Working towards Integrated Mobility Concepts for Everyone with Blockchain and DLT Infrastructure

Marcel Wipijewski, Strategic Coordinator to Head of Mobility Unit, Volkswagen Financial Services AG
Marcel Wipijewski, Strategic Coordinator to Head of Mobility Unit, Volkswagen Financial Services AG

Marcel Wipijewski, Strategic Coordinator to Head of Mobility Unit, Volkswagen Financial Services AG

For the last three years, I've been working on promoting the idea of integrated and seamless mobility concepts. My personal pain points are serving as the primary motivation. Dozens of different apps, accounts, payment solutions for, in many cases, entirely identical services exist. What I definitely don't want, when visiting a new city and spontaneously have the idea to grab a shared bike, is to download an app, create an account and enter my credit card for the 10x time within the last three weeks.

When I got familiar with the ideas of blockchain and distributed ledgers, I was immediately fascinated by the potential that lies in an infrastructural layer to build trust and make business among different parties!

Many discussions have since been around the ideal, seamless mobility journey for a private customer: Open your "Mobility app", search for a route, purchase one ticket and use different modes of transportation—let's say bike sharing, subway and Uber during one journey. Why is that not possible already today and why do even the biggest players such as Google struggle to establish this customer journey smoothly?

In my opinion, one major reason is the complexity of integrating non-transparent centralized systems with each other by using bilateral interfaces. The following visualization shows pretty straightforward how the concept of a distributed legder technology (DLT) / blockchain is different from today's standard infrastructures.

Another key challenge is the underlying governance of such complex networks, which is why historically there have been intermediaries to handle it and broker between different parties.

The example of the e-mobility space perfectly shows what I mean by that: Thousands of different wallboxes spread across Germany, owned by dozens of different providers with their individual backends. Consequently, companies such as Hubject or e-clearing.net popped up as aggregators to decrease complexity for third parties. They interface with the different providers and offer a consolidated charging product to other businesses and end customers. But is there a need for aggregators and their technical aggregation platforms? Do we need a Google, Amazon, Tencent or Alibaba for the mobility area?

One startup that has been intensively working on responding to that question with "no" is Motionwerk—and just recently, they also established the “Share&Charge” foundation. The idea is to build an open, standard protocol for e-mobility; or as they say “Enabling the open EV-Economy of tomorrow”. This would enable everyone to simply connect to the protocol, enter relevant information such as the location of the wallbox, prices, availability, etc., and be part of the system. Transactions will be handled by the protocol and stored safely in the distributed ledger. While the basic concept is already working today, several questions regarding taxation or auditing require more attention for a broader market acceptance and full legal compliance.

Moreover, there is a need for identity management and payment tokens that should be applicable for different use cases within the mobility space.

But let's dig a little deeper in order to understand the evolution of the concept. Famous economist Michael M. Porter published an article on “How Smart, Connected Products Are Transforming Competition” in Harvard Business Review in 2014. I have slightly adjusted his example on the transformation of the farm industry towards the evolution of the automotive industry towards integrated mobility systems:

What becomes very clear if you're familiar with the automotive industry is that currently OEM's are heavily investing in moving from stage 3 to 4. “Mercedes me”, “BMW ConnectedDrive”, “Volkswagen We”, “FordPass” to name just a few are all trying to connect OEMs’ cars with their customers. But if we think about “mobility”, there is more than just locking and unlocking your car with your smartphone, paying your parking ticket or booking the next service appointment from your tablet. People make journeys and may want to seamlessly switch between different services and service providers. And this is why stage 5 becomes neccesary!

If you want to park your car, take the bus to the city center to visit the local museum and ride a shared bike afterwards, more integration is required to have a smooth experience. In addition, the announcement of Daimler and BMW to combine their mobility activities already shows a need for efficiency through collaboration since margins (if there are any so far) of mobility services such as car sharing or bike sharing are small. In the case of public transportation most cities also have to subsidize their services.

The idea of the above mentioned systems integration is to remain the logic of assets (plus their ownership) and products/services as we know them today but use a shared transaction layer for handling the transactions. DLT, blockchain based infrastructures can be the enabler for that! Instead of building and maintaining individual platforms/backends for these services, they could be run on a shared transaction layer:

If we change perspectives, there might also be interest from authorities to incentivize a certain behavior, for example ride a bike instead of taking the diesel bus, by offering discounts on local attractions. Incentivizing and enabling eco-friendly modes of transportation may also be an alternative for cities to avoid bans of diesel cars. From my point of view, the idea of shared, open transaction layers has the potential to serve as the basic infrastructure for bringing together:

1. different users (e.g. end customers, businesses, authorities)

2. different assets (in particular IoT devices and vehicles)

3. different use cases (e.g. sharing, purchase, lease, insurance, parking, public transport)

Enabling one infrastructure to securely and efficiently run transactions and simultaneously allow interoperability and transparency is the key to a future of seamless mobility that allows users to travel borderless and without the need to tie themselves down to a handful of specific services.

From a couple of news and initiatives one can already get the impression that DLT/blockchain and collaborative approaches may be a good fit:

Let's see how the mobility market will develop over the next months and if DLT/blockchain will play a role in enabling the applications discussed above.

One key challenge will be to bring the enthusiam of new technology promoters in line with real life requirements such as legal contracts, KYC processes, auditing, taxation, and GDPR compliance.

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