Tuesday, 20 August 2013

Digital Keys Creating New Business Models

Sharing or renting assets provided by corporations, or by peers to other peers, provides many benefits to societies, and provides the backbone for industries such as travel – e.g. staying in a hotel, or renting a car whilst on holiday to facilitate site-seeing. 

Depending on the asset being shared or rented, modern technologies and devices, such as smartphones, are improving the efficiencies of managing and use of the share/rental assets, whilst at the same time creating new business models.

An example of a new business model, is in the case of renting cars. The end user is now no longer required to ring up a car rental office to make a booking, and go into the car rental office to sign forms, make payments and pick up keys for the car. All of these services can now be offered electronically, with devices and through the internet with little or no management required. 

Online advertising and online booking systems, in addition to locational devices in cars such as GPS, means a traditional car rental office becomes unnecessary, and a car can be stored/parked anywhere such as a multi-storey car park, a large open air car park such as in a shopping centre, or on any street, anywhere. 

An end-user can identify the location of the car with a smartphone and GPS for example, and then they can use technologies to be provided access to that vehicle for a limited time period (for example using distributed membership cards or with smartphone digital keys) and then use that share/rental car anytime, for any period, with minimal or no human interaction (and in some cases not having to return the car to any particular destination when finished using it). This has given rise to a new industry called Car Sharing.

Hey that's my park
Similarly, in relation to accommodation, any individual can essentially become a hotel manager/hotel staff, using modern technologies, devices and the internet to turn a spare bedroom in a house for example, into a regular use hotel room, with little or no human interaction involved in the accommodation management process. 

Just like in creating P2P car sharing business models, new technologies are spawning new business models in accommodation sharing(e.g Airbnb), sharing of tools, and supporting an entire new industry called ‘collaborative consumption’ or ‘the sharing economy’.


Rent your cage on Airbnb, whilst you fly off to the other side of the world

The smartphone as a universal remote access control device is pushing a number of traditional industries to modernise too.  Manufacturers of access control systems in commercial environments, people’s homes, and car makers have declared their intention to move to electronic systems utilising the smartphone as the key.  

New opportunities also arise in businesses and organizations that have always required frequent one-time or occasional multiple person access and security, such as schools, nursing homes etc. The access control systems currently available in the marketplace, such as keycards, have been unable to meet the demands for places like schools,  due to restrictions in design and high installation costs (e.g a traditional keycard system had to have onsite computers and the building completely wired, and can cost between $1000-$2500 per door to install). So schools for example are still using the insecure and inconvenient metal keys.

A number of proposed solutions are racing to meet the new demand for the smartphone as a Digital Key.  In the last 6 months, the top 4 global lock manufacturers, and car companies such as GM, Ford, and Hyundai, have announced plans to begin rolling out smartphone-enabled locking systems. 
This is how you will be opening GM cars in the next couple of years - throw away those big horrible key fobs

Hertz, Avis and other rental car companies are beginning to add cars equipped with smartphone enabled locking systems in their fleets, and placing them in tens of thousands of locations across the US, including shopping centres and CBD car-parks. Further, a number of car-sharing start-ups have raised significant capital on a platform of smartphone-based access control systems, with acquisitions already occurring (e.g. Wheelz and Relayrides).

A number of start-up companies in the US have recently raised significant capital (between $2 million and $13 million) and/or taken tens of thousands of orders in crowdfunding campaigns for smartphone-enabled access control systems for people’s homes. Examples include, Lockitron, August and Unikey.

As the ‘sharing economy’ and business models are relatively new, inefficiencies exist in being able to manage assets, and being able to offer the entire self-service system for the end user. 

Companies are offering complex combinations of technologies, incomplete or ‘piece meal’ systems, or adapting traditional technologies to be able to interface with the new technologies which can be expensive, difficult to install, and troublesome. 

For example in the case of some share cars and share accommodation companies such as Airbnb, a company facilitates the online booking and payment, but the end user must still make contact with the asset manager, owner or other intermediary who can provide them with a metal key to enable the user to access the booked accommodation or facility. This adds an extra level of delay, inconvenience and insecurity. For example the guest could easily cut a copy of the metal key at a local hardware store for a couple of dollars, during their stay and let themselves in at any future date and time.
Get the mobile key cutter out during your stay.


Although some companies have attempted to address these delays/inconveniences and insecurity problems by offering complete ‘vertical’ end-to-end self service electronic systems, the solutions can still be complex, expensive and difficult to install. 

For example many car sharing companies have developed and implemented keycard access control systems in cars that use keycard technology similar to that used in hotels or offices, but the traditional building wiring in these building systems has been replaced with Wi-Fi for use in cars. Yet all the supporting network infrastructure such as controller boxes, and onsite computers still exist and have to be built in to the cars computerized systems, and to interface with the other electronic systems of the cars. These systems need to regularly communicate from the computer on site with servers in head offices, sometimes on the other side of the world. 

For example in some car-sharing self service electronic systems involving smartphones, an end-user, after they have made the booking and payments in the smartphone app, and located the car park with GPS and the app, then need to locate the car such as in a multi-storey car park, a large parking lot, or parked on the street amongst many other similar looking cars (GPS systems only give location details within around 100 feet), so they hit a button on an app, that transmits a message wirelessly (via Wi-Fi) over the air to a head office server, which then transmits a message back to the computer installed in the car, which tells the horn electronic system in the car, and the lights to flash, so that the end-user can pinpoint the exact location of the car. If this car is located in an area with bad mobile phone coverage, or if something goes wrong with all the communications, then access to the asset is difficult or denied. 

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