How to power shared mobility startups with blockchain technology

This opinion piece by Boyd Cohen explores how a new blockchain layer for mobility could allow shared mobility startups to quickly launch their services and have immediate access to a network effect. Cohen is the co-founder of IoMob, which combines open source and blockchain technology to decentralize mobility, and the dean of research at the EADA Business School in Barcelona.

Shareable readers are well aware of the overlapping interests between the blossoming sharing economy and the need to support the urban commons and Sharing Cities. As our urban populations swell, there is growing demand for green space, housing, food, energy, jobs, cultural activities, and mobility.  

Luckily for us urban dwellers, a growing array of sharing economy projects have emerged to help, at least in some cases, reduce our resource consumption, and shift to circular and shared access models. Perhaps no part of the urban landscape has been more embraced by sharing economy entrepreneurs than mobility. And with good reason. Our cities have become all too congested and contaminated by the 70 percent of vehicles commuting as the single occupied variety. Our cities' physical infrastructures and investments have been spent on enabling personal vehicles to travel, park, and refuel (with fossil fuels for the most part), instead of allocating such precious resources to other and better uses.  

The shared mobility space is huge. We have witnessed in recent years all kinds of business models for shared mobility such as bikesharing (municipal or P2P), carsharing, carpooling, parking space sharing, shared access to EV charging stations, and more. In fact, in Barcelona alone, according to Sharemrkt there are more than 50 such shared mobility operators in the city.

The question we ask ourselves at IoMob however, is how can this growing number of shared mobility startups compete with the entrenched larger and multinational mobility companies (Uber, Cabify) and even the more benign, larger peers like Zipcar or municipally run bike-sharing schemes? The current shared mobility marketplace requires that each startup build their own underlying tech for handling payments, user registration, reputation management and the like, while also spending their scarce resources to build their brand and user base. It is an uphill battle for sure.

Blockchain technology offers a powerful alternative to this scenario by engaging a range of mobility stakeholders and an open-source set of technologies for startups. Larger companies and public transit operators — any shared mobility service operator, really — once validated as complying with local laws, could be made visible to any user who uses apps that are connected to the protocol. Instead of requiring each mobility provider to launch their own apps, the Internet of Mobility (IoM) allows for an open ecosystem of operators to share access to infrastructure and user bases. You may ask, for example, why would a larger operator be willing to share their users with a shared mobility startup? For a couple of reasons:

  1. It supports customer retention by ensuring customer needs are met.

  2. A previously established agreement between the providers — or one approved instantaneously — allows the provider offering access to their user to get some revenue based on previously agreed relationships with mobility providers. This would establish how much commission is transferred for each shared customer.

We don't believe all mobility providers will embrace an open, transparent ecosystem, at least not in the beginning. But you can imagine over time the network effect for having a range of public and private mobility services sharing users in a city.

One step towards this has already begun, and is referred to as Mobility as a Service (MaaS). MaaS models are great in that they aggregate a set of public and private mobility services in a package for residents who can pay a monthly fee for a set amount or unlimited amount of services in a given month. We embrace MaaS models, which can easily be connected to an IoM protocol, as a great improvement over existing models. Yet, blockchain and IoM allows for an even better model. Embracing open protocols and open source software, shared mobility startups and established mobility providers can share access to users and the base tech in a way that is not exclusive. MaaS models tend to be run by private companies using proprietary software and partnering with the largest mobility services in the city. This leaves little room for mobility innovation or for the startups to gain access to the local mobility market.

We have even begun envisioning how you could blend MaaS and our open IoM thinking in the following way: Any validated mobility operator could work with an open hub aggregator to develop a monthly pricing package based on each user's personal travel patterns. In this model, a new user could go to a website, either describe their travel patterns or have the system track them for a period of time, and then discover any mobility service, large or small. A drop-down menu would give users the option to pick and choose any service and see how much it would cost to add that service to a monthly package. Think of it as a Personalized Mobility as a Service (PMaaS).  

Blockchain technology poses the potential to decentralize and democratize our economies. The Internet of Mobility could significantly enhance urban mobility users' experience, while creating a vehicle for shared mobility startups to launch innovative services more rapidly and gain democratized access to urban mobility users.

Header graphic courtesy of Boyd Cohen

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