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Traffic Data from GPS – Unlocking the Mass Market

Nokia’s US$8 billion acquisition of NAVTEQ in 2008 heralded Nokia’s belief in a future of cell phone-based navigation devices – a future reinforced by Google’s recent release of its free live satellite navigation device for cell phones. This future should deliver large quantities of high-quality and low-cost traffic data. Twelve months on, the business model that will realize this potential has still to materialize, writes Liz Orme from Cambridge Associates

The precision and worldwide coverage of GPS is truly astonishing. It has revolutionized our ability to know where we are, and how to get where we want to be. Unquestioning reliance on these devices has led to some high-profile blunders by users, for example, HGV drivers hitting low bridges while blindly following satellite navigation device instructions and boats running aground as captains pay more attention to what is on their screens than what can be seen out of the window.

Notwithstanding these headline-grabbing scenarios, demand for GPS-based devices is increasing substantially and their accuracy has huge potential for provision of traffic information for road users, as well as providing information for planning and analysis. They also have the potential to be significantly more cost-effective than other more conventional types of traffic-monitoring equipment, as no special infrastructure is required. It can provide information across the whole of a road network, including origin and destination, all of which can be used in the development of a more fully integrated and sustainable travel network. A future in which the locational accuracy of GPS allows travelers to both optimize their own journeys – and inform others of any delays – appears to be just around the corner.

However, this seductively simple idea is not quite so easy to effect in practice. To date, the bulk of GPS-derived traffic data is from commercial fleets rather than the general public. And Tom-Tom – which should be well placed to make the most of GPS-derived traffic data – is supplementing its traffic data by using data derived from other sources, most notably from cell phone transmissions.

Fundamentally, as a receiver, although an individual’s GPS device knows where it is, this information is not available automatically to others. This means that some means of exporting the data in near real-time back to a central location is required, with the inevitable associated costs. Then there are the data privacy concerns, meaning that individuals may be reluctant to allow data on their precise location to be made available to others, especially if it is unclear the purpose to which this data, once collected, is to be put. In addition, some form of data anonymization will be required.

For fleet operators these issues do not apply and the business model is apparent. To support logistics operations there is a need to provide regular updates on the location of all vehicles in a fleet. This data can then be used to generate traffic information.

However, for the general public the issues are more complex and the business model is no longer quite so clear. In order to enable data-sharing, there needs to be sufficient value in the data to offset the costs of transmitting it back via some form of telemetry, and this value needs to be transferred to the public who are using the cell phone-based navigation devices in order to incentivize them to share the location data. The most obvious solution is for subscribers to a traffic data service to agree to provide the real-time GPS data as part of the deal. There is a high degree of criticality attached to this. Given only a relatively small number of initial subscribers, there will not be sufficient traffic data at the outset to provide the accurate travel information the subscribers need. Against this backdrop, there is no alternative but to fuse different data sources, including historic data sources, to provide the necessary data granularity – a challenge in near real-time. This will then provide the necessary travel information. Only once the subscriber base becomes sufficiently large will no supplementary data be required, a future that could be some way off.

Google’s release of its free satellite navigation software could well provide the impetus to crack this mass market, and integrated GPS is becoming a standard component in cell phone handsets. Tom-Tom has recognized the critical need for connectivity, and its HD units come with embedded Vodafone mobile communication as standard. But capturing the data will still require deals with network providers, as ultimately they control the necessary mobile phone bandwidth. In theory, network providers could even force data provision from their subscriber base through including approval for the necessary data transmission in their contracts. This is unlikely to be a palatable solution for their customer base, however. There are the technical issues that cannot be ignored. Not only does GPS uses significant battery power, transmitting the necessary signals to provide the location updates does also – information that can arguably be gathered as cell phones communicate in any case.

Although Google’s newest offering is likely to make significant inroads into the satellite navigation market – as indicated by the share price hit taken by competition such as Garmin and Tom-Tom – there are still significant barriers to capturing large quantities of GPS-derived travel data from the general public. So making the most of what is available through data fusion is the way forward – there are many options both commercially and technically to achieving this in practice and as yet there is no single business model that is a clear front runner.

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