Blockchain in Public Transport

Blockchain is the new buzzword, and everybody seems to be talking about it. But what is it about and how could it be used with public transport?

 

Blockchain explained

Imagine 20 people standing in a circle on an Italian plaza. Everyone is carrying a small personal notebook. One person in the circle shouts to another “Can I buy your boat for 1000 Euros?” All 20 people in the circle write the question down in their personal notebook. The owner of the boat answers – yes! And everyone writes the answer down too. And for every part of this transaction; the contract being signed, the money being transferred, the key being handed over, the boat registered on the new owner etc. – all 20 people record what is happening in their personal notebooks. The truth about this transaction is now in 20 small notebooks. And not the seller nor the buyer can change any part of the agreement, without making a new one.

This is how blockchain works, only the 20 people standing in the Italian plaza are millions of computers all over the world, connected on a distributed ledger called Blockchain, and the small “notebooks” they write into are their local copies of the ledger.

There are thousands of Blockchains out there, all with different purposes, designed to keep a specific type of data or enable a specific type of business

 

Why is this important?

Up until now Blockchain has primarily been used in financial services and the crypto market, however recently it also expanded into enable digital art and smart contracts. And we will argue that 2022 is the year when its use cases broaden even more.

Technology is, however, never important on its own. It is which use cases it can solve that holds the importance. And in the case of blockchain three fundamentals are:

  • The decentralization and transparency, making it a perfect technology to use for information or data that should be public and not tampered with.
  • The so called “trustless” design which refers to the fact that there is no longer any need for trusting a third party to be the “impartial middleman” in the transaction between participants.
  • The possibility to create and easily manage a (crypto) currency or social tokens for any community.

To understand how we can benefit we need to zoom out of IT problems or our day-to-day operations to find structural patterns in a business that can be solved in new ways. Patterns the business may have been built upon for a long time making them sometimes hard to question or even to acknowledge. Blockchain can be a disruptive game changer. And the best way to predict the future is, as we all know, to create it.

 

Blockchain for Public Transport

Combining the benefits of Blockchain with the challenges in public transport could result in a lot of different solutions. To make it more tangible, we have examples of what it could look like:

 

All data on the blockchain

We would boldly like to suggest that all data about the location of a vehicle should be on the Blockchain. Imagine traffic operators knowing exactly what vehicle was at which location at any time, and who it was operated by. It would remove much of today’s costly administration. All the statistics and data that is currently being collected and compared between different stakeholders would instead be based on a fully transparent and non-discussable set of data.

To start with this could fully automate the settlement between different actors of the eco system of public transport. With vehicles reporting location and time to the Blockchain we have data that is trusted and transparent.

Use case examples would be:

  • Remuneration of response traffic operators. This process can be fully automated and even invoiced without human touch if the data is trustworthy and non-questionable.
  • Reimbursement after a delay will not even need to be asked for if we have an identifier of the ticket holder.
  • Distribution in between different operators when a ticket is multi-regional or in between different operators. One ticket can be divided into who delivered the service and invoices can flow automatically.

It could be argued that these use cases could be solved “if we only had the data”, why would we need Blockchain? Publishing the data on the Blockchain makes it a distributed truth that no single actor can tamper with. We are adding trust to the design by using Blockchain. And in the longer run, if all of Europe would put data about public transport on the Blockchain we are truly opening doors for facilitation of Mobility as a Service and cross country travelling. There are numerous more use cases that can be built upon public transport data publicly displayed on the Blockchain, so these would just be starters.

 

Blockchain and sustainability in public transport

Climate impact is on everyone’s agenda. From passengers to politicians and in between are the traffic authorities and operators. Today the traffic authorities and operators are trying to show numbers on climate impact by calculating standard numbers into reports, making it a questionable truth. If public transport operators would put demand on full traceability in the supply chain of vehicles, their energy etc., and combine that data with passenger behavior, a trusted report would be only a click away.

If you are a passenger on a bus, that operates solely on electricity – and the supplier of the electricity has their supply chain on the Blockchain, we can calculate the climate effect down to the single passenger and every single travel. Show that data in the booking apps, empowering passengers to make decisions. The traffic operators would also be empowered with facts and data about the energy sources and can choose and evaluate suppliers accordingly.

 

Let us innovate together!

OK, so how is the Blockchain implemented, in practice? Is it hard? How do I get started?

We have technical knowledge, and we are experts in the field of discovering business needs from our many projects with different clients. And the combination of these two elements is the fundament in getting started.

We are interested in discovering the possibilities with you and we have a unique offer including a 6-week PoC where we work with a business case and a proposed solution for you. Are you curious about Blockchain and how it can enable your business? Reach out!

 

Liselott Lading is a Business Consultant working at Stratiteq. She has a M.S information systems degree from the University of Stockholm and has since gathered experience from being a serial entrepreneur, a board member, working for global tech company and done occasional public speaking for the past 20 years. Her expertise is within digital transformation and data-driven agendas. She’s passionate about bringing European companies into the forefront of technology, as she thinks it’s needed in between China and the U.S.