Blockchain, bitcoin, cryptocurrencies: it’s hard to unpick what’s what when we talk ‘crypto’, especially within the wider context of the business landscape.
Bitcoin is the obvious success story of Blockchain, and the trend of the moment, but use-cases go far beyond the currency.
But what exactly is Blockchain, how does it connect to business, and will it affect the taxi industry?
What exactly is Blockchain?
Blockchain is a decentralised (i.e. the ‘control’ belongs to multiple people instead of one), distributed ledger technology that allows information to be stored digitally. Information – essentially, any sort of data – is stored in a series of linked records called blocks. These blocks are strung together securely, like links in a chain.
Each transaction (for example adding, removing, or changing information around a cab booking) is carried out by multiple people using the system, so the power of the Blockchain is distributed throughout the chain, and not singularly owned by one person or group of people.
Since each block is linked to the last, it’s also easy to see where the chain has been broken, interfered with, or changed, which makes it simple to ensure that the information stored in each block is secure.
For many people, Blockchain is one of the most exciting recent developments in tech, as it allows information to flow directly between users, without middlemen or intermediaries.
On a hypothetical level, it’s impressive. It has lots of potential benefits beyond its immediate transparency – it could also help to reduce fraud because every transaction would be recorded and distributed on a public ledger for all to see. Its cheerleaders include Bill Gates and Richard Branson, and banks and insurance companies are eager to see how they can put the technology to use.
So, in the future, could Blockchain be called into play for cab companies – and what might that look like?
Blockchain and taxis
The cab industry has been disrupted on a massive scale with apps, TNCs, and digital fleet management – and it’s ripe for further disruption.
That future disruption could come in the form of a decentralised cab system, set up using a Blockchain.
The base principle will be the same: a customer books a cab; the cab picks up and drops off the customer; the customer pays.
Users of the service would interact directly with an app, as will the providers – in this case, the cab drivers. Users will pay in a specifically-created cryptocurrency (like Bitcoin). It’s not wildly dissimilar to current e-hailing systems or TNCs.
From a user perspective, booking a cab will involve using a debit or credit card to buy cryptocurrency tokens and paying for the journey with that.
The difference is that algorithms and programmes will determine all the details such as where the cars go, what time, and the driver ratings. The driver will receive this algorithmically-generated data via an app and they’ll be paid automatically in the cryptocurrency, which can then be exchanged back into more traditional money forms.
Looking to the future of Blockchain and taxis
Several Blockchain-based taxi apps are in the pipeline. Chen Weixing, the ride-hailing veteran and owner of Chinese company Didi Chuxing, has a yet-unnamed version in the pipeline. Tomas Pelecka’s start-up A2B Taxi is another challenger with the goal of launching, “one system for taxi services across 46 European cities.”
Working examples are currently more pared down: rather than being built or maintained on Blockchain, taxi companies are instead facilitating payment through cryptocurrency and apps. In Rome, users can use a service called Chainside to book a taxi and pay for it with Bitcoin. In the rest of Italy, customers can pay for their taxi ride in advance with ItTaxi, a payment platform. Uber also uses Bitcoin in Argentina.
Travelling internationally is one of the core assets of the decentralised tech: Blockchain-powered services eliminate currency conversions as the value of the token remains the same everywhere.
What are the benefits?
Chen Weixing, recently commented, “Ride-hailing is the first time Blockchain will be tested on a social application on mass scale.” This is no idle chatter: Didi Chuxing is valued at nearly US$60 billion and is seeking an IPO at an even higher valuation.
For users, it’s possible that Blockchain may produce a seamless, app-based taxi service, with friendly drivers who have a reputation for reliability. For drivers, it could produce a steady, self-managed source of income with a generous share of profits. Everything else would be managed by the algorithms and stored in the Blockchain.
But what are the drawbacks?
Ultimately, the democratic nature of Blockchain is both its biggest strength and greatest weakness.
What happens with no regulator to make sure the system remains fair? Or even more drastically, what happens if one of the ‘higher-ups’ chooses to pull the plug on the framework entirely? With no leader, there’ll be no fall-back or fail-safe.
A Blockchain may also not be the safest option. The technology operates as a push-based settlement system so that the individual holds power over the resource (for example, payment). If a transaction goes wrong after it has been verified on the Blockchain, it can only be undone if both parties agree to reverse it.
Customers could refuse to pay or drivers (who may be entirely unregulated in a given hypothetical) could accept and abandon jobs halfway through.
Indeed, the safety issues are a big plus point for traditional cab companies, especially those using iCabbi to meet regulatory needs.
But that’s not to say that cab companies don’t have something to learn from the emerging tech, as it represents an opportunity for them to embrace digital fleet management, customer and driver apps, and automated systems, such as those offered by iCabbi, to truly compete in a digitally-disrupted age.
‘Bitcoin-mania’ might rise and fall, but the Blockchain technology underlying it all is here to stay. The lesson to be learned is that cab companies should take the opportunity to change and grow to secure their futures.
Want to ensure the future of your taxi business in an increasingly uncertain market?
iCabbi can help you to succeed. Get in touch today to find out more, or to book a demo.