ICO Analysis: ZeroTraffic
ZeroTraffic is offering a cryptocoin smartphone-based application to help reduce recurrent traffic congestion.
The way ZeroTraffic works is by utilizing gamification to reward commuters who travel off-peak times with the goal of reducing peak traffic volume. Studies have shown that just a 5 to 10% reduction in traffic volume can significantly reduce congestion and help traffic flow faster.
By incentivizing users to travel using alternative routing schedules, ZeroTraffic has the goal of saving users time and offering them a way to earn prizes, while also helping reduce the traffic load for everyone else.
ZeroTraffic plans to offer non-monetary incentives such as points, badges, levels, and status, while working with sponsors and media who can award fuel, product discounts, and recognition.
The benefits of ZeroTraffic go beyond saving a few hours of travel a week. ZeroTraffic aims to create the end result of an effective tool that can influence driver behaviour with very low operational costs. This is something many major cities have struggled and fail to do for decades.
If you’ve ever been brave enough to get behind the wheel of a car around rush hour time in cities such as New York City, Los Angeles, Miami, or Austin, you can understand the potential of ZeroTraffic.
On average, traffic congestion costs Americans $124 billion dollars a year in direct and indirect losses, and the number is expected to rise to $186 billion in 2030. A conservative estimate for the traffic costs in Canada are around $4.6 billion annually.
Zero Traffic utilizes a virtual transponder application (a GPS-enabled smartphone app) to calculate the metrics used for the award points people get. The parameters are based on exclusion zones, home and work addresses, and congestion zones defined by transportation authorities.
ZeroTraffic is owned by the parent company Array Systems Computing Inc. with headquarters in Toronto and Ontario, Canada.
Array Systems Computing Inc, founded in 1981, has played an integral role in the field of Intelligent Transportation Systems (ITS), and is the builder of the COMPASS software used by MTO to manage incidents on all the highways in Ontario.
The CEO and President, Stuart Berkowitz founded Array Systems in 1981 while he was a Ph.D student at the University of Toronto. Additionally, Berkowitz has a BSc in Computer Science from Cornell, and a MS in Mathematics from the University of Illinois. Berkowitz has experience operating and selling Array Telecom Inc to Comdial in 1998, and VoiceGenie Technologies Inc to Alcatel in 2006.
The ZeroTraffic platform is based on the use and ownership of ZTT tokens.
Investors with a minimum of 1250 ZTT become a “Deputy Mayor” and can buy a specific district they are able to advise the ZeroTraffic team on the congested regions.
Investors can specify the center of a circle of any size greater than ½ km radius, with the smallest circles costing 1250 ZTT (the coin which can be purchased using Ether). Investors are capable of selling the ZTT, or hold onto them to get a district dividend of up to 4% based on territory size. In a post on Reddit, the team stated that after 5 years they may even offer a buyback option at the market price.
This is interesting because it allows people to take specific ownership of improving traffic patterns in their communities; a direct incentive for the daily commuter.
The pricing for the ZTT ICO is tiered based on weeks away from the end date, with the first week price at around 250 ZTT/ETH, with the price increasing at around 26% per week and 3.6% raised ZTT in multiples of $4M.
ZeroTraffic plans to offer up to 80,000,000 ZTT in the sale, with a total maximum token supply of 300,000,000 ZTT. The minimum ZTT offered in the sale is 4,000,000.
The fact that ZeroTraffic set a total maximum token supply is a favorable quality, but 300,000,000 is a fairly large maximum token supply.
The 80,000,000 ZTT offered in the sale add up to a lofty goal of about $91,200,000 based on the Ethereum price of around $285.
The ZeroTraffic team plans to roll out its project in 12 months in four separate phases:
From the Zero Traffic whitepaper:
- Implementation phase: will last 8 months. During this
Phase, the virtual transponder application and the gamified ZeroTraffic website will be implemented.
