Increasing Trust in Car Purchasing

When Liudmila Zavolokina started working on the idea of a blockchain-based platform to increase transparency and trust in the used car market, she never could have imagined that the resonance from the market would be so high. Today Cardossier is a platform, set up as a non-profit organization supported by more than 25 organizations.

Project Name: Cardossier

Missing Trust in the Market for Lemons

As in many other mundane situations, the car market is a place where the seller has a lot more knowledge about the product than the buyer has. The buyer can only rely on his or her own level of expertise or on the seller’s information. This incentivizes the seller to exaggerate on the quality of the car, since he or she would like to attain a high price for it. This makes it hard for a buyer to distinguish between truthful and untruthful sellers.

Blockchain technology can be used to add trust to transactions. This is where Cardossier comes in, it provides a platform where data related to the car sale can be saved and accessed by all stakeholders involved in the car buying process. The platform makes use of blockchain technologies, which are designed to store information in a way that makes it impossible to add, remove, or change data without being detected. This way buyers can verify the information they receive from the seller, which reduces the information asymmetry between the two agents.

Going to Market as a Non-profit Organization

Cardossier started as a dissertation project by Liudmila Zavolokina at the Department of Informatics at UZH in collaboration with AdNovum, Federal Road Traffic Agency, AMAG, AXA and Mobility  – And it raised high interest, earning the project initial co-financing by Innosuisse, the Swiss innovation agency. By now, the project has attracted more than 25 collaborators to get involved in the project, among them some big corporations and firms such as the Emil Frey AG, AutoScout24, and Die Mobiliar. From 2020, a consortium of organizations provides this platform to interested organizations.

Upon the wish of the founding organizations, Cardossier became a non-profit organization. However, the choice to make the platform available as a non-profit solution came with a number of challenges.  Before launching on the market, the team had to think carefully about how to structure the project in a way that was sustainable. The solution with member fees has proven successful at the start. However, in the long run Cardossier aims to develop a completely new data market for car-related data.

The Key to Success

Already during the early research stage of the Cardossier project, it grasped the attention of many stakeholders involved in the car buying and selling process. Still, if there was no passion and persistence for bringing the solution to the market and being well prepared for the bumpy road ahead, the project would never have succeeded. Apart from the crucial financial contribution by Innosuisse in the early stages of the project, the agency also provided a “Business concept” training where Liudmila could learn how to think and act like an entrepreneur. In addition to the close collaboration with the industry partners, she further received continuous support from her PhD advisor Gerhard Schwabe as well as UZH colleagues Ingrid Bauer, Rafael Ziolkowski and Andreas Engelmann.

Liudmila stresses that it is crucial to find the right people at the right time and put them into roles that really match their skills and competence. In the end, it is the commitment of a whole team and their passion for the idea that can successfully transform an idea into a product.