Zimmerman and Linton on innovation

At Thursday’s Metro Board meeting, issues around open access to data arose twice, once around NextBus and once around schedule data and Google Transit. Both times, Board member Chris Zimmerman of Arlington advocated for Metro to take an encouraging stance toward innovation, while alternate Board member Gordon Linton of Maryland suggested Metro should limit access to information until and unless they can work out legal contracts to protect potential future sources of revenue.

This is a complex issue spanning two related but separate topics. First, should Metro do a deal with Google, a big company that might make some money from ads while riders use its service? Second, should Metro enable other, smaller developers to create applications, whether or not they make money? The issues are related and, more importantly, often get tangled up with each other. Today, I’ve transcribed the debates at the Metro board. In upcoming days, I’ll boil down the key arguments and explain why Linton’s point of view misses the forest for the trees.

First, Metro staff presented the NextBus summary we discussed last week. Zimmerman asked whether Metro can allow developers to build innovative tools using NextBus data. The exchange begins at 1:14:48 in this audio stream.

I’m told that there are bars in Portland, Oregon where they have digital displays, and you can be sitting there right up until the streetcar is coming so you can run and catch the streetcar. We heard sometime last year about something in Chicago, an application that can call your cell phone [when your bus is coming]. These were being done by outside third parties tapping into the information and making it more generally available. Can we do that here?

Staff replied that they weren’t sure, but would look into the possibility. Zimmerman continued,

To the extent that we can leverage this to increase the communication out there, increase the accessibility of the system, that would increase awareness. All the people who aren’t using the thing say “What’s that?” and “That’s cool!” and you could pick up customers that way.

Linton spoke up to point out that there might also be licensing issues. But should licensing issues prevent any progress? Zimmerman:

While it’s always good to be looking for how we can make any revenue we can to offset the cost of subsidies and fares, it would be a shame to get ourselves so tied up in what might not be a significant revenue stream that we miss the larger thing. Getting a customer on that pays a fare to fill a bus that’s not full could be worth a lot more to us, potentially.

Many of of these kinds of applications aren’t making a lot of money for anybody. One example that I heard of is some graduate student; basically it’s a hobby. They do i for fun. Somebody sometimes money and a lot of them don’t. Our fundamental biz is transportation, and to the extent that we can do that better and get more customers, that’s where our emphasis ought to be.

Linton, a former FTA administrator and now private transportation consultant, didn’t agree.

That is our fundamental business, but we don’t have that business unless we have revenue to support it. My experience has always been that we tend to underestimate and overlook the revenue implications of this. When we were looking at the idea to have car rental services, I suggested that we explore it and what I heard was that this was a service that we provide to our users. Just by exploring it we found that there was revenue.

We always need to look and not assume that just because you provide a service that someobdy’s not generating income. And since I am on the other side of this equation I know how people are out there generating income. Transit agencies I have supported for my entire career are always begging for money, but do not value their resources, and others do who are lining their pockets.

Zimmerman:

I would point out, though that your example is instructive. You’re talking about car sharing. When we started that we just provided the space, and we didnt get any money back. More recently, we have been able to make arrangements that do provide us some money back, but when they first walked in here to do car sharing, there was no money to be made. Nobody was making anything. It was important to get it seeded and started to a point where someondey is making money and we can share in it.

If nobody is doing it then nobody is making any money on it. It’s very important to protect our long-term interests. But again, if it doesn’t get started, if it doesn’t happen, then there’s no value created. And I think we need to find a way to get these things started. In the long term if there is a flow of revenue that’s significant, we should be tapping some of it. But this won’t happen if we don’t help stimulate it in the first place.

Linton:

It’s not a matter of not starting it, it’s a matter of how you structure your deal. [It’s fine if] the deal allows you to get the revenue that’s generated, recognizing that for startups there’s no revenue. I created public-private partnerships when I was at the FTA. They create a structure for innovation but at the same time recognize that at a point of innovation when we have a spinoff and rev starts to be generated, you should therefore start sharing in the revenues at that time.

Next: The debate over Google Transit, a few hours later.