Covesting
Contributor
Drivers are rewarded for taking steps to ensure a leased vehicle’s resale value stays high.
Like many other auto manufacturers in recent months, BMW is exploring blockchain in various applications. In a new pilot, BMW, in partnership with blockchain startup DOVU, is utilizing a blockchain platform to track mileage in leased vehicles.
Leased vehicle contracts typically stipulate a set limit of mileage the lessee can travel, to cap the impact mileage may have to the vehicle’s valuation and future resale price. BMW will use blockchain to track the mileage more efficiently, and provide incentive to drivers via a cryptocurrency-based reward system.
DOVU’s Head of Product Alex Morris explained the token-based reward system to Coindesk:
"What we're doing is we're essentially trying to build out this circular economy on the DOVU platform. [Drivers] can earn tokens, but down the line they'll also be able to spend tokens on services - for example, they might be able to get replacement tires or something like that using the Dovu ecosystem. The partner, in this case BMW, defined the categorization of the reward and that's defined in a smart contract. As long as the parameters are met for the smart contract, they'll receive tokens.”
Morris added:
"Right now mileage is the most important factor for the resale value of their vehicles. The problem is quite an important one for them to solve, so when we suggested tokens to incentivize them to do that they were very excited.”
BMW will use the data to better understand how many miles a driver travels, and the impact mileage may have on the vehicle’s performance and value.
The first phase of the pilot focusing on proof-of-concept has been completed, and DOVU will move full steam ahead to the second phase of testing with actual drivers, which could take up to 6-8 weeks, according to DOVU’s community manager Max Lomuscio.
DOVU is working with BMW as part of their Innovation Lab initiative, first unveiled in February. DOVU is one of five startups participating in the Innovation Lab.