How RedCab is creating value for the car hailing industry?
In the last years, we are observing Blockchain technology expanding to more and more industries. Starting as a technology for the financial sector, that was hardly understood and acknowledged by the mass, it is entering now industries, that directly affect our daily routine.
Everyday billions of people are relying on the car transportation to go to work, school, visit friends, family and attending events. What are their priorities when choosing a transportation method? Well, they differ from individual to individual. While developing their business idea, RedCab team had a goal to study the market in depth and to understand the different types of needs. However RedCab’s aim was not only to personalize the riders experience but to increase the benefits for all stakeholders in the process.
While reading the project description the you may ask yourself? Do we need yet another car-hailing service? And the answer is definitely YES we need it, IF it is a progress for the industry.
Then you might ask yourself, WHY is RedCab a progress for the car-hailing industry?
To answer this question, we need to understand the problem, that currently the car-hailing service is a centralized system where the owner company is taking a cut from the fare. The cuts from the fare are varying between 20–40%. To resolve this, RedCab has removed the cut. The driver will get the full 100% of the fare.
Nevertheless the company will be able to make profit. The concept is resembling a social network website. Users are benefiting from a free service (in our case cut-free service), however the profit is made by mining and analyzing customer data and provide targeted/ personalized ads (Geo-Ads). This kind of ads will increase the conversion rate and reduce the marketing costs for the local advertisers. This way we have 4 stakeholders who are better off by using the RedCab Service. Passengers save money, drivers get higher profit, advertisers reduce marketing costs and get more conversions and RedCab company has a profit which will be used for further development and support of other blockchain startups.
The second problem which we currently observe in the market is the price variation that depends on the network load. Customers need to pay much higher prices during peak-hours. This situation seems to be a logical outcome which is based of the basic economic theory of supply and demand where the driver will get an incentive in fiat to accept more rides. Blockchain can help to reduce the price fluctuations by offering the driver an incentive in tokens. This is the basic idea of Proof-of-Driving: REDC tokens will be generated and distributed to the drivers. The token generation rate will be adjusted according to the load and the number of network participants. In Proof-of-Driving, we can observe the same basic economic concept of supply and demand transferred to the blockchain system. This way the customer will save money, and the driver will still have the incentive to accept more rides.
Summing up all above, we can conclude that the RedCab project is indeed a progress for the car-hailing industry and it is creating value by resolving real life problems and bring up a concept that is profitable for everyone. Join the RedCab community and become part of the progress!
