Web3 could power a decentralized ride-sharing economy!

Introduction

When I look at the current ride-sharing transportation sector, I feel that it is one huge sector that is begging for web3 innovation. Across the world, there are small ride-sharing companies that operate in limited cities and routes. We also know of the global names in the ride-sharing business like Uber or Lyft. These businesses do a lot of great jobs in making sure customers get to their destination in time.

The ride-sharing business is one that handles a lot of personal data. This business cannot be completed without sharing of some sensitive personal data like location, and personal details. Also, it involves payments as customers have to settle drivers after getting to their location. These and many other reasons made it necessary that web3 has a big role to play in the ride-sharing business. Before we look at how web3 could come in, here are some challenges of today's ride-sharing models.

Ride-sharing challenges and web3 solutions

There are many challenges in the ride-sharing sector. We may not be able to look at them all. But we will look at 4 problems that web3 could easily solve in the ride-sharing business.

1. Lack of data privacy

The ride-sharing business is heavily built around data collection and storage. When passengers request rides, they need to provide their location data in order for the driver to pick them up. They also need to provide destination location data too. While this is very necessary to effectively offer the service, such data could end up in the hands of third-parties and expose the owner.

After a ride-sharing service is completed, the customer has to make payments usually in digital format. Such payment will include the user's name, phone number, address and other personal data. As such data is collected, ride-sharing companies often exploit that. They share user personal data with partners without the consent of the owner. They also monetize such data by sharing them with advertisers and anyone who is willing to pay.

So by the time the customer left, their data submitted for the ride could be used to track their movement and whereabouts. That could lead to security issues or even expose them to crime.

Web3 solution to lack of data privacy

There are many ways web3 could help decentralize ride-sharing and improve privacy. Implementing a blockchain-based ride-sharing would mean that user data is not stored on servers controlled by a single individual or business.

The blockchain is stores data in distributed computers across the world. So data is not controlled or centered in one server or location. So with this, there is no single point of failure. Besides, blockchain data encryption could be used to hide user sensitive data and only reveal them strictly on demand to authorized apps.

Another thing that could be done is to use decentralized user ID services to verify the user. That means, instead of submitting sensitive data like name, address and other details, a blockchain-based ID management system could be used. In this way, user data is protected and privacy is enhanced.

2. Fear of strangers

Ride-sharing services often connect drivers with people traveling the same route to share their vehicle. That means that willing drivers have to share their rides with total strangers. The driver or passenger might feel insecure sitting there alone with a complete stranger. Instances of criminal activity and other awkward situations like harassments might make the fear of riders and drivers a troubling issue. But web3 could be used to vet all parties before a ride is scheduled.

Web3 solution to fear of strangers

Blockchain-based identity management systems could be implemented to create a decentralized, transparent and verifiable database of drivers and riders. Each party can independently verify the travel history and rating of the other party. This is a great way to vet everyone and ensure that only good actors have a chance of being given a ride.

Both for riders and drivers, a decentralized and authentic user profiling guarantees more safety and reduces the possibility of getting paired with a criminal or rude trip partner.

3. Biased reviews

At the end of a ride-sharing trip, customers rate the ride and driver in order to give new customers an idea of what to expect when they book a ride. Today's rating and review systems are biased. Because the rating is done on the platform managed by ride-sharing companies, they often manipulate the rating system.

When many customers give a low rating for example, the system admin acting on behalf of the riding-sharing business might edit the number of stars and remarks made by a customer. In this way, the review will no longer reflect the actual user experience it represents.

Also, ride-sharing companies might try to have people submit fake reviews or even try to manipulate the type of review a customer wants to give. These are all bad practices that bring a lot of bias to the rating system. At the end of the day, potential customers might not be able to trust the ride-sharing business if the review they read did not reflect they quality of service they later received.

Web3 solution to biased reviews

One feature of web3 - especially blockchains is that it is tamper-proof. By design blockchain technology features immutable data storage. Whatever is stored on the blockchain can never be deleted, edited or manipulated in any form. Thus the blockchain guarantees data originality and authenticity. This feature would be especially useful in building a blockchain-based rating system for ride-sharing.

On a web3 ride-sharing review system, users are sure that whatever review they give remains authentic. No one can tamper with it or change the review. Fake reviews would also not exist because the reviewer needs to submit some original data which shows they actually used the ride-sharing service.

For new customers trying to book a ride based on lots of positive reviews, they are assured that the reviews that see are genuine and not manipulated. One web3 could guaranteed a fair and unbiased review system for a ride-sharing business. Once it is implemented, trust is completely assured.

4. Environmental pollution

When everyone uses their own vehicles to move around, there are more vehicles on the road and that vastly increases the rate of gases released into the atmosphere through vehicular emissions. Today, the impact of air pollution can be seen in the form of global warming. Environmental disasters like flooding are a direct consequence of the air pollution hugely contributed by many vehicles on the road.

If there could be a way to reduce the number of vehicles on the road or incentivize the user of greener alternatives, the environment could be saved of so much degradation.

Web3 solution to environmental pollution

Tokenization of ride-sharing for transportation. Users that book rides and share with other users going in the same route could be rewarded with some tokens. Such positive choices needs to be rewarded and web3 platforms could reward users with some tokens each time they share a ride. When users are rewarded this way, they see more reasons to share rides instead of using their own cars.

Also, greener alternatives in transportation need to be rewarded too. Ride-sharing companies might go for electric cars and then reward users with a token for booking electric cars. Taking it beyond the ride-sharing space, users that purchase and use electric vehicles could also be rewarded in some way using cryptos. Tokenization of ridesharing in this method will go a long way in solving the problem of vehicular emissions as travelers are rewarded for making choices that impact the environment positively.

5. Paying for a ride

Today, riders often have to pay for a ride at the end of the trip. The most popular means of payment is electronic via direct bank transfer of funds. While this has so far worked in many places, it also has its challenges.

Direct bank transfers through mobile apps come incur a network fee from the bank. So the rider does not just pay for the amount agreed, they also pay processing fee to the bank. In addition to this, bank payments or networks could be slow and they also expose the personal details of the rider. At the end, privacy is endangered at a huge financial cost.

Web3 solution to ride payment issues

Crypto payments for a ride are made possible by web3. This presents a much better alternative to bank payments. At the end of a ride, crypto could be transferred to the driver. Crypto payments are very fast and instant, no delays. In addition, crypto payments are free. So the rider does not incur any additional fees for payment processing.

Most important, crypto payments are usually encrypted and does not reveal the identity of transacting parties. So for driver and rider, crypto payments provide a secure medium of exchange. And there is data privacy of all participants.

Conclusion

Web3 would greatly upgrade the standard of todays ride-sharing space. Blockchain technology will enhance privacy, guarantee total ownership of data and data security, and also ensure that users build a trusted profile and travel history. All these would be crucial to building a modern ride-sharing economy where all parties win.