Lesson

Do not count on revenue generation from data sharing to subsidize the operation and maintenance expenses of advanced traveler information systems.

A survey of transportation agencies and private firms involved in providing traveler information services.


1/1/2002
United States


Background (Show)

Lesson Learned

The interviews with 34 public agencies on data sharing revealed that only 11 had sought to generate revenue to provide resources for agency operation. Of these 11, six felt it had been relatively successful, four said it had been unsuccessful, and one agency said it was too soon to evaluate its success. Of the six, one noted that the revenues were not significant and two indicated they had bartered the data for goods and services (e.g. a work station and a public service announcement). With one exception, the private sector was uniformly opposed to revenue sharing. The only firm found to support sharing a portion of its revenue with a public agency used that practice in an arrangement that included both data exclusivity and the use of seed funding from the public sector. Another firm that had used revenue sharing abandoned the approach because it had not proven successful.

Public agencies interested in deploying advanced traveler information systems, including 511 services, therefore, should not count on revenue generation from data sharing to subsidize these systems. The factors accounting for the failure of data sharing to generate revenue include:
  • Realize that there is little or no money to be made from selling data. Attempts to commercialize data typically lead to charging prices that are too high. The result is that demand for the data falls off very quickly and revenue to the public agency is usually very weak. Information has high elasticity of demand because people will often do without.
  • Consider the positive impacts of making the public sector data available freely. Travelers and private for-profit firms believe that because public sector data are collected at taxpayer expense, such data should be available to all taxpayers, including for-profit entities. The National Weather Service (NWS), a highly successful provider of raw data to for-profit enterprises, does not attempt to commercialize data provision by charging fees because such fee-based commercialization might inhibit the wider dissemination of weather information, thereby reducing its public benefits. In other words, a public agency can create conditions such that the private sector is serving a public mission by getting the weather or traveler information out to the public.
  • Realize that charging other agencies for data is a shell-game practice. Government commercialization has not worked because often the organizations using the data are other public agencies; therefore, financing is a shell game with the government budget and does not raise revenues from outside government. For example, the British Meteorological Office gets 70 percent of its revenue from the Ministry of Defense.

Experience shows that public sector agencies should not depend on recouping operational costs by selling traffic data. Such attempts typically generate little revenue and discourage data dissemination. Conversely, public sector traffic data made available to interested parties at no cost will spur wider dissemination of such data, often as customized information that is more pertinent to travelers’ needs. Wider dissemination of traffic conditions allow travelers to make informed decisions about their travel choices, particularly during peak hours and along congested routes. Such informed choices may include using an alternate route or avoiding the peak hours of travel, thereby contributing to transportation goals of increasing efficiency, mobility, environmental quality, and customer satisfaction.


Lesson Comments

No comments posted to date

Comment on this Lesson

To comment on this lesson, fill in the information below and click on submit. An asterisk (*) indicates a required field. Your name and email address, if provided, will not be posted, but are to contact you, if needed to clarify your comments.



Source

Sharing Data for Traveler Information: Practices and Policies of Public Agencies

Author: Carol A. Zimmerman (Battelle), Mala Raman (Battelle), William J. Mallett (Battelle), and Craig Roberts (PBS&J)

Published By: ITS Joint Program Office, USDOT

Source Date: 1/1/2002

EDL Number: 13592

Other Reference Number: FHWA-OP-02-001; HOIT/10-01

URL: http://www.ops.fhwa.dot.gov/travelinfo/resources/datashare/datshare.htm

Other Lessons From this Source

Lesson Contacts

Lesson Contact(s):

William Mallett
Battelle
202-646-7789
mallettw@battelle.org

Lesson Analyst:

Firoz Kabir
Noblis
202-863-2987
firoz.kabir@noblis.org


Rating

Average User Rating

0 ( ratings)

Rate this Lesson

(click stars to rate)



Notes

Lesson of the Month for May, 2006 !


Lesson ID: 2005-00132