On paper I like the Turo business model, and I like car clubs like Classic Car Club Manhattan. As someone who doesn’t have the money to buy numerous exciting cars, they can be a good way to try a variety of interesting cars. Of course, for people with higher budgets, becoming partial-owners of a high-dollar car is a very effective way to trade in and use cool cars. Indeed, Paul Zuckerman and Spike Feresten discussed this approach in a recent Smoking Tire Podcast. This does require partnering with people you know, who share your interest and taste. However, using blockchain technology could change this radically. Porsche even introduced their own car sharing program overseas a couple of years ago.
TEND, an Ethereum-based marketplace for sharing luxury goods, is attempting to break down this process. By sharing a Porsche via blockchain, TEND can spread the costs across numerous anonymous investors. The platform allows buyers to use tokens to buy shares of a product, which puts the asset itself on the blockchain.
This approach targets younger enthusiasts, who have an interest in the product, but who may not have the assets to own a classic Porsche fully.
Breaking Down Shared Ownership
The 356 will ultimately be maintained by the affiliated dealer, Porsche Zentrum Zug, but that is not the end of the chain. Ownership will be brokered through the blockchain using Smart Contracts. These protocols will allow the individual shareholders the ability to create and enforce the ownership contract without a third party. In this situation, each shareholder is meant to have access to the Porsche in a fair and equitable way. Handoffs will occur through the dealer, though the dealer is not a part-owner.
The 356 acts as a token, which in the world of cryptocurrency is a tradeable asset which can be floated on the blockchain.
The dealer’s role is then to act as a physical platform for the app, not as a rental agency in the traditional sense. In this way users can ensure that the Porsche is cared for, while remaining accountable to one another via the Blockchain Smart Contracts. The TEND users reportedly wanted to work with a single dealer to ensure that a known group of people are ultimately responsible for the 356 itself.
TEND and Porsche Zentrum Zug are planning to bring more Porsches into the program. Ultimately TEND wishes to use this model with a number of other brands. In this way, TEND will turn other items into Tokens.
TEND is not alone in this pursuit. Well known brands, such as Kodak, have begun using the coin model for a variety of uses. Kodak is using their cryptocurrency as a rights management model, adding security to a photographer’s work. TEND’s model is similar, ideally giving increased rights and protection for owners of shared luxury assets.
My primary concern is volatility. Particularly over the last year, cryptocurrencies(bitcoin, most notably) have proven to inflate and deflate at an astounding rate. By using a Porsche as the token, an asset typically traded using a more stable currency, the owners might find themselves on the wrong end of these currency changes.
At this stage, this process is Porsche Zentrum Zug’s only interaction with cryptocurrency. The dealer is using this program to track the usefulness of the product. By their own admission, Porsche Zentrum Zug is not “fully on the cryptocurrency train.”
It will be interesting to see where this endeavor goes. On one level, it seems entirely more egalitarian and accessible than most commercial car-sharing programs. On another, the fears about cryptocurrencies as stores of value can now be measured against an asset car enthusiasts understand deeply.