Cryptocurrency was created to help people enjoy financial independence free from the hassles that come with using traditional banking systems. It is over a decade since the first cryptocurrency was introduced, and a lot has happened within those years. For instance, several use cases for both blockchain and cryptocurrency have been discovered. It is becoming clearer to see that blockchain and crypto are more than just payment systems for FinTech. One sector that is getting a facelift with the integration of blockchain and cryptocurrency is the ridesharing sector.
The Problems Of Ridesharing
No sector has a monopoly on perfection, and thus it is imperative to always look for ways to get better. Ridesharing is one sector of the transportation industry that has experienced considerable growth over the years.
There are many companies in the market offering ridesharing services while trying to outdo their competitors. It is a good venture with lots of prospects and innovations. However, it is important to note that there are flaws and irregularities within the sector that need to be addressed.
Different problems are plaguing the ridesharing business, and these problems are because the business model is centralized. Other problems include poor remuneration of drivers, lack of incentives to keep the drivers, hidden fees, no transparency, and many others. People also have to deal with inconsistent policies, among other irregularities.
Basically, the ridesharing business structure favors the promoters and riders more than the driver. The driver does the leg work, while the company accumulates the profits. Drivers do not get consulted before policies are changed, and that is due to the centralized nature of the system.
There are supposed to be milestones with bonuses for the drivers to get, but those milestones cannot be achieved easily. The drivers also suffer the consequences of fare cuts that the companies impose consistently.
The Blockchain/Crypto Solution
The first solution that blockchain brings to the table is decentralization. Decisions will not be enforced without the active participation of the drivers.
Furthermore, the removal of 3rd parties will reduce the ridesharing fees, and make it a driver-passenger transaction.
Blockchain and crypto can help define the market, reduce consistent fare cuts, and provide incentives to make the drivers stay. Smart contracts can be implemented to protect both the driver and the user.
Blockchain is transparent and secure, which makes it easy to see transactions and mitigate the risks of fraudulent practices. The adoption of cryptocurrency for ridesharing can be used to power the system, and also reward the drivers.
There are so many benefits of integrating blockchain and cryptocurrency into ridesharing. Interestingly, different ridesharing companies have begun to adopt the technologies, and that is a welcome sign.
Back in February, Uber’s CEO announced that the company was considering Bitcoin payments for its ridesharing services. Dara Khosrowshahi, the CEO of Uber, stated that:
“Just like we accept all kinds of local currency, we are going to look at cryptocurrency and/or bitcoin in terms of currency to transact,” he said. “That’s good for business. That’s good for our riders and our eaters. That we’ll certainly look at and if there’s a benefit there, if there’s a need there, we’ll do it. We’re just not going to do it as part of a promotion.”
Crypto payment is making headway with other sectors. It is only a matter of time before it becomes mainstream for ridesharing services.
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