How blockchain can solve the problems of delivery and shared ride applications — 2 of 2
By Matheus Darós Pagani
CEO of 4CADIA Foundation
Article originally published on LinkedIn
In the last article, I talked about how blockchain can be an excellent alternative to solve the current problems involving shared hitchhiking and delivery application companies. This technology can provide the creation of free market environments between deliverers/drivers and customers, without the need for the intermediation of large companies, providing a more reliable, secure, transparent and profitable service for all involved.
The good news is that such solutions are already being developed in some countries of the world. What seemed like a distant dream is already a reality. Soon, we may see new disruptive innovations in these markets.
Decent payments
The complaint of drivers and delivery companies of application about the amounts paid per race has correspondence with reality and many companies perceived in this pain an opportunity to do business. A MIT survey of 1,100 Uber and Lift drivers found that they took home an average of $3.37 per working hour daily, after discounting current expenses.
In comparative terms, half of the drivers surveyed earned less than half the minimum wage in their state. To make matters worse, the drivers live in the dark on the percentage charged by the companies per race, which sometimes are divided by 50% between provider and company. In recent years, some projects have emerged with the aim of offering blockchain-based services, which mitigate the high costs with intermediaries. This is the case, for example, of the RideCoin, DACSEE, Arcade City and Chasyr projects.
Safer races
In China, Andy Chen Weixing, the founder of Kuaidi Dache, decided to return to the shared hitchhiking market after his former company merged with a major competitor called Didi Chuxing. This is because the company has been strongly criticized for the insecurity of the service since the second passenger was murdered in three months. Thus, Weixing decided to launch an application to conquer this slice of dissatisfied customers, betting on blockchain.
The VV Go application bets on the improvement of drivers’ income, as well as their and passengers’ safety. The blockchain-based travel sharing platform will distribute information between drivers and customers within the network. To ensure security, the entire network will be informed in case a passenger sends a distress call. This will allow other drivers or police officers to respond quickly.
Blockchain technology will allow greater transparency and access to passenger and driver records in a ride-sharing service. It also allows audits of the history of transactions on the part of authorities. VV Go uses algorithms to send requests in a way that works better for clients and drivers. VV Share will give tokens for use in VV Go as well as other on-demand services that are currently being developed by the company. The bet is that by giving drivers and customers control and participation over the blockchain, security will become a collective asset, guaranteed by the network as a whole. The expectation around VV Go is that it will serve as an example for the construction of a shared economy in China, radically changing the way business is done.
Challenges
The direction of investments indicates that the initiatives promise to produce scalable results very soon. By the end of 2019, for example, Singapore-based MVL announced that it had raised $5 million in its Series A financing round led by venture capital firm South Koran SV Investment. MVL has a flagship product called TADA, a blockchain-based transportation service.
Of course the move will require investment in marketing, capable of shaking the status quo of application giants, for customers and service providers to migrate from application. . The advantages for all parties involved are undeniable, but the change to a better technology may take longer than it seems.
Perhaps governments concerned with providing an answer to the emerging conflict involving drivers, deliverers and large companies could lend a hand, making room for the market to organize itself without interference or distortion. Blockchain technology is here to stay, and soon the new companies that know how to take advantage of the right moment will be enjoying new markets, as it happened with the internet in the last decades.
