Over the years, digital advancements have revolutionized our world and daily lives. Amazing tools and resources are invented to put useful information at fingerprints, and also, they have made our life easier, faster, better, and more fun. Among them, Ridesharing apps are eminent, and the industry is enriched for opportunities. Mostly, the daily commuters prefer to utilize ride-sharing cabs to travel since they have fast, easy, and convenient cab services. However, the industry has challenges too. Currently, most ride-sharing apps are worked in a centralized manner. Ridesharing service providers face many disputes in services management since centralized control is not effective for a highly scalable business.
Blockchain is considered the highest security system having admiring features and huge potential to redefine every business. It could benefit many industries, including supply chain, real estate, education, real estate, finance. Now, it comes to the ridesharing business too. It helps ride-sharing services providers and it could open up a lot of fruitful opportunities to grow their business and enable hassle-free business operations.
Let’s dive into the blog to grab interesting insights about blockchain impacts in the ride-sharing business.
Working Model of Current Ridesharing System
Before getting into a blockchain-based ride-sharing system, let’s look into a basic understanding of the current working model.
The present ride-sharing apps are working in a centralized way. There is no direct dealing between driver and passenger. It leads to many disputes in the ride-sharing business and also affects the participants involved. Let’s see how it works.
- When the commuter books a cab through the app, the notification is sent to the service provider.
- The company will assign a specific car and driver to the commuter and also notify them clearly about the details of the driver, car, and price of the ride.
- Once the ride is completed, the company will notify the payment of commuter and he needs to pay the ride amount that was shown in the app.
- In th end, the service provider will take some commissions and offer some money to the driver as payment.
What are the Issues Involved in the Current Ridesharing business?
While understanding the working model, you may notice some challenges. Here, let’s discuss them in detail.
Cumbersome Manual Process
When you have previous cab travel experience, you may know that there were no direct dealings between commuter and driver. It leads to heavy work for the service providers. A lot of manual processes are involved in assigning the ride and allocate the payment. It might be laborious, cumbersome, and not efficient. Also, this system could not be effective when the different commuters putting requests simultaneously.
Lack of Security
The centralized working model of ride-sharing businesses has security loopholes that pave the way for fraudulent activities. There will be no proper security mechanisms to take care of the safety of drivers and passengers. A KYC process is not efficient, and it could cause security-related concerns.
An extensive manual process can lead to inaccurate results. Sometimes you may experience the display of the wrong route, high fares for small distances, mismatch of car & driver details, location not detected. All these concerns show the poor management of the current system.
There will be no transparency in the ride-sharing process. A commuter can not know the full details of the ride. If the company will raise money suddenly, the commuter can not understand why there is a sudden surge in the price. To solve these conflicts, they need to contact customer support, and then they might get relevant solutions.
High Transaction Costs
A centralized ride-sharing business allows service providers to spend huge money on intermediaries involved in ride management works. So, they will fix the higher price for a ride, which could automatically affect the passenger.This makes customers decide to move on low-cost options.
With the large cumbersome process, the commuter and drivers are not able to connect easily. The third-party intermediaries are involved in facilitating the approval for assigning the ride. It takes such a long time and makes the process inefficient. Passengers can’t wait for a long time, so they have decided to go further with an alternative way. The service providers may get a chance to lose their loyal customers since they are not able to provide convenient customer service.
Data Privacy Issues
There will be no efficient mechanisms to protect the passenger and drivers’ data privacy in the current system. It can lead to fraudulent activities and affect the company reliability and trustworthiness. Also, in a centralized model, there could be a single point of failure. The company can even lose its loyal customers and profits. Passengers are also getting affected even they had a chance to missed their reward points.
What is blockchain?
Blockchain is a distributed, decentralized ledger technology that gathers and stores data across different places in an immutable, decentralized and secure way. It uses a consensus protocol to ensure security in all transactions and prevents all fraudulent activities.
