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Using blockchain to manage vehicle data, personal preferences, and transactions

With vehicles and rides increasingly shared, drivers’ preferences need to travel with them to create a personalized experience.

Mobility is about more than just cars. Consumers are demanding customized mobility options based on their individual and lifestyle preferences. Automation, artificial intelligence, digital commerce and the Internet of Things (IoT) are fundamentally redefining how vehicles operate, and vehicle usage and ownership models may change entirely. The ripple effect of these disruptive changes will drive changes in overlapping industries such as insurance, energy, travel and oil as well.

According to a recent study from the IBM Institute for Business Value, the use of the personal car as the primary mode of transportation will decrease by 5 percent over the next 10 years. The actual usage time of most cars is limited. But with new options for vehicle access, people no longer have to pay up-front for a car that is likely to be parked most of the day. Instead, drivers and passengers can pay for access through a mobility service.

For example, car2go is a car-sharing system that doesn’t have fixed rental locations. The company is also expanding to commercial fleets to improve capacity utilization and lower costs. Giving up car ownership doesn’t have to mean giving up personalized mobility.

But people expect to have the same personal experience of using a car whether they own it or not. They want the car to behave like other personal devices, with the ability to access their favorite entertainment and information, shop, book hotels, or even monitor their health.

Sophisticated consumers have high expectations for personalized interactions because of their experiences with other industries such as retail, where personalization and customized choices are widely available. As vehicles become more software-oriented, the ability to personalize the in-vehicle digital experience becomes possible in cars as well.

Using data about an individual, a vehicle can offer the personalized experience people desire. The car then becomes just another smart device that also happens to move them around. However, for these in-vehicle, personalized experiences to become viable, it’s critical for data to be secured reliably.

In the future, a secure ledger based on blockchain can be used to manage vehicle data, personal preferences, and transactions. With blockchain, distributed ledgers are shared across a scalable group of individuals and institutions.

It brings trust, transparency, and auditability to participants. Data that is associated with an event or transaction is time-stamped, appended to the record preceding it and made available to authorized participants in real time. Because records can only be added using rules agreed to among the participants, they can’t be circumvented by individual actors. The data then becomes part of a reliable, unbreakable chain of trust.

In the context of personal mobility, blockchain can be used to identify the digital identity of a driver, a rider, and a car. The configuration and preferences of a specific car can be locked to an individual’s identity. This identity moves from one car to another. So one day a driver might be behind the wheel of a BMW, but tomorrow she may be driving a Volkswagen. The driver’s preferences for horsepower, entertainment and even insurance rates transfer with her from car to car.

Blockchain also can manage micropayments for the driver to charge the car, and pay for tolls or parking. All of this information is connected to the identity of both the driver and the specific car. With blockchain, it’s possible to securely identify who was using a car in a given timeframe, which allows new business models to emerge, such as pay-per-mile.

With the ability to attribute driver responsibility, insurance companies can calculate rates based on mileage and driver behavior. With a persistent driving profile, the insurance risk model changes based on the way an individual drives. This approach incentives people to drive better so they avoid burdensome insurance costs.

Because a driver’s profile is a valuable dataset, management is important. Security, authentication, and privacy are crucial to services that are enabled by blockchain, encryption, and the use of smart contracts. For both ethical and regulatory reasons, companies will have to govern and monitor the blockchain network.


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Meet the authors

Julian Fieres

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, Head of Strategy, Business Development, M&A - Division E-Mobility at ZF Friedrichshafen


Dele Atanda

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, Digital Innovation Officer, Global Lead, Automotive, Aerospace and Defense, IBM Consulting


Oliver Gahr

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, Program Director Innovation, Blockchain and IoT, IBM Research and Development

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Originally published 01 November 2017