Peer-to-peer car sharing: avoiding the hidden risks

Economical, accessible and private, car sharing is fast-becoming a popular means of getting around comfortably, for those who find it more convenient to borrow a car rather than own one. In fact, 6 million individuals are already using communal cars and that figure will top 18 billion by 2025.

But for peer-to-peer car sharing to become a reality, a secure solution is necessary to protect users from payment fraud and ensure their cars are not damaged or stolen.The best answer is a mix of connectivityand immutable blockchainsecurity.

Processing payments safely

Fundamentally, peer-to-peer car sharing is a business deal made between strangers. This has many benefits, such as flexibility and autonomy, but its impersonal and informal nature can create opportunities for fraud. Soto keep transactions secure, an incorruptible processing method is vital — which is exactly what blockchain provides.

Originally designed as a secure “trustless” solution for transferring Bitcoin, without the need for a “trusted” intermediary,blockchain verifies digital transactions using a decentralized network ofcomputers and stores them as encrypted blocks of data. Its core security lies in the fact that trust and control is devolved: all computers in the network can see and must validate transactions before they are added, and approve any alterations.

In the context of car sharing, this means blockchain can prevent payment fraud. With no single point of power over the network or weakness, sensitive data — such as deal terms and financial details — can’t be corrupted or stolen. Plus, by using a blockchain platform, individuals can cut out costly middlemen while staying safe. It’s therefore well-suited to individuals and businesses transacting in the car sharing economy, where verifying credentials can be particularly useful in large-scale sharing.

Ensuring asset security

For car owners, the incentive to enter the sharing market is clear: by leasing their asset when not in use they can make money. And this model has been shown to drive great results, with the apartment rental version capable of generating up to $144,000 annually. Yet it’s also important to recognize that handing over a valuable asset is inherently risky. Not only could property be damaged without record — leaving the owner to pick up the repair bills — but it may also be lost completely.

Owners must therefore keep close tabs on their assets by utilizing the security advantages of the distributed network blockchain technology offers, as well as harnesses the insightsgenerated by data gathered from large connected networks.The next few years are set to bring a rapid increase in vehicles equipped with 5G LTW WiFi and,in the meantime, they can connect tothe web via dongles such as the Onboard Diagnostic II (ODB II) and 4G. These developments allow owners to remotely monitor vehicles using GPS location tracking, thereby protecting them against unfair claims and enabling faster recovery if theft occurs.

Car owners may also wish to monitor driving behavior to predict maintenance issues, for example, large data sets collected in the network could help provide insights into upcoming issues the car may suffer. In turn, they can combine this with contextual data such as frequency and weather conditions to optimize servicing, which may be especially useful in large car fleets. For rental businesses, this behavioral information may be useful in improving marketing: whether it’s calculating a tailored quote for insurance for an individual, or helping drivers find nearby services, such as fuelling stations or hotels.

Overall, peer-to-peer car sharing brings many advantages for borrowers and lenders alike. But hidden risks could stall market progressif left unaddressed. To keep driving forward, solutions are needed to ensure the security of users’ data and vehicles­– and the best solution is a mixture of improved connectivity and immutable blockchain security.