Cryptocurrencies have underlying blockchain technology to facilitate secure, fast, and reliable payments. The popularity of bitcoin and ethereum can show the massive adoption of blockchain technology in the financial sector. The Blockchain is extent beyond cryptocurrency, and it could have a wide range of usecases in different industries, including education, supply chain, digital identity, healthcare, ecommerce.
Blockchain Solutions to Ride-Sharing Business
Adopting blockchain in ride-sharing businesses could enable a customer-oriented business model. Next-gen blockchain technology helps to overcome all the challenges and could facilitate a stunning user experience.
Let’s dive into it.
Automated Smart contracts
In a blockchain-based rideshare app, the smart contracts are triggered to execute all business operations. There were no time delays and high transaction costs required for every ride. All the business operations can be streamlined, error-free, and efficient. It could eliminate intermediaries’ participation and reduce manual efforts, cumbersome processes.
Blockchain is the highest security technology that helps cab service providers to enable secure business operations without losing data privacy. A decentalized blockchain ledger keeps on recording about every ride and stores it across different places to ensure security. Smart digital ID verification can help scams at the entry-level and prevent all fraudulent activities before getting worse.
With the help of automated smart contracts, the business operations become more transparent, flawless, and hack-free. Once the commuters start the ride, the information is open to a blockchain network that connects with all participants including service providers, drivers, and other employees. Any changes occur, the notifications will be sent to all blockchain participants. It could help to ensure the safety of drivers and passengers.
Low Transaction Costs
By adopting blockchain in the ride-sharing systems, there will be no need for middlemen intervention to facilitate business operations since automated smart contracts could execute the operations. It connects the driver and passengers easily. Also, it helps to carry out business deals directly. Huge transaction costs spend on the intermediary process are reduced, which automatically reflect the commuter ride price. It could enable a huge cost savings approach.
High Data Privacy
Blockchain is distributed ledger that stores the data in an immutable, encrypted, secure, and verifiable manner. Every registered user has full control over the data maintenance. There is no possibility for data leakage, data hacking, and data loss. It is highly secure and helps users to travel safer by accessing verified services.
Automated smart contracts implementation can help to improve business efficiency. It performs automatic quality checks at regular intervals to make sure all the business process is efficient, flawless and secure. If they find lagging points, it could be immediately notified to the business providers and make it clear and hassle-free.
Overview of Blockchain-Based Ride Sharing Business:
Let’s look at the workflow of the blockchain rideshare model for better understanding,
Blockchain-based Ride Sharing Workflow:
- When the commuter requests a ride with customized information like a number of seats needed, car type, traveling time.
- The smart contract will be triggered and assigns automatically the customized ride for passengers with a verified driver who is located nearly as possible to come.
- Once it finishes, the price and traveling time will be notified to them individually.
- When the commuter and driver accept the ride, they are ready to start the ride. If anyone is not satisfied with the ride, they can request another ride.
- Once the ride is completed, the commuter needs to pay directly to the driver without a large process.
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Advantages of Blockchain-Based Ride Share Apps Launching:
Blockchain has the high potential to rejuvenate the ride-sharing industry. Let’s scrutinize the advantages of blockchain in the ride-sharing business here,
- Easy business operations
- High-level Security
- Cost-Efficient Approach
- Transparent business
- Direct payments
- Cryptocurrency adoption
- Smart rewards system
Moreover, the blockchain has endless promising opportunities to improve the ride-sharing business.
You may just now wonder about the advantages of blockchain in the Ridesharing industry. A blockchain-based ride-sharing app could allow smart contracts to make business operations streamline, secure, and efficient. It renders heaps of promising business opportunities to ride-sharing providers and helps to get rid of all clustered challenges in managing ride-sharing services.
Thus the adoption of blockchain clearly shows that blockchain-based ride-sharing apps will be the future. So, be early adopters to utilize blockchain development to move forward your ride-sharing business and stay ahead of your competitors!