Uber
might be dithering about accepting Bitcoin payments, but an Indian car
sharing firm has taken the lead. It claims to have raised $10 mln in
funds, accepts cryptocurrencies and is planning an ICO.
Drivezy takes the leap
A self-drive rental firm in India,
Drivezy, has raised $10 mln in a combination of debt and equity from
American and Japanese investors, including Axan Partners that have
invested $5 mln for an equity stake in the company.
The company has a fleet of over 1300 vehicles in four cities in India.
The CEO and Co-founder of Drivezy, Ashwarya Pratap Singh, said:
"Considering the rising cost of important assets and resources such as housing and transportation, I believe the future is a shared one. With the growing popularity of Bitcoin in India, we feel that this is the right time to open ourselves up to alternative means in the sharing economy. This ICO is a part of our vision to leverage the power of Blockchain to build an open, secure and transparent technology to globalize the Indian car sharing marketplace."
The regulatory angle
An Indian firm planning an ICO raises several questions,
primarily because cryptocurrencies operate in a grey area in India.
Unlike regulators in the US, China or even Gibraltar, regulators in India have remained largely silent. So it comes as no surprise that the ICO of Drivezy will be launched in Japan
and open to accredited investors only. That way, Drivezy can stay clear
in case Indian regulators come out with sweeping regulations against
crypto tokens in India.
The volatility question
One of the biggest problems with merchants accepting
Bitcoin is the question of its volatile price. Drivezy has tied up with a
payment processor, Unocoin,
to manage this risk. While its customers might pay in Bitcoin, Drivezy
receives the rupee value of those Bitcoins and is protected from
volatility. This also means that if you have to get a refund, the amount
of Bitcoins might be less/more than the Bitcoins you paid initially,
depending on which way the price of Bitcoin has moved.
Why doesn't Uber accept Bitcoins?
Smaller firms like Drivezy have much more flexibility to
take decisions like accepting cryptocurrencies for payment. For large
companies like Uber operating in multiple jurisdictions, the decision is seen to be more difficult.
They have to ensure that they have a comprehensive policy
about accepting cryptocurrencies and ensure that regulators are on
board.
The incremental benefits of accepting Bitcoin are also
smaller for companies like Uber, as their existing customer base is
large, and cryptocurrency users are a niche community.