- Evaluation Phase: planned to be of 2 months duration. The readiness of the system for release to the public will be evaluated during the evaluation phase. Updates to the virtual transponder app and the gamified ZeroTraffic website will be made as needed.
- Production Roll-Out Phase: planned to be of 2 months duration. ZeroTraffic
will be rolled out over all territories over this period. Updates to the virtual transponder app and the gamified ZeroTraffic website will be made as needed.
- Operation Phase: ZeroTraffic: will be fully operational and supported across all territories. Data and results will be collected and analyzed. Improvements will be made to the virtual app and the website as necessary.
While I do believe that ZeroTraffic is tackling a substantial problem and potentially lucrative investment opportunity, it seems that the team really does have its work cut out for them. On the basis that the ZeroTraffic team can execute everything they are aiming to, they will do a great service to their investors, commuters, and society in general.
That being said, there are a few important things to note.
- One of the greatest risks in my opinion is that the ZeroTraffic site and whitepaper constantly reference the importance of hitting 10% of commuters in order to achieve behavior modification. It seems that they’ve locked themselves into a “chicken and egg” problem, where initial users and investors won’t see the direct benefits other than a potentially beneficial change in their personal traffic patterns. Objectively, 10% is a very big chunk of the millions of cars on the road during rush hours. -2
- People may be locked into their commuting schedules. There isn’t much ZeroTraffic can influence if many people need to go to work and leave at the traditional 9 to 5 time. -1
- Lack of marketing experience on the team. While the ZeroTraffic team does have some significant firepower in building and innovating the project, I don’t see any substantial marketing force that could help them reach massive user adoption. -3
- The history of the parent company is mainly linked with providing software solutions to government institutions, and the government adoption route can be an incredibly red-tape laced process, especially for a Toronto-based company trying to tackle traffic in some of the most densely populated cities in the United States. -3
- The use of non-monetary incentives for commuters might be slightly on the idealistic side. The whitepaper claims that the gamification aspect of offering points, badges, levels, status, etc will be “addictive like computer games because we will seek to put users on a dopamine treadmill.” While this may be appealing to some users, ZeroTraffic needs user adoption on a much more massive scale and the preference for non-monetary rewards could be a bit overemphasized. -2
- I’ll be the first to say that I absolutely abhor traffic, and I’m far from being the only one. It’s an antiquated dinosaur approach to work commuting and is reflective of one of the biggest inefficiencies in society. It’s not only an issue limited to a handful of countries either. Traffic is a global nuisance. There has also been extremely limited efforts to change this by government agencies. We’ve gotten to the point that entrepreneurs such as Elon Musk are planning to dig underground tunnels just to minimize the problem in select cities. That’s why the growth potential for ZeroTraffic is huge. +3
- Although the huge maximum token supply of 300,000,000 ZTT makes me a bit uneasy in terms of capital gains, I like the idea of a 4% annual dividend based on territory size. +3
- If executed properly, the gamification aspect can be a gamechanger. ZeroTraffic essentially provides commuters an interesting incentive to travel at a different time, and it gives investors the opportunity to own a small district and take a small piece of responsibility for their community. +3
- I’ve yet to see any schematics of the app, but from what I’ve read in the whitepaper it sounds like it’s going to be a very user-friendly “set and forget” sort of app. It also utilizes the fact that nearly everybody has a smartphone, and aims to modify user behaviors using this at an extremely cost effective rate. +2
- It could save governments a ton of money. Building roads and using tolls is an extremely expensive and unpopular way to deal with the increase of traffic. The ZeroTraffic team also has experience in dealing with government institutions. +2
We arrive at a +2 of 10 for ZeroTraffic. The concept, team, and massive traffic problem they are looking to tackle give ZeroTraffic a ton of positive points. However, at the other end of the spectrum, there are a lot of things that the team has to execute in order to achieve substantial success.
The ICO ends in 22 days. To see more details on the ongoing sale, go to https://www.zerotraffic.io/crowdsale.