How could Distributed Ledger Technology (DLT) and Blockchain be applied in a New Mobility context? Is there be a reasonable real world application or is it just a new buzzword bingo candidate? We’ll have a look.
DLT and Blockchain in a Nutshell
Distributed Ledger Technology (DLT) is an umbrella term for systems that synchronize identical copies of data across multiple sites. It can be seen as a specific database with copies distributed to all members of a peer-to-peer network, validated by multiple parties or “nodes” against a Smart Contract. After validation every new entry is automatically time-stamped, signed and shared across all peers.
Blockchain is the most prominent subset of DLT. It organizes its data in an “chain of blocks”. Each block contains data that is verified & validated and chained to the next block. The first record of a Blockchain is the Transaction, and the other is the Block. The block records are secured by a cryptography hash, which has information of the preceding block, which makes it immutable. A Blockchain has no central authority and is typically permissionless, i.e. open to anyone.
The primary goal of using distributed ledgers is to increase trust and reduce risk of central storage or tempering with the data via redundancy. Because of their distributed, server-less architecture Blockchain in addition is especially attractive for anonymous peer-to-peer business models.
A basic requirement for any kind of distributed ledger to become effective is the fact that all participants need to agree on a common standard. By nature mobility doesn’t stop at the boarders of a certain traffic company and often not even at the boarders of a country. As a consequence DLT for mobility requires non-proprietary, open standards on a global scale.
New mobility use cases for DLT/Blockchain technology
The most prominent use case of Blockchain technology comes from the FinTech domain: it is digital crypto currencies, such as Bitcoin, Ethereum or Ripple. If you have ever tried paying with Bitcoins, you may have realized that this is far from being an alternative to legacy currencies: transactions are expensive and take ages, there have been major fraud cases, the volatility disqualifies it as a store-of-value asset and worst of all: the so called Bitcoin Mining is extremely energy intensive. According to Digiconomist one single Bitcoin transaction causes ~350 kg CO2 emissions. From a climate protection perspective Bitcom is a nightmare and the FinTech industry needs to creatively work on alternatives. But let’s have a brief look at (potential) DLT use cases in the mobility domain.
Ticketing, Settling and Roaming
When the legendary Orient Express train service between Paris and Istanbul started in 1883 it was not just a technological but most of all an organizational master piece. It allowed passengers to travel across multiple European countries in pre-EU times with just one single ticket. Try this today almost 140 years later. It won’t work. But MaaS has the aspiration to make this work locally and internationally.
Mobility as a Service depends on the seamless integration of diverse modes of transport across companies, transportation authorities and even countries. One ticket for all and centralized billing is the promise. This can only work if all parts of the travel chain can be accessed by the party billing the passenger. A standardized distributed ledger, allowing to access just the billing-related information could solve for this.
A related use case would be the the use of DLT for roaming in intermodal travel chains. In this case transport service providers (TSP) would utilize the resources of another TSP to serve their customers. Ticketing and billing for the passenger would be performed by only one TSP. In the background the settlement between the TSPs could be based on DLT.
Electric Vehicle Charging
The ubiquitous availability of loading infrastructure is key for the success of electric vehicles (EVs). To reach the maximum density of charging points all providers need to combine their charging points as one single resource and allow customers of other providers to charge their vehicles using roaming contracts. Inductive loading points e.g. at traffic lights would take this approach even one step further. The settlement of this distributed charging is likely a classic use case for DLT.
Bi-directional Vehicle-to-Grid (V2G) charging, where cars or buffers can feed power back to the grid, help to take out peak loads, support on high demand and so stabilize the grid would extend this use case. DLT could track the power with variable prices flowing in both directions.
Another related use case would be the use of Battery-as-a-Service solutions where vehicle batteries don’t get charged in the vehicle but receive fully charged replacement batteries instead. This gets more and more common for shared electric scooters but the concept also gets a second chance for automobiles. In this case DLT could not only play a vital role in the settlement of the charging as such but also in the battery management and so increase their lifetime.
