Digital Solutions & Data Responsibility
The Future of Blockchain in Mobility: Top 5 Applications
The mobility industry is undergoing a series of seismic shifts: electrification, digitalization, and automation just to name a few. Blockchain technology has the potential to redefine all elements of the mobility industry, from supply chain and logistics to smart manufacturing and the internet of things (IoT).
What is blockchain?
In simple terms, blockchain is a secure, tamperproof, and transparent digital record of transactions among multiple parties. It allows information to be recorded and distributed.
In a previous article, Fuso GreenLab gave a simple explanation of what blockchain technology is and how it works.
Read: Wonder What Blockchain Is? You’re not alone. A Simple Blockchain Explanation
Here we will focus on five areas where blockchain technology could disrupt the mobility industry.
1. Blockchain in supply chain
Auto manufacturing by its nature involves vast amounts of components. This can be in excess of 30,000 to 100,000 parts for cars and trucks. Globalization has made the supply chain incredibly complex. While information sharing between parties has advanced, “visibility remains a challenge in large supply chains involving complex transactions,” the Harvard Business Review notes.
Blockchain can be utilized for enhanced traceability in the supply chain. For instance, if a faulty component is discovered, a company can rapidly identify where the components were sourced. They can also learn which batch of vehicles has been impacted.
Furthermore, supply chain disruptions can be reduced by having key suppliers and partners share their inventory flow on a blockchain. Each participant can then make decisions based on common, complete information.
A number of top companies are already leveraging blockchain for supply chain management including Walmart, De Beers, UPS, and FedEx among others.
“[Supply chain managers] need to join efforts to develop new rules, experiment with different technologies, and conduct pilots with various blockchain platforms, and build an ecosystem with others [sic],” the Harvard Business Review concludes.
2. Preventing odometer fraud
An often-discussed application for connected vehicles is a database with blockchain for recording mileage. Even the European Parliament has identified blockchain technology as a solution for combating odometer fraud.
“The blockchain technology currently proposed by the car engineering and electronics industry would allow downloading mileage and GPS data from vehicles, and securing it on a digital logbook”, their report on odometer tampering states, noting that 10%-50% of cars traded in the second-hand market in the EU have had their odometers tampered with.
A connected vehicle could be equipped with a smart odometer that would frequently record its mileage to a blockchain, thus creating a secure digital certificate and ensuring the authenticity of the reading. Furthermore, a vehicle’s maintenance history could be included. This would provide a more accurate and complete vehicle history.
3. Auto insurance
Blockchain applications for insurance are numerous. It can be used to validate vehicle information. So, if it were integrated into a vehicle’s black box, it could allow customers to pay for insurance only when they are driving. A vehicle with an automated digital record could easily keep track of periods of use and apply rates accordingly.
This could also help resolve disputes after accidents by allowing insurance companies and authorities quick access to the car’s speed, throttle position, brake application, etc.
4. Solutions through the internet of things (IoT)
Smart automobiles are increasingly connected to the cloud in a variety of ways paving the way for a broad range of services, including toll payments, shopping, and food delivery. While convenient, this creates security challenges due to the centralized nature of a user’s vast data. However, a blockchain network of interconnected IoT devices could render the use of a central database unnecessary. It could enable accurate, immediate data transfer to take place securely via a decentralized network.
5. Peer-to-peer (P2P) shared economy & mobility
P2P service is defined by Investopedia as a decentralized platform whereby two individuals interact directly with each other, without intermediation by a third party. A shared economy in part involves short-term P2P transactions to share the use of idle assets. Blockchain can help with facilitation payments.
Since blockchain is facilitating growth in P2P by allowing users to both access and share records, it can support the mobility market. This is particularly applicable for vehicle sharing, rental, and leasing.
An article in Forbes notes that by logging user data, blockchain technology could enable insurance policies, personal settings, and preferences to be bound and unbound to the vehicle — a huge benefit in car-sharing situations.”
Not only is blockchain a key enabling technology for P2P services, but structural factors like rising urban density offer a greater user base and infrastructure for P2P mobility models by increasing potential local users, vehicle hosts, and access points.
Will the mobility industry embrace blockchain?
There are real challenges to the widespread implementation of blockchain technology in the mobility sector. Questions remain about adequate infrastructure, sustainability, and trained experts to develop blockchain solutions for mobility. That’s not even taking into account the costs of transitioning and profitability.
In a future article, Fuso GreenLab will explore the environmental and operational challenges associated with blockchain applications and the solutions being developed to tackle them.
Blockchain has the industry’s attention.
A number of corporate giants, including some of the largest auto manufacturers have joined a nonprofit consortium, MOBI, which seeks to develop standards and a digital infrastructure for connected automobiles and IoT applications.
Blockchain technology appears to be heading to a vehicle near you.
What are your experiences with blockchain? How can it best be utilized for mobility applications?
FUSO GreenLab is currently seeking collaborators to implement blockchain solutions with mobility. We are open to innovations. Submit your idea here.