Developing a Ride-Sharing App like Uber with Blockchain

Published : Jan 13, 2021


  • The use of on-demand ride-sharing apps like Uber and Lyft is gaining considerable popularity among daily commuters globally. The industry is ripe for opportunities. Instead of flag-down taxis, customers are willing to pay on-demand ride-sharing providers for convenience and a lower fee. Nonetheless, the industry is full of challenges too. For ride-sharing service providers, identifying and addressing factors that attract passengers and make them lose interest are crucial. With blockchain-based automotive solutions, stakeholders can develop a customer-centered ride-sharing app that enables them to optimize customer-attracting features while addressing the ones that force them to change service providers.

    Industry Challenges

    Costly Payments due to Intermediaries

    In the current scenario, when a passenger books a ride, an email first goes to the company, and then it assigns a driver for a journey.

    In this process, the service providers levy up to a 30 percent charge on the total fare. Consequently, it proves costly for a customer while the driver also gets the payment after a commission deduction. Indeed, extra costs arise from the presence of intermediaries between a driver and a passenger.

    Insufficient Transparency

    Often, drivers fail in how these firms work because of the lack of accountability in the existing, centralized systems. You may also have come across a concern about peak pricing if you have ever used a ride-sharing service. As a ride-sharing company involves numerous unknown roles, riders and drivers alike do not get any explanation behind abrupt price spikes.

    No Data Security and Privacy Mechanisms

    One major challenge that companies face is ensuring the security and privacy of information related to drivers and riders. Although organizations spend millions of dollars on user authentication, cases of false identities are still growing daily.

    In the following image, take a look at the current model against a blockchain-powered ride-sharing app model.

    Existing Ride-Sharing model.

    Blockchain Solutions

    Fast, Secure, and Efficient Transactions

    Blockchain enables riders via the decentralized network to communicate directly with drivers. It minimizes the extra costs accrued due to the presence of multiple intermediaries.

    Transparent and Accurate Pricing Model

    Due to blockchain's potential to provide accountability, passengers can assess how a ride-sharing business operates. A smart contract integration ensures accurate pricing every time based on the basic parameters specified in it. It results in establishing confidence and transparency in the system.

    Strengthened Security and Privacy Standards 

    By creating an appropriate ranking for riders, the rules established in smart contracts guarantee that drivers do not engage in illegal activities. Subsequently, riders can decide whether they want to take a trip with a particular service provider or not.

    Streamlined Economic Activities

    Anyone can earn money with their vehicle using the approach of a decentralized car-sharing network. Due to no intermediaries, the market opportunities expand for those with a smartphone and a secure modern car.

    blockchain ride-sharing model

    Related Post | Blockchain Applications in the Automotive Industry | Advancing Innovation

    Blockchain Apps in the Ride-Sharing App Development

    P2P Ride-Sharing Business Model

    Essentially, blockchain technology is a digital, distributed database. Instead of centralized servers, it stores data across a decentralized network of servers with a permission-basis view of all the information. With smart contracts, blockchain establishes a process that encourages members to do business with each other with minimum trust required. 

    Therefore, stakeholders can use blockchain-enabled short or long-term p2p leasing of vehicles for two parties directly involved. Without relying on intermediaries, consumers can search for rental services depending on their preferences and choose accordingly. Users may also lend out their cars and personally communicate with persons in need.

    Enhanced Identity Management

    Blockchain-based identification enables straightforward passenger and driver identity authentication. It is due to the availability of immutable data on a shared network. Users can remain confident about the identity of people using ride-sharing services. 

    Blockchain aims to curb identity fraud by supplying secure encryption keys for protection against future attacks and misuse of records. When renting out or recruiting cars, individuals should be confident of identification.

    Also, Read | Powering Digital Identity Management with Hyperledger Projects

    Fast and Secure Transactions

    Blockchain can sign digital contracts and directly make transfers between parties involved in a transaction. This transaction does not require a payment gateway managed by a third party. The integration of cryptocurrencies facilitates governance, transfers, and operations. 

    Furthermore, it removes the need for fiat currency and payment channels provided by third parties operation execution.

    Enhanced Network Data Security 

    Blockchain can ensure rideshare data security and privacy from data hackers. The resulting network can operate as Uber or Lyft alternatives that can maintain data on a decentralized database. 

    Only Dapps (decentralized apps) that enable transfers between drivers and riders can access this information. There's no central database to be compromised in this way.

    Enhanced Customer Loyalty Programs

    A blockchain-based solution can monitor the transactions of passengers and drivers to grant them reward points. They can redeem and use those points within the loyalty network as a currency. 

    For instance, incorporating incentives around their shopping, food, travel, and movie needs will encourage consumers to use crypto coins. Also, it will enable different businesses to be part of a shared crypto-ecosystem. When a user has redeemed reward points, permissioned members will update accounts accordingly.

    Also, Visit | Blockchain-Based Loyalty Programs 

    A Hypothetical Use Case

    We may develop and deploy a permissioned blockchain-based solution that records and execute contracts and transactions in a ride-sharing network. This approach can interconnect smart or autonomous cars, car-sharing services, and end-users safely and stably. 

    Users and drivers of car-sharing (fleets, associations, or people) will register on the blockchain to anonymously and seamlessly share info. This data may include vehicle location, keys to access the car, terms of the arrangement (cost per mile or insurance details), payment information, and more. 

    The approach will then process all receipts after the trip has been finished. It updates the customer database with a trip history, accessible when required. Here is a hypothetical overview of a blockchain-based ride-sharing app flow.


    A Blockchain-Based Ride-Sharing Process


    We can realize the potential of blockchain resources at the fundamental level of the system. They are the following:

    Record-keeping: Provides secure, auditable, and immutable digital and physical asset documents

    Smart contracts: Enables contracts that can self-execute and simplify long and expensive procedures

    Transfer of value: Facilitates the exchange of new property or ownership without intermediaries.

    It may also cover other relevant services like track and trace, cryptocurrencies, intellectual contracts, and oracles.

    What's Next

    Our team of blockchain experts at Oodles has a detailed understanding of how Uber or other ride-sharing app services can utilize blockchain for transformation. Contact us to discuss your specific requirements.

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1 Comments To “Developing a Ride-Sharing App like Uber with Blockchain”

  1. I am interested in using Blockchain for my ride hailing business. I would like us to schedule a meeting for a detailed chat on the project.


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