How blockchain will revolutionise the way we use cars

Blockchain-based mobility services will challenge the monopoly of private platforms, by decentralising the system, putting the power back in the hands of the end users and protecting their personal data.

Blockchain is a technology that allows to store and share information without any central control organism. Its most famous application is the bitcoin, an open-source, peer-to-peer and digital decentralised cryptocurrency, created in 2009. Basically, the blockchain is a growing list of records (blocks) that are linked and secured using cryptography; it works as a database of all the exchanges that happened between its users since its creation. Now, this database is not centralised; it’s actually replicated multiple times and in real time all over the network. Which means that blockchains are secure by design: instead of one central server, a multitude of servers detain the information on the transactions, making it virtually impossible to hack.

A multi-field revolution

Blockchain is set to revolutionise quite a few sectors, from energy transactions to online voting, money transfers, banking, insurance, contracts, etc. But it also has great potential in the realm of mobility. To this day, the most famous innovation in that field is called La’Zooz : an Israeli start-up offering a decentralised carpooling service, entirely owned by its community. Contributing to the service (whether you are a driver, a passenger, or a developer for the app) earns you tokens that are stocked on a blockchain and can be used to order a ride. There are several advantages to building a Decentralised Autonomous Organization (DAO) like La’Zooz, compared to what classic carpooling, car-sharing or private hire platforms offer. First, the “fair share” system permitted by the use of tokens ensures that all the users and stakeholders of the service benefit equitably from it. Secondly, the absence of a central platform makes for cheaper rides: the users “work” in their best interest rather than enriching a private company. Thirdly, it protects the users’ data and increases trust all around, which is paramount to the collaborative economy.

From car-sharing to electric charging stations

La’Zooz is not the only initiative to harness these strengths. EY (Ernst & Young) recently announced the creation of Tesseract, a platform that enables companies and groups of individuals to share the use of a car, while payment and insurances are handled through the blockchain. Institute for Technological Research SystemX is working with French local authorities on a system to remunerate carpooling drivers with tokens they can use to rent a bike or ride the public transportation system — an interesting perspective for intermodality. Start-up Pack’n’Drive has developed the Chainly project to allow connected car drivers to easily and safely declare damages. In Germany, the Share and Charge network allows private individuals to install a charging station for electric cars in front of their home, which can be used by anyone at a rate they fix. The owner of the station is remunerated with tokens that can be spent at another charging station or converted to euros.

The future of autonomous cars

In the near future, blockchain-based mobility services will most likely develop around autonomous cars. The Toyota Research Institute has partnered with the MIT MediaLab and four companies to test the opportunities of blockchain for the automobile industry. One of the projects consists of sharing the data gathered by connected cars and through tests on autonomous cars, which will help build safe and reliable self-driving vehicles. Then, once these vehicles are available to the public — most likely through car-sharing or private hire platforms –, the blockchain technology could allow to form peer-to-peer sharing platforms. The cars would communicate among themselves and with the users, and smart contracts, insurance and payments would be handled through the blockchain.

These are still the early days of the blockchain revolution, but one thing is certain: in the field of mobility, the technology will divert value creation from monopolistic platforms and give more power to groups of users. That sounds about right.