Transit

Google paid for NYC data (or not); Chicago removed indemnification

by Michael Perkins   •   August 20, 2009 10:39 am

New York's MTA, a much larger agency than WMATA, apparently was able to negotiate some kind of payment from Google in exchange for providing its transit data for Google Transit. Update: Google officially denied that this is true.

Chicago, whose system is closer to Metro's size, did not or could not, but they did get rid of the indemnification requirement. This information could help us understand what Metro might be able to get out of a deal with Google.

As we've discussed previously, Metro hasn't yet come to an agreement with Google to include its services in the Google Transit trip planners. Both Google and Metro have proposed licensing agreements, and up to now neither has agreed to the others' terms.

Using New York and Illinois freedom of information laws, I obtained copies of the New York MTA and Chicago CTA (PDFs) agreements with Google. Since MTA's ridership is the highest in the US, it probably represents an upper bound in what Google is willing to do for an agency. If the negotiating positions were based only on ridership, then Metro's position is more likely to be similar to CTA. Let's look at some of the differences.

The two biggest differences between the MTA agreement and Google's standard one are (1) the lack of an indemnity clause and (2) a redacted paragraph that implies that Google is paying MTA for the use of their data. CTA's agreement is almost completely the same as the Google standard agreement, except, like MTA, there is no indemnity clause.

Indemnity: According to a Metro board contact, Metro will find it difficult to impossible to indemnify Google against potential lawsuits. Google's agreeing to drop the indemnification for New York and Chicago is significant to Metro's negotiations. MTA is still liable for problems with the data, such as viruses or worms, or with ownership of trademarks, but there is no blanket indemnity as in the standard agreement. With CTA's contract, the "LIABILITY" paragraph is redacted, but there is no analagous "INDEMNITY" paragraph. It's not clear what CTA was able to negotiate, but they probably aren't indemnifying Google against everything.

License Fee: The fact that this paragraph was added to the MTA agreement and then redacted to protect Google's competitive position implies that MTA is paying Google some sort of fixed-price or percentage fee. (A per-use fee would more likely have been called a "royalty".) Someone on the Transit-Developers listserv suggested MTA was attempting to collect 10% of potential revenues as part of their license agreement. The MTA asked StationStops for a percentage, plus $5,000. Google could have agreed to a percentage, though unlike iPhone application sales, calculating Google's revenue on ads on Google Maps is more complex, and the redacted paragraph is very short. Or, perhaps they are only paying a flat rate. Update: Google insists they are not paying MTA anything.

Certainly MTA's position as the largest transit agency in the country, and one of the largest in the world, helped MTA's bargaining position. Metro's isn't nearly as big, at about 1/8th the ridership of MTA, but it's in the top five in the country and serves more than a million customers per day. It's also a popular tourist destination. These factors should help Metro's bargaining position. On the other hand, CTA operates a transit system just as large or larger than Metro. They either did not try or was unable to negotiate a license fee.

MTA also negotiated some clarifications about how the data would be used, a specific warranty that GTFS would continue to be an open standard, a change of venue to New York courts, and some other changes to make the agreement less one-sided. CTA changed almost nothing about the agreement except adding a portion about Illinois' Freedom of Information laws.

I have to admit where I was wrong. I was convinced that MTA would not have been able to negotiate a license fee. Maybe Metro will also be big enough to negotiate one. On the other hand, if CTA couldn't, then maybe it's not possible for Metro.

I think it is interesting and significant that both MTA and CTA's agreements were slight alterations of the Google agreement as opposed to an agreement drafted by MTA or CTA. In my opinion, that makes it less likely that Metro would be able to present their own agreement, even if it's modified from the current terms.

I have additional freedom of information requests working their way through Los Angeles, Boston and San Francisco's agencies.