Green light on the green way: driving mobility to the future with blockchain
“Don’t find fault, find a remedy” — a quote often attributed to Henry Ford. Indeed, cars were originally conceived as the solution to inefficient mobility in the industrial age. In today’s post-industrial world, however, the automotive industry is being transformed by a number of trends. When the dust settles, this change will be as significant as our transition from horses to automobiles.
Whereas the future of electric vehicles seemed to be uncertain even a couple of decades ago, today there is a consensus about a coming mass changeover to electric vehicles (EV), pioneered by new players such as Tesla or Lucid Motors, established industry giants such as Ford or Volkswagen, and luxury carmakers such as BMW or Mercedes-Benz. Electric vehicles (EVs) are an increasingly common sight on our roads and adoption is set to rapidly accelerate in the coming decade.
One of the key drivers of adoption is environmental regulation. For example, the European Union declared that at least 30 million electric vehicles should be rolling onto the roads of the continent by 2030 (which would be roughly equivalent to 10% of all vehicles, based on current figures). According to Bloomberg New Energy Finance, the EV-share of the entire global car market is likely to reach 60% by 2040.
Green, seamless, shared
Due to congestion and pollution, governments and lawmakers around the world are seeking to greatly reduce the number of cars in urban areas. In the UK, for instance, the government’s Decarbonising Transport proposals foresee a gradual transition from cars to public transport and clean energy.
The increasing popularity of ride sharing may signal a shift in consumer orientation: according to BusinessWire, the sector is poised to grow at a rate of almost 20% until 2026. In big cities, the future of urban mobility is likely to encompass a broader use of EVs, including ride-sharing, microcars and public transport. Mobility-as-a-service (MaaS) promises to give users on-demand, convenient access to transportation, combining various services at the push of a button.
Looking a bit further into the future, the deployment of autonomous, connected, electric, shared (ACES) vehicles could help to ensure that vehicles spend more time on the road. Instead of owning a car that spends 95% of the time in a parking lot, you could simply hail a self-driving car to your doorstep. Each large urban area could have fleets of these vehicles, similar to bike-rental schemes popular in many cities today.
Each of these visions of on-demand mobility introduces an aspect of social and economic coordination that was not an issue when individuals could be mapped to their own cars. In particular, the total cost of transportation (including tolls, parking, electric charging) will no longer be associated with a single vehicle, but disaggregated into payments associated with an individual.
Furthermore, the auto industry is focused on redefining the user experience by providing new ways to enjoy the journey, providing opportunities to make more consumer purchases in transit.
Keep on chasing payments
Most discussions about how blockchain technology may be used in the future revolve around payments, and future mobility-on-demand is no different, where integrating payments is essential for creating a convenient service.
The future fleet of electric vehicles will require extensive charging infrastructure and convenient payment options. The MOBI consortium has developed the idea of vehicle identities, enabling cars to pay road tolls or congestion charges on the fly, without human intervention. Payments at a charging station, however, are more difficult to solve.
The point-of-sale (POS) use of credit cards is an insecure method of transacting: according to cybersecurity experts, millions of POS devices of the top two manufacturers have been affected by vulnerabilities that potentially exposed credit card information. And even when payment terminals are not compromised, using a payment intermediary such as a credit card clearinghouse incurs hefty charges. For instance, American Express charges processing fees up to 3.5% on each transaction.
Seamless payments, however, are not only relevant for settling transactions related to the journey, but also for making the trip more pleasant and entertaining. In the US, drivers spend about 160 million hours in traffic every day. It’s a lot of time wasted on staring through the windshield, especially as autonomous vehicles will free up attention now dedicated to driving. In fact, manufacturers have been working hard to develop a vast array of infotainment and in-transit shopping services.
Personal entertainment, for instance, is guaranteed even in a shared ride, as you can privately listen to your favorite gangster rap in a personal audio zone. On the way home you could choose from restaurants on an augmented reality (AR) screen, order your meal with the voice-activated control system, and have your dinner delivered on the curbside as you arrive.
According to Deloitte, passenger time in vehicles converted only in consuming media content will reach 52 billion hours annually by 2030, doubling today’s figure.
Naturally, the above-mentioned payment hurdles apply for the domain of infotainment as well. However, here another key question arises: the moment you share vehicle ownership, what you do in your car will no longer stay between you and your car. Indeed, it may be uncomfortable to know that the next passenger may see your four hours of angry gangster rap in the streaming history. In fact, passengers of car sharing services are likely to demand a securely private way of using and paying for infotainment experience.
Distributed ledger technology promises to disintermediate payments, eliminating middlemen that pose security risks and skim off transactions. However, the volatility of transaction fees remains an obstacle on some of the largest existing blockchain networks. For example, the cost of payments on Ethereum has been well above $10 for most of this year — which would be clearly too high a fee to simply process a car-charging transaction. In addition, swings in the value of popular cryptocurrencies are too wide for most everyday transactions to be feasible. To fulfill its promise as a reliable method for regular payments, blockchain technology must keep transaction costs reliably low.
Another issue is the limited scalability of existing solutions. Ethereum, for instance, handles an average of roughly 19 transactions per second currently. And while deploying side chains may improve scalability, such methods usually involve compromises in terms of security or transparency, both necessary ingredients of reliable mobility systems. In addition, even though the immutable ledger offers superior data security compared to third-party cloud storage, with the passage of time popular blockchains will be increasingly exposed to well-funded cyberattacks.
Therefore, to realise the vision in which fleets of self-driving, shared EVs autonomously perform multiple transactions during their journeys, blockchain technology needs to be both highly scalable and unshakably secure.
A new lane for blockchain?
At Geeq, we have been working hard to resolve the challenges discussed above, so that blockchain may finally handle a massive volume of payments of high granularity at a low cost. At the same time, we aim to provide increased security and more privacy compared to traditional financial clearinghouses.
As Geeq makes it easier for consumers to keep control of their payments in every situation, we align incentives across the ecosystem: consumers may
share their rides, while manufacturers can develop more options and do good at the same time by making vehicles and cities sustainable.
The auto industry and its related sectors are well into the innovation cycle, not only reimagining customer experience so that it includes in-transit services for connected vehicles, but also anticipating how rights and responsibilities of ownership, maintenance, and compliance with new environmental regulations will be redrawn in the era of autonomous vehicles.
Of course, Geeq is just a part of a grand solution: stakeholders across the automotive industry need to join forces to pave the way for blockchain. Nevertheless, we are excited to play our important role in pursuing a new, sustainable vision of mobility.
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