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Opportunities through an Economy of Things

Blockchain with IoT offers new ways of connection and can build new incentives for stakeholder in an economy of things

October 13 2022Markus Gerling

The future of mobility you have never heard about

In recent years, we have seen many revolutions in the mobility sector. More and more people are giving up owning a car in the city and drive technolgy is changing. Now humanity is facing a new disruption. Autonomous driving is already being tested on the roads. Self-driving taxis could soon offer free rides, carry out transactions themselves and contact their customers via a decentralised network using blockchain technology. But how does it work?

Mobility and Blockchain

A highway by night, photographed frpm above

First, let's look at a platform model (e.g Uber) based on blockchain technology. The blockchain matches providers with demanders (similar to Uber). The difference is that many processes in the blockchain are automated and cheaper than in a central platform with intermediaries. For example, the car can have its own wallet ID, which contains information about the pricing system. Via a smart contract, the transfer can be executed automatically from the human to the car. This then eliminates high transaction fees and platform fees.

Incentives on Blockchain

The peer group benefits particularly from network effects, which is why it is difficult to enter the market oneself. The rapid acquisition of new network participants is therefore needed. The creation of new incentives for stakeholders could be the solution.


One idea could be that cars (sellers) are paid for their services with Car Tokens (C.T.). These tokens are only produced by the network in exchange for value creation (offering rides). Buyers (Users), on the other hand, have to pay with User Tokens (U.T.). The exchange of a Euro into a U.T. happens automatically. The U.T. has a fixed price, so that buyers are not exposed to price fluctuations. It is important to note that with every demand and the accompanying exchange from euro to U.T, a C.T is burnt. This has consequences for the market.

If the demand for U.T. increases, the number of C.T. decreases, causing the flexible price of the C.T. to increase. This gives the cars an increase in value on their portfolio. As the return for sellers increases, new sellers come into the network. This quickly creates more supply and therefore more demand. 

IM-Incentives-for-new-adopters

New Payment models

How can an autonomous taxi earn money? In the future, there could be several payment options. A third-party model could be exciting. But how can you make a service free for the end customer and at the same time economical for the provider?

The idea is that the provider (the autonomous vehicle) can finance itself through a B2B business with shops in the vicinity. The vehicle markets services / products of certain shops in the region to the customer during the ride. Example: A customer gets into the taxi and wants to dine in a restaurant. He asks the car where to find the best pizza. The car suggests the restaurant around the corner and takes the customer there. The restaurant rewards the acquisition of a new guest and pays for the ride. To be able to use this service as a customer, data transmission to the car for personalised content can be assumed. Cars could cooperate with data providers such as Google and display targeted advertising while driving.

Customized Payment models could be very interesting as well. Riders will probably spend more for special services.

Autonomous vehicles will drive in fleets. This means that all vehicles will drive at the same speed and the distance between them can be massively reduced. Furthermore, driving in a fleet can be more economical as well as more environmentally friendly and faster overall. Now it can happen that you are late for an appointment. The exact calculation of the arrival time by the car's AI confirms this. In order to still be on time, the car has to forgo the fleet benefits and drive faster. Of course, the customer has to pay for this extra service. Now the car can buy itself a free road. Microtransactions are made to the autonomous cars in front so that they change lanes. This gives you a free lane and you can be faster than the fleet. These microtransactions will run on the blockchain and be executed by smart contracts.

Conclusion

In the future, the mobility sector will experience many disruptions. New business models will emerge and new technologies will have a massive impact on the sector. The scenarios mentioned above are only a few examples of possible changes in the sector and show how cars will enter an economy of things. It remains to be seen whether these use cases can develop. A world in which cars can operate autonomously and conclude contracts with other machines, companies and individuals certainly sounds utopian today. Tomorrow it may already be the status quo!

About the author
Markus Gerling

Markus Gerling

Chief Tomorrow Officer Program, T-Systems International GmbH

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