Urban public transportation will become increasingly complex and crowded in the future, as the importance of mobility services like Uber and Lyft grows, and more companies look to leverage self-driving cars to launch autonomous ride-hailing services in cities.
This could create an opportunity for a common payment mechanism that simplifies how consumers pay for the various mobility and mass transit services they use to get around urban areas.
Cryptocurrencies leveraging distributed ledgers and loaded onto prepaid transit cards would provide just such a digital payments mechanism that consumers could use to pay for ride-hailing, bus, and subway services, while creating transparency and trust among providers of those services, Amos Haggiag, CEO and co-founder of Optibus, a startup that provides a cloud-based analytics platform for mass transit systems, recently told BI Intelligence.
Consumers could use the cryptocurrency value on their card to pay for multi-modal transportation, enabling them, for instance, to take a trip part way on mass transit and part way on a bike-sharing or ride-hailing platform, and pay for the whole trip with one transaction on one card. All those transactions would then be stored on a decentralized ledger, allowing all of the transportation providers to verify and view those transactions, and giving them valuable data into customers’ transportation habits.
Although such a decentralized approach would have important benefits for consumers and transportation companies, there are still significant barriers to enabling such cross-service transportation purchases for consumers via cryptocurrencies:
- Cryptocurrencies and the distributed ledger technology that supports them are still in very early phases of their technological development, according to Haggiag. This means that more progress needs to be made before distributed ledger technology can support mass transit systems.
- For example, Bitcoin transactions can take hours to validate, particularly when transaction volume is high, and a mass transit system would need instant validation of transactions, he explained. Other cryptocurrencies are making advances toward faster transaction validation, but more progress needs to be made.
- Additionally, the system would need to be able to validate transactions offline — something no blockchain is capable of today — in case internet access in a city faltered for any reason, so consumers would continue to be able to use the mass transit system.
Over time though, distributed ledger technology will likely overcome these challenges, and transportation providers will gain a major incentive to join together in a decentralized payments system for transportation services, Haggiag argues. That incentive will be the digital data created by the transactions stored on the chain, which could give companies unprecedented insights into how urban dwellers move about their cities. Armed with such insights, companies will be able to optimize their transportation networks for local demand, which could greatly improve their efficiency and profitability.
- Explains how firms are already exploring ways to make use of blockchain in all sorts of IoT projects.
- Provides an overview of disruption in critical sectors including the supply chain and asset management.
- Analyzes how blockchain is poised to see rapid expansion as a tool used in IoT solutions that reduce costs, increase efficiency, and remove reliance on cloud-based platforms.
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