Crypto-Mobility — The Mobility gets decentral
Crypto currencies penetrate a wide variety of industries — the technology does not skip the mobility industry either.
Sharing services, Mobility as a Service (MaaS) and autonomous vehicles are becoming more and more present in mobility. For example, up to 15% of new cars are expected to be fully autonomous by 2030 and the MaaS market is expected to be worth $9.2 trillion.
To check, book and pay for all transport options via MaaS-platforms, it is necessary to integrate the ecosystems of all involved mobility providers. If this is done, large amounts of data are generated and exchanged on platforms. Moreover, a large number of transactions have to be executed between the stakeholders, including the user.
The aspect of autonomy also places new demands on the digital world, particularly in light of the essential machine-to-machine communication (M2M). In this context, payment transactions, which are automatically executed on the basis of Smart Contracts when a specified condition is fulfilled, are indispensable.
Distributed Ledger Technologies (DLT), to which blockchain like Bitcoin and Ethereum belong as well as Tangle technologies like IOTA, seem to offer a solution. The benefits of crypto technologies go beyond enabling digital currencies. They can also be applied to areas such as retail, leasing, supply chain, smart manufacturing, mobility solutions, connected living and IoT.
Why Distributed Ledger Technology?
DLT offers a unique set of advancements over existing technologies. These features help to reduce the current barriers and concerns about digitalization in the mobility industry and in addition optimize processes. A key factor of this is the transparency of all data that is documented in real time. This comprehensible insight into their data gives the users a sense of security. Moreover, the trust between all parties involved in the mobility ecosystem is strengthened. Furthermore the access to reliable real-time data can help the transport providers to better utilize their fleet and drive profitability.
Another key feature of the technology is the immutable and decentralized data saving on decentralized servers. This results in a high level of data security. The encrypted data is almost immune to manipulation by hacking and therefore well suited for secure digital payments and identity management. Due to the decentralized system, the participants can also interact directly with each other, so that superfluous processes and intermediaries can be dispensed with. This accelerates processes and transactions.
With regard to the exact use of cryptocurrencies, there are several possible use cases, some of which have already been tried and initiated in reality.
Mobility Platforms:
The platforms of sharing service providers, shared autonomous car systems and other transport service providers, such as public transport, can be simplified and improved through a trusted and secure environment. The ride sharing company La’Zooz has been an example of the use of a decentralized platform since 2015. A common MaaS network could also be implemented more easily in this way, since on the one hand trust between the parties can be created through transparency and on the other hand contractual aspects between the parties can be facilitated and automated. For example, the open source network The Internet of Mobility (IoMob), founded in 2017, enables direct access to and booking of mobility services and modes of transport with integrated payment.
Data Markets:
The data collected by the Connected Car e.g. routes, drivers and vehicles are of a strategic and planning value for OEMs, service providers and cities. Customers could therefore exchange their data for tokens in order to reduce their mobility costs. The Jaguar-backed blockchain startup DOVU has adopted this concept and developed an Ethereum-based secure market platform. Blockchain or Tangle could also provide a data exchange platform for autonomous vehicles that can process a large, aggregated amount of data from autonomous cars.
Payment:
Contactless payment systems in public transport can be realized with automated payment through DLT. In addition, an integrated wallet enables self-driving vehicles to process automatic payments through smart contracts. The fulfillment of programmed contract conditions triggers an automatic payment. Oaken Innovation tested this approach with test vehicles and showed how the M2M communication can be automated by Ethereum and smart contracts at a toll station.
Infrastructure Sharing:
An open ecosystem of all charging providers and their stations would remove the barriers for many consumers using an electric vehicle. This is due the need for different accounts for using charging stations from different providers would be eliminated with a single system. The use of unused, private charging stations could also be integrated. Motionwerk realized the Share&Charge project in 2017: a blockchain-based network for charging stations and electric cars that makes it possible to find a station independently of the provider. This eliminates the widespread concern that the range is not sufficient and at the same time the problem that private charging stations are not working to capacity.
Self-owning Vehicle:
The vehicle has an accounting identity and can form its own financial unit. This means that payment processes are no longer a burden for the user, especially with regard to fleet cars. Instead of owning a car, the purchase of shares in a vehicle is an alternative. This can be achieved via a Decentralized Autonomous Organization (DAO), which only functions via algorithms and smart contracts and fulfills the processes of a normal organization without resorting to people. In the end, the shareholders of the vehicle benefit from the income generated by the vehicle, e.g. through car sharing.
Vehicle Tracking:
Clarity about the vehicle information reduces the risk in the area of service offerings. The collected data can be used for analytics and monitoring of consumer behavior in the leasing, rental car and service sectors. This creates security for service providers.
Temporary Vehicle Functions:
Distributed Ledger technology also allows certain vehicle functions or infotainment offerings to be activated for a limited period of time only. This pay-per-use model allows the user to use and pay for a service only when needed, without the need for complicated and time-consuming subscription and cancellation tasks.
