Drife takes on Ola and Uber with blockchain technology
Lack of available taxis, trip cancellations and price spikes are making ride-sharing services increasingly difficult to use in Indian metros.
Drivers likeand face a different set of challenges, such as rising fuel prices, large and opaque commissions paid to ridesharing partner apps, difficulties in making EMI payments, and more.
Entrepreneur Sheikh Firdosh believes that leveraging blockchain technology to address existing challenges is the best way forward.
With the Bengaluru-based blockchain project(founded in 2021), Firdosh and co-founders Surya Ranjith and Mudit Marda are building a ridesharing experience with no commission charged to drivers, market-driven pricing, open governance and transparency.
“Ridesharing companies are billion dollar businesses, but their drivers are still struggling to make ends meet. The most disturbing part is the existence of centralized parties manipulating the system for profit. This shows how flawed the system is. This is where Drife comes in to fix broken parts,” she said in an interview with The story deciphered.
An early stage project, Drife is live in Bengaluru, with the peak concentration of its blue and white taxis at Kempegowda International Airport.
Firdosh claims the startup ends around 1,000 trips per week. Rides can be booked on its Android and iOS app.
How Drife Works
Like on other ridesharing apps, a customer on Drife must enter a pickup and drop-off location to find the nearest drivers. But from now on, Drife offers much more freedom to customers and drivers compared to Uber and Ola.
“Incumbent operators have a dispatch service where they choose the driver to allocate to a customer. We don’t do that. We have a unique matching algorithm (based on ratings) and a search radius category that searches all eligible drivers near the customer and shows them the user’s request. In addition to the base salary allocated for the trip, each driver ready to accept the journey has the possibility of proposing a higher or lower amount for it,“explains Firdosh.
Users then have the option of viewing all offers submitted by drivers and choosing a driver of their preference. Drivers cannot modify an offer once submitted.
These extra steps save users having to call them to ask for the destination, how much the trip is worth, etc., thus avoiding cancellations, adds Firdosh.
“The drivers know all the details of a trip before accepting it and indicating its price. We try to be fair to users and drivers, and let them choose the price of a ride, instead of us deciding it for them,” she says.
Drife is currently live in Bangalore
Transparency in trip prices
The basic salary is calculated according to the tariff set by the local government, the time and the distance involved. The amount does not depend on the current supply and demand conditions at any given time.
“There are no hidden multipliers that increase travel prices at different times,” she says.
Firdosh explains with the example of a taxi ride costing Rs 2,000 on Uber. Assuming commission laws are followed, she says the driver would receive 80% of the fare (1,600 rupees), while the rest would go to Uber.
However, several drivers continue to report that ride-sharing services deduct commissions of up to 30-40 percent. In reality, drivers may receive far less than they expect. This has placed ride-sharing apps under the scanner of authorities concerned about the lack of transparency surrounding the algorithms used to calculate prices and commissions.
“When Drife calculates the base salary based on distance and time, we arrive at a price of approximately 1,000 rupees. A driver who wants to make the trip can quote Rs 1,600, and the customer accepts it,” she explains.
She claims that at Drife there is no commission and the driver keeps the full amount earned on the trip. Firdosh believes that at scale, with drivers making multiple trips per day, this model can allow drivers to earn more (and seamlessly) than they would on other platforms.
Drife Revenue Channels
With no commission charged to drivers, the startup generates revenue in other ways. It charges its driver-partners a nominal monthly subscription fee of Rs 2,500which gives them access to the platform to accept, bid and complete runs.
“In addition, we are working on a franchise model where people in other cities can potentially run Drife’s operations. Building technology around ridesharing in new cities is lucrative but exhausting, so we select the best possible parties that can run operations elsewhere. We have implemented a revenue share model where we receive a portion of the subscription fees that drivers will pay to franchise owners,” says Firdosh.
Unlike some blockchain applications, Drife is not a Web3 solution looking for a problem to solve. The ridesharing industry’s challenges are well documented, and Firdosh admits that all previous attempts to solve them via blockchain have not been as simple or intuitive as they appear.
“People have tried to build Uber on the blockchain, but decentralization from day one won’t magically solve any problems. Decentralization should happen in phases. First, the app’s calculations and algorithms derive leveraged smart contracts to achieve full transparency for fair allocations and then operations are decentralized through the franchise model,” says Firdosh.
This steady approach to centralization that slowly dissipates is often referred to as “incremental decentralization”. One of its main promoters is the Ethereum scaling project Polygon, which, in fact, is the network the startup is built on.
The driving ecosystem and the road ahead
The Drife ecosystem includes the DRF token, which can not only be traded on exchanges by users, but also earned by drivers by performing various activities on the platform, and redeemed for discounts on subscription fees. The project also allows drivers to stake their earned DRF tokens for micro-loans.
“Our operations in Bengaluru and India do not involve the DRF token, and our operations operate seamlessly without it. We follow a strictly fiat-based model where passengers and drivers only transact in INR,” says Firdosh.
As it is still an early stage project, Drife’s immediate challenge is to match demand and supply. Acquiring drivers, users, and tracing drivers within a two-mile radius when a customer submits a ride request isn’t as easy as it’s done for multibillion-dollar ridesharing companies, he shares. -she.
In 2021, Drife raised $2.7 million in a funding round (private token) to fund its vision for decentralized transport in the Indian shared mobility market, which is expected to grow from $1 billion in 2019 to $3.95 billion by 2025, according to P&S Market Research.
“We know there are a few global projects, such as arcade city and AVD protocol, who want to create decentralized carpooling experiences. But there’s not much built on the ground,” says Firdosh, adding, “The Web3 world is sometimes so consumed by metaverse and gamification projects that there’s hardly anyone building real world projects.