Sharing Economy 2.0: La Zooz and Ride Sharing
Sep 07, 2015
The Most Important Democratising Force in History
Blockchains finally give the people the tools to create a real 'Sharing Economy'. We now have the technology to build systems that do not need a central body between people, users or citizens. Last week I posted in The Kansas City Shuffle, Bitcoin and the End of the Accounting Industry: "Blockchains are the economic infrastructure that allows all sorts of assets to be packaged up and sent to anyone else without the need for a central authority. The network, rather than a third-party, validates a transaction."
Centralisation has been a core organising principle for the economy and society since the agrarian revolution. For the first time in history humans have the technology to exchange goods and make collective decisions with each other. No central authority required. The blockchain has the potential to be the most important democratising force in history.
There are many new decentralization projects like a decentralized domain name system with NameCoin. A decentralised land registry by Factom. One of the most interesting projects is by La Zooz, a decentralized ride-sharing company.
Sharing Economy 2.0: Getting Around
The transportation industry is almost completely unaware of the potential of the blockchain. Just as the telecommunications industry predicted the mobile revolution with themselves at the centre. Transportation companies are making the same mistake. They are putting themselves at the centre of the software and peer-to-peer revolution.
La Zooz is a decentralized transportation platform owned by the community. The platform rewards drivers who share unused seats with a digital currency called Zooz. Users use the currency to pay for their future rides. The network synchronises demand with supply. As with other blockchain-based solutions, rides are not confirmed by a central authority. Profit is not taken out of the network.
The network effect will be the single biggest determinant of the success of failure of La Zooz. As with any other type of network, La Zooz will need plenty of drivers and riders to make the service and tokens valuable. To ensure Zooz tokens are valuable, La Zooz will need to make sure tokens are interoperable with other digital currencies. La Zooz is one of the first blockchain ride-sharing companies. There will be many other efforts popping up in other cities around the world in the next few years. They will take advantage of the blockchain's permissionless innovation as well as the global ubiquity of GPS-enabled smartphones. Ride-sharing businesses and mobility providers should be thinking about how to use blockchain services.
Decentralization of ride-sharing is a limited example that if applied to other domains and industries could have profound impacts. Using the term ‘sharing economy’ to describe companies like Uber, Airbnb and WeWork is misleading. These companies have built valuable platforms that allows people to sell or rent under-utilised assets like car seats, rooms, and time. They are central bodies that sit at the middle of the network. They still own the platform and sit between the buyer and seller. La Zooz and other blockchain-based services are decentralised. They will enable the real ‘sharing economy’.
The blockchain allows communities to organise and exchange value for the first time. Competitors of the future may not look like they do today, they may look exactly like your customers.
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