Before the chicken, must come the egg. Or was it, before the egg, must come the chicken?
The closest answer to one of the most famous causality dilemmas, as simplified by scientist Neil deGrasse Tyson, is, “The egg—laid by a bird that was not a chicken.”
But that answer doesn’t work when it comes to ride-sharing in developing countries like India. Because if ride-sharing in developed countries is seen as an antidote to or evolution from private car ownership, in developing countries the situation is different.
In a 2017 article, Tony Hughes, MD of economic research at Moody’s Analytics, said that one ride-share vehicle could potentially replace 10 privately-owned cars, and without ride-sharing, these 10 cars would remain unused a majority of the time.
But in India, a country with just 7% car ownership (as opposed to around 85% in the US), the lack of private vehicles is seen as a major opportunity for companies operating in the ride-sharing space.
Put simply, how can one ride-share replace 10 privately owned cars if there aren’t 10 privately owned cars, to begin with. Hence, the chicken and the egg.
Bengaluru-based Drivezy, a ride-sharing startup that graduated from the renowned Y Combinator accelerator program, thinks it has the answer—a global sharing platform that “includes a metasearch solution for sharing platforms and a blockchain-based identity and trust protocol.”
Yes, you guessed it. The correct answer to the ride-sharing version of the chicken-or-egg question is…Blockchain!
ICO ICO Un-day
Launched in 2015 as Justride, a ride-sharing platform that leased vehicles through tie-ups with individual users and dealers, Drivezy pirouetted to a new brand and business model in 2017 over a few steps.
First, it decided to shift to a largely “P2P”, or peer-to-peer model where individuals could both offer as well as ride vehicles on rent. Then, in 2018, it conducted an initial coin offering (ICO) to finance the decentralised purchase and deployment of vehicles on its platform. In plain terms, an ICO is a form of crowdfunding, where companies raise capital by issuing their own cryptoasset in exchange for established cryptocurrencies like Bitcoin and Ethereum, or local currencies like the Rupee or Dollar.
The money raised from the ICO, according to the Drivezy’s press statements and its white paper, would be used to fund the purchase of bikes and cars, while splitting ownership of these among the ICO’s investors. The white paper states that 95% of profits made from these vehicles would be split among the ICO investors, while Drivezy would pocket the remaining 5%.