Usage-based Insurance:
Just like the temporary vehicle functions, special insurance benefits can be claimed briefly for a certain period of time. Depending on the real-time risk, e.g. depending on the route or the environment, smart contracts can be used to activate certain insurance clauses. In addition, the vehicle’s telematics data can be used to analyze the user’s driving behavior, i.e. how anticipatory and sustainable he drives. The insurance rate is based on this user behavior. Furthermore, the insurance profile is not linked to the vehicle, but to the driver. If the driver changes vehicles, she simply takes her rate with her.
Insurance Claim Processing:
By using smart contracts, it is possible to automatically detect when insurance claims have been met, automatically contacting technicians and performing payouts. Telematics data make it possible to easily identify the cause of a breakdown or accident and, consequently, the person responsible. This significantly reduces the risk of insurance fraud.
Maintenance:
The recording of vehicle history, maintenance, repair and telematics data with decentralized technology simplifies the prediction of necessary repairs. The customer can then be contacted to make an appointment, suitable technicians can be authenticated, and the payment process can be completed automatically.
Supply Chain Management:
Each part of the vehicle has a digital ID that contains key data regarding the stages of manufacture, such as the date of manufacture and other possession-related information. Which vehicle part is the reason for a breakdown and who was responsible for it can be tracked via the blockchain. The ID can also be used to combat counterfeits in the supply chain.
Smart Manufacturing:
Smart Prognostics of demand based on documented data can help in an on-demand production. It also facilitates supply chain traceability and inventory management. The Genesis of Things platform enables users to print their products on a 3D printer without the need for additional specialists. Smart Contracts can be used to regulate and automate access, logistics and payment.
Automotive Title Transfer:
The transfer of ownership when selling a vehicle involves numerous phases and intermediaries. Distributed Ledger Technologies can be used to simplify these processes, such as authentication and verification, through the “Chain of Title” that records the previous ownership/leasing customers/etc. The blockchain database BigchainDB worked in collaboration with Volkswagen Financial Service on the use case Car Pass. A vehicle passport that stores all historical data about the car in a shared and transparent database.
The first approaches
OEMs are already getting closer to the blockchain and IOTA future. The R3 CEV Consortium, which host mainly financial entities such as banks and trade associations, has been joined by RCI BANK of the Renault Group and Toyota Financial Services. The Toyota Research Institute also deals with Distributed Ledger Technology for e.g. car share transactions and usage-based insurance in the field of autonomous driving. In 2017, Daimler Financial Services purchased PayCash Europe in order to integrate cryptocurrency into its services, such as Mercedes Pay. ZF and Innogy have also jointly developed a blockchain-based car eWallet to handle online payments.
In addition, Bosch offers the option of selling collected vehicle data via the IOTA Data Marketplace with encrypted peer-to-peer transmission. Besides Bosch, Volkswagen is also collaborating with IOTA and testing various possible applications. Work on using crypto currencies can therefore be observed at car manufacturers.
Not only in the vehicle market, but also in the mobility sector in general, there are some platforms and organizations that have the goal to push the establishment of DLT. Thus, the Mobility Open Blockchain Initiative (MOBI) is a non-profit consortium that aims to disseminate standards in cooperation with governments and partners such as BMW, Bosch, IBM, GM, ZF and IOTA. Motionwerk also supports Distributed Ledgers for platforms that network means of transport through its services.
Implementation is challenging
Some technical, economic and regulatory challenges arise during implementation. It has already become apparent that many OEMs and other companies are doing their own thing without coordinating. The variety of stand-alone solutions prevent the quick establishment of standards in Car2X communication. However, standardization is of paramount importance. Integration into existing systems is also a challenging factor, as existing capacities cannot always cope with the new requirements. In addition, online functionality is currently a prerequisite. This represents a problem aspect, since the functions must also be able to be executed in an offline environment.
Economic challenges are on the one hand the fluctuation of the crypto currency, which does not guarantee stability. On the other hand, all parties should adapt DLT in order to achieve an optimally networked ecosystem.
Achieving this could turn out to be difficult, since in many companies a paradigm shift must first take place — from competitive thinking to collaboration and data sharing.
Regulatory problems arise from the fact that different regulatory systems are involved depending on the region and, in addition, the EU directive limits the possibilities, since it must be possible to delete personal data. However, this is not feasible under DLT due to its permanence.
In order to turn the idealistic idea into reality, all those involved, including governments, must pull from the same rope and establish a standard and regulations together.
Nevertheless, a positive future is expected for Distributed Ledger Technologies.
Blockchain technology is expected to increase in the following years, especially after 2020, in the use of commercial vehicles and is expected to form one of the cross-industry foundations of digitization.
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Sources: McKinsey & Company, Frost & Sullivan, Statista
