By Vangelis Andrikopoulos and Lawrence Lundy-Bryan
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In our previous posts we explored how DLTs, IoT and AI are reshaping mobility (link) and how the Convergence Ecosystem framework is a valuable tool to contextualise the changing mobility value chain (link). Today, we want to introduce the idea of decentralised data marketplaces and why we believe they are foundational to unlocking new economic value.
Removing data silos and monopoly control
Spoiler alert, today’s digital ecosystems are dominated by a few players – Amazon, Google, Facebook, Baidu et al. We all know the story by now: more data means better trained machine learning algorithms which leads to a superior product and customer experience. This creates a self-reinforcing cycle that creates a significant asymmetric advantage towards a handful of giants leaving startups and smaller incumbents unable to participate and compete on a level playing field. Monopoly control of demand is unlike anything we have seen in the pre-Internet era and will likely result in a reassessment of antitrust and competition policy which were designed to address and limit monopolistic abuses of market power over supply or distribution. Short story short, the Internet giants are leveraging their data advantage into new markets including transportation.
However, the emerging mobility ecosystem is characterized by multiple participants that need to cooperate in order to achieve safety, regulatory compliance and seamless multimodal mobility consumer experiences. From the energy infrastructure based on solar panels and prosumers transacting on smart grids to training data for autonomous vehicles and Smart City infrastructure, the free flow of data is imperative for successful integration and collaboration.
Distributed ledgers and blockchains can facilitate the transfer of value enabling a shared and integrated mobility ecosystem characterised by collaboration in which resources, value, and data can be exchanged seamlessly by machines, organisations and people.
Machine, AI and personal data marketplaces
Sensors on vehicles, infrastructure and users’ devices capture vast amounts of data but this has led to a fragmented ecosystem with multiple participants all using different systems, standards and databases. Machine data marketplaces offer the potential to incentivize fleet operators, OEMs, and users to buy and sell data. A marketplace in which machine data is traded and priced would enable for a far more efficient allocation of resources in a mobility environment. Startups like IOTA and Xain are already exploring solutions in these areas.
Individual ownership of their data is one of the most important applications that blockchains can be configured to provide. Even though related to self-sovereign identity, it mainly refers to the ability of an individual to control their own data, identity and can then choose who can have access to it. This way, the individual gets in the position of the seller and the party who wants access to the data becomes the buyer. For example, an insurer has access to the driving data or the car makers does, but it can be revoked and the insurer or car maker does not have a permanent copy of that data. Mobility services and fleet operators would therefore be incentivized to provide the best service as switching costs are reduced and barriers to moving to another service provider is seamless. Drivers or in an increasingly automated era, riders, can choose the most suitable and secure mobility providers as they control their own data.
From computer vision enabling navigation of autonomous vehicles, natural language processing for in-transit user interfaces to vehicles acting as autonomous economic agents, artificial intelligence is fundamental to the open mobility ecosystem. Data is the core asset that trains those algorithms. Decentralised AI data marketplaces will reduce, and eventually remove, the competitive advantage of hoarding private data by enabling anybody to monetize data. It allows all participants and fleet operators to train their autonomous vehicles increasing the overall value of the ecosystem and set higher standards.
New economic value
Smart contracts, distributed computation, internet of things and artificial intelligence enable levels of automation that unlocks new economic value. Vehicles increasingly become computers on wheels, powered by software and can act as autonomous economic agents. They can buy energy from smart grids when the price is low and sell any excess energy back to it when the price is higher to make a profit. Vehicles and users individually and in concert, own and manage self-sovereign identity to unlock a global user account (“single sign in”) that is not centrally controlled by any one corporation allowing them to access a distributed ecosystem of mobility assets and services. New in-transit user interfaces powered by AI, AR/VR open up new opportunities for value provision to the consumers that compliments multimodal mobility services.
Decentralised data marketplaces are the cornerstone to the move to the open mobility era. Data, once collected and managed by shared market infrastructure utilizing blockchain technology, will be packaged up and traded in automated marketplaces. Resources, data, and value can be exchanged seamlessly leading to a decentralised, multimodal, automated, and sustainable Open Mobility environment.
To understand how to understand and adapt to the disruption in the transportation and logistics industries, download the full paper here.