Decentralized Uber // why hasn’t it ‘killed’ the centralized one?
There were countless attempts to figure out how to run a decentralized Uber because it is a typical solution that can be scaled in many use cases. Autonomous AI is needed.
Some projects have already launched..
Here is a summary of the key points from the protocol description:
- The Rideshare Protocol (TRIP) is a proposed open and decentralized protocol for ridesharing that aims to create a fair marketplace and global network for local rideshare companies and drivers/riders.
- TRIP enables interoperability between rideshare apps and services, allows market forces to set fair pricing, and keeps more money in local economies compared to current centralized rideshare companies that charge high fees.
- The TRIP Marketplace is a set of smart contracts that provide coordination, consensus, and governance services to the rideshare network. It is governed by TRIP Reward holders.
- TRIP Rewards are issued to active participants to incentivize network growth and participation. They provide voting power in network governance.
- Payments are made using stablecoins pegged to national currencies. This brings stability without intermediaries.
- The protocol is designed for regulatory compliance through on-chain verification of operators and certificate-based rider/driver authorization.
- Privacy is maintained by limiting data sharing only to required recipients. No personal data touches the blockchain.
- In summary, TRIP aims to create an open and fair global marketplace for ridesharing through decentralization, proper incentives, and compliance.
The operation of the decentralized rideshare network involves the following entities:
Riders and Drivers are Users who connect to the protocol to offer or request rides using Rideshare Applications. These apps are the equivalent of a web browser or email client.
Operators handle the regulatory and operational requirements of providing rideshare service. They are powered by Rideshare Server software which is comparable to a web or email server. Depending on the applicable local regulatory framework, an Operator may serve as Transportation Network Company (TNC) or Transportation Network Provider (TNP) or Fleet Manager.
The TRIP Marketplace consists of a set of blockchain smart contracts that offer coordination and consensus services to the rideshare network. These smart contracts are governed by a Decentralized Autonomous Organization (DAO) of TRIP Reward holders and help the network remain neutral and fair without having to rely on centralized authority.
Balancers are network participants that help the TRIP Marketplace overcome supply/demand imbalances by inviting additional drivers and riders.
Verifiers are entities who inspect driver licenses, perform car inspections, conduct background checks and verify phone numbers.
Compliance Auditors are entities that are capable of confirming the legal and operational readiness of both Verifiers and Operators.
Operator is a centralization point here.
Here is a summary of the key points from the article:
- Crypto-networks are decentralized two-sided marketplaces that align incentives of stakeholders so they can coordinate without a central party extracting rent.
- Examples of everyday two-sided markets are Uber, eBay, Youtube. The difference with crypto versions is there is no central party extracting fees and controlling operations.
- Roles in a crypto version of Uber would be drivers, riders, and dispute settlers. Drivers and riders stake tokens as collateral for good behavior. Dispute settlers vote to resolve conflicts.
- Governance is handled by a DAO that gives voting power based on usage and contribution, not just token holdings. This better aligns incentives.
- As the network grows, more people buy and stake the token, increasing its value. This incentivizes early adoption and aligns stakeholders to act in positive ways.
- Benefits are greater value capture for users and decentralized control. Drawbacks are worse UX, liability of losing money, and challenges scaling.
- The thought experiment illustrates how crypto-economics can create decentralized networks that align incentives and grow value for participants.
What would a crypto version of Uber look like?
This is a thought experiment to help us think through and understand how crypto-networks work from a high-level economics perspective, and how they align incentives without a central party calling all the shots — and extracting significant value from the network.
Firstly, let’s define the roles in the network:
Drivers
Riders
Dispute settlers (when a driver and a rider enter a dispute; who is the arbiter of justice?)
Unfortunately, the ideas from this article on how to create a decentralized Uber have some critical issues. Replacing the centralized Uber service with dispute settlers isn’t a good idea, as there is ample opportunity for participants to cooperate and hack the protocol. Hidden centralization is worse than explicit one.
The problem lies in the fact that Uber operates in the real physical world, introducing another layer of issues and potential attack vectors. Perhaps the latest advanced AI can help handle uncertain situations in the same manner as humans, especially for dispute resolutions.
Autonomous AI is needed to address these issues.
How Does Decentralized Infrastructure Physical Networks — DePin Work?
Developing physical infrastructure through a decentralized model represents an evolution from the traditional “sharing economy” seen with companies like Uber and AirBnB by removing centralized control and enabling more inclusive governance.
