50,000 people are chartering busses through Skedaddle every month. Now the company wants to use blockchain technology to disrupt the gig economy.
Skedaddle, a New York-based bus chartering service that allows anyone to create a route and find other riders, is launching an Initial Coin Offering, or ICO, in January to fund a side project that aims to eliminate tipping in the service industry.
The "Kudos Project" will run on the Ethereum blockchain, allowing customers to rate any transaction they make, Skedaddle co-founder and CEO Adam Nestler told Business Insider.
Those ratings, for anyone from your Uber driver to restaurant server to grocery supermarket cashier, are then instantly published to a decentralized database that allows anyone using the system to see the ratings that then follow an employee from one job to another throughout the full gig economy.
They also function as a "reward" for the worker in lieu of a tip. Unfortunately, those rewards will only work within the Kudos system. So to completely replace tips, the project will have to reach meaningful scale, something Nestler is convinced is a very real possibility.
"We think this will be the first cryptocurrency for real world use," Nestler said in an interview. "This is a massive opportunity to completely take down Yelp and Facebook reviews, while completely eliminating tipping."
For now, the service is limited to Skedaddle — which is moving about 50,000 people each month, Nestler said — but the company is in talks with tech companies like TaskRabbit and rideshare operators, to quickly expand once live.
The ICO will officially launch to the public in January and and raise up to $20 million to fund development as well as marketing efforts to entice other businesses to join the project. $6 million has already been raised, mostly invested by many of Skedaddle’s original backers.
ICOs have been a hot topic in Silicon Valley and on Wall Street this year, with over $2 billion raised since the beginning of the year. The boom is "just a lot of noise," Nestler says, but regulators around the world are worried scammers are taking advantage of the sudden rise in popularity
Securities regulators in the US and abroad have warned that ICO investments are high risk and unproven, Business Insider’s Oscar Williams-Grut reported last month. Still, Netsler is unfazed.
"There’s certainly a bubble," he said. "The rush is frustrating, but the market is becoming more mature."
Note: This story has been updated to reflect Skedaddle's average monthly ridership of 50,000 passengers.