Hackathon project for Distributed Trade 2016
Max Fang (@MaxFangX), Dominik Schiener (@domschiener), Rohan Mishra (@Meeshbhoombah)
The "last mile" problem regards how goods in a shipping route get from the last hub (like a post office or UPS store) to their final destination. Due to the irregular nature of city roads, delivery trucks routinely have to deal with traffic congestion, impeding other cars, and parking haphazardly along busy roads. Despite the last mile only comprising a tiny part of the total shipping distance, it can represent up to 28% of the total cost. Thus, moving goods through metropolitan areas is the most complex and expensive aspect of the shipping supply chain.
The best way to resolve this is to scale it down. If you only need to deliver a package one or two miles away, why is it necessary to sit in a truck in a traffic jam for 15 minutes? Instead, you can employ a network of couriers to bike through back alleys and shortcuts, saving gas, money, and time all the while.
But now that we rely on a decentralized network, the key questions then become: How can we cut costs while trusting that packages are going to be delivered? Furthermore, how can we ensure that this network will adapt to the ever-changing demands of our economy?
As free-market theory maintains, the best way to cut costs in almost any market is to increase competition. Our solution is to create a DAO (Decentralized Autonomous Organization) where shippers like Fedex are able to post shipping orders, giving individual couriers the option to accept these orders and take a fee. This is enforced by a smart contract that acts as an escrow. When a courier accepts a shipment request, they are required to hand over a monetary deposit proportional to the value of the package. The more packages the courier delivers successfully, the higher their reputation goes, and the less money they are required to deposit into the smart contract as a result.
Before you know it, you've created a reliable, capital-efficient network for bringing down that 28% of the total cost, all transparently documented on the blockchain. Anyone can ship their goods, and anyone can start as a courier, giving people a low-barrier opportunity to earn money in their spare time. Furthermore, because a portion of the fees go to fund DeliverDAO itself, the most reputable couriers in this network can vote on funding proposals, such as opening locker locations to safeguard goods, or expanding services into new cities.
The DeliverDAO Dapp, as built at the hackathon, includes IoT devices with NFC capability for verification, and a user interface that's powered by Solidity smart contracts.