Tokenization of Vehicles
Tokenization connects the digital with the physical world. In this context it is the conversion of rights to an asset into a digital token on a distributed ledger. A token can represent a vehicle, similar to the vehicle papers. These tokens will allow for e.g. easier vehicle registration, car sharing and car rental but also support leasing and sales. It might even impede car and bike theft and allow for vehicle-centered business models.
Linking trucks or cars into a trainlike group can increase road capacity and save fuel by reducing aerodynamic drag. When platoons get created on demand using electronic coupling, all subsequent vehicles benefit from the air drag of the first vehicle such as in geese swarms or bicycle pelotons. Sharing these benefits among all vehicles in the platoon with a DLT-based tracking and settlement of these micro transactions would allow for new business models.
Traffic Control and Analysis
Traffic jams or speeding and traffic light violations could already be tracked and fined automatically using location-based services much more effectively and efficiently than with speed cameras or radar traps. But changes of this magnitude do also have a legal, political and cultural dimension and take time. Some car sharing and car insurance companies already give a sneak preview of how traffic control could look like in future. These proprietary systems with their “use-based” tariffs cause privacy concerns, which governmental DLT-based traffic control registers might be able to solve.
Another potential use case for traffic control would be the analysis of traffic patterns in order to dynamically control traffic lights and signs or long-term infrastructure planning of smart cities. Vice versa companies such as transport providers and hotels might be interested in traffic data from cities in oder to better plan their capacities for their pricing and yield management. “Data is the new gold dust” and DLT would allow to share exactly what may be shared in a controlled manner.
Driving Licence Checks
In the European Union and in some other countries companies are supposed to regularly check if their employees still have a valid driving license when they have to drive for work reasons. This should avoid risky drivers without a valid driving license to further drive with company cars. Some countries such as Germany enforce all their companies to manually check this, causing immense effort and low effectiveness (a licences checked today could be invalid tomorrow) despite the fact that they have a central register containing this information. Interestingly the UK supports such an automated solution – adhering to the same European General Data Protection Regulation (GDPR), at least by now. One of them must be wrong. A Pan-European driving license ledger with GDPR-compatible access rights could solve this, effectively increase safety and reduce stupid inefficiency at once.
Track and Trace in Logistics
Track and trace is not a new use case but legacy systems are often still paper-based and reach their limitations when goods get transported by multiple vendors. A global, open standard on based on DLT could help logistic companies to better cooperate and so make us of untapped transport efficiency potential. Even where the coronavirus pandemic has messed up global supply chains Blockchains could help.
The Coronavirus disease COVID-19 had a major impact on travel and mobility. During the peak of the pandemic the world’s air travel has almost stalled completely and the backbone of public transport got avoided wherever possible. These mass rapid transit systems pose a higher infection risk due to the close proximity of people over a longer period of time. Crowded elevators pose a similar risk. Up until there is a vaccination or cure against the virus, tracing of infection chains will be indispensable to control the spread. But even when COVID-19 will be under control, it could help to protect us from any other contagious diseases, even from the seasonal flu, which also costs up to 30,000 lives every year. DLT may play a key role with keeping track of contacts and tracing back infection chains: Countries like China, Iran, Israel, Singapore and South Korea already use coronavirus tracing apps but most of these existing apps gather location-based data and could also be used to build motion profiles for other purposes just than health reasons. This raises major privacy concerns. The European Union addresses these privacy concerns in their Pan-European Privacy-Preserving Proximity Tracing (PEPP-PT) app. Apple and Google also address these privacy concern in their Privacy-Preserving Contact Tracing approach but go even one step further and plan to integrate their jointly developed tracing functionality into their smart phone operating systems iOS and Android, which would then cover the vast majority of all smart phones. DLT could become a key enabler for re-opening public transport in the coronacrisis.
We touched just a few potential use cases and left out other interesting use cases, such as parking, tools or car pooling. DLT and Blockchain can create value and a unique proposition in use cases where trust, redundancy and traceability across multiple parties are important and micro-transactions are to be considered. Paramount will be the development of safe, open standards and sustainable business models which build on it. Several initiatives auch as the Mobility Blockchain Initiative (MOBI), Daimler’s Mobility Blockchain Platform or the Blockchain in Transport Alliance (BiTA) are driving this topic forward. Definitely a space worth watching.