainability.
The most important factor for cooperation is trust. In the situation where all actors seem to be stuck in a ‘winner takes it all’ strategy, there is little trust and therefore no incentive for cooperation. Along comes blockchain technology. With the use of blockchain technology, we can develop the technological backbone for the new mobility economy. In this operating system, stakeholders can;
1) share and govern data;
2) provide a seamless travel and payment experience to travellers and;
3) protect private data using digital identities.
SHARING DATA IN PUBLIC TRANSPORT, BREAKING WITH TRADITIONAL NETWORKS
In short: a blockchain is a public database that runs on a distributed network and contains data that can not be changed. The data in the blockchain therefore provides the industry a source of trusted and reliable data. With the use of smart contracts, contractual agreements can be self executing. Transactions are peer to peer, eliminating the need for a trusted third party. Because of these principles, blockchain technology can deliver trust and can be used to build the backbone for the mobility economy. The fact that popular perception sees blockchain technology as trustworthy, only adds to the attractiveness of this solution”.
Below I will describe 4 possible use cases where blockchain technology can play a role in improving public transport and mobility in general. These cases have been described at a high level and should give the reader an understanding of the possibilities.
Use case 1: sharing data & AI
Using blockchain technology, mobility companies and governments can agree on the rules on which they share data. Some data is publicly accessible, allowing anyone to use this data to the benefit of society. Other data is exchanged between partners only, using a decentralised data marketplace. Public transport companies can share data about vehicle performance, maintenance and fuel efficiency because more data means they can organise their operations more efficiently. Less pollution and congestion are the results.
Public transport companies and governments can decide that access to certain data should be made public. From students to large corporations, anyone can collaborate on improving the mobility industry. On local and global levels. As a consequence, the speed of innovation will be much higher. Open data can also used to train algorithms to reach a level of “intelligence” (Artificial Intelligence). These algorithms and their intelligence can be used by all mobility companies to operate more effectively and to deliver better, more effective services to travellers.
Use case 2: solve the first / last mile challenge
Public transport and Mobility as a Service (MaaS) companies can use blockchain technology to work together in order to solve the first / last mile challenge. They can simply connect their API to a shared transaction ledger to offer seamless payments and work with smart contracts to incentive each other.
An example: when an e-scooter company delivers a passenger to the bus, the bus operator automatically transfers a percentage of the fee to the e-scooter company and vice versa. This transaction is executed via a smart contract. By incentivising each other, they reduced the costs for the traveller.
Use case 3: cooperation with smart cities and nations
At this moment, the costs of cooperation with government institutions is very high. Blockchain technology can help to solve this. Governments can use a set of incentives that have a real time impact on how people and goods move around. This set of incentives should have the goal of minimising the environmental impact of mobility. This model can replace the current taxation model where vehicles and drivers were taxed.
In the case of an incident or traffic jam, travellers can be rewarded to take different routes, use certain charging stations, leave at specific moments from their work and use different modes of transport. Because this data can be on a public blockchain, governments can deliver full transparency on how public resources have been spent.
Use case 4: protecting privacy sensitive data
At this moment large corporations have access to vast amounts of private data. Using blockchain technology however, travellers can transact with companies using the concept of “zero knowledge proof”. A traveller can validate data like “I have a driver’s license” without actually handing over this document.