The NextBus Flap: A Tilted Playing Field for iPhone Apps? (update)

Update (Aug. 19, 3:15 p.m.): SF Appeal has more or less wrapped this story of lameness up. MTA and Apple have both told NBIS to take a hike, and don’t let the door hit ya … Oh, and now that Routesy is live once again, we’ll be finishing up our review and posting it soon. It was cut short as this whole brouhaha went down.

Original post (July 10): Once upon a time, in the not-so-distant past, Ken Schmier and Alex Orloff at NextBus Information Systems (NBIS) got in a fight with Steven Peterson of Routesy. Who are these people? What’s NBIS? Where’s my bus? Good questions.

So, here it goes. We’ve all seen the bus-arrival data flashing at us from bus shelters across town; many of you have probably gotten it on your cellphone. But the matter of who owns this data and who can use it recently became a hot debate when Peterson, the developer of the iPhone app Routesy, got into a disagreement with NBIS, the company that claims to have rights to that sometimes-accurate information flashing at you from the bus stop and on the interwebs.

Oh, and when we say “NBIS,” that is not the same thing as NextBus, Inc.

I know.

NextBus, Inc. = Michael Smith, whom we interviewed in March, and other engineers and problem-solvers who work to fix things if something goes wonky with the prediction data. The engineering know-how and software for this service is owned by NextBus, Inc., though the hardware (the signs in the bus shelters) is owned by the SF Municipal Transit Agency (Muni, DPT, and more!).

NBIS = Ken Schmier and Alex Orloff, who claim they have a years-old contract allowing them to make money off the prediction data provided and distributed byNextBus, Inc.

NBIS says this data is theirs to license and, therefore, to capitalize on. That means developers can’t go taking it willy-nilly for iPhone apps unless they strike a deal with these guys. But wait, Muni says that’s preposterous, and that they own the data (thereby making it public). Peterson just wants to use the damn data for Routesy, a bus-arrival-time iPhone app he designed that is apparently one-billion-and-a-half times more user-friendly than the NextBus website (which is actually fine, as far as this BlackBerry user is concerned). NBIS, meanwhile, sought and was granted a shutdown of the app from Apple, the oh-so-awesome distributor of life-changing apps via its App Store.

To complicate matters further (because, well, why the hell not?), iCommute, another iPhone application that also uses NextBus data, has successfully entered an agreement with NBIS. This means iCommute was able to strike a favorable deal with NBIS to license the data, and can therefore use the data for their application. Peterson, citing iffy documentation of the NBIS claim of ownership over the data, has been unwilling to enter into a similar agreement with them.

Kelly Beener at iCommute, as well as Orloff and Schmier, told Muni Diaries that the royalty of $1 per application sold was part of the terms of the agreement. They did not disclose any additional terms and conditions. But Peterson, citing emails from NBIS, said he was quoted a licensing fee in the neighborhood of “tens of thousands of dollars” per month.

Some of you may have noticed some goings-on in the news (SF Appeal and SF Weekly, to name a few), as well as in the Twitter realm, about this issue. As it continues to simmer at a low boil (for now), I certainly don’t expect everything to be hunky-dory. Muni might have asserted that the data is theirs (and by extension, the public’s), but I’d be very surprised if NBIS went off quietly into the night.

This important issue could be described with any number of cliches: a David-and-Goliath throwdown, a dirty-capitalists-versus-small-town-app-developer fight, or just a plain-old legal mess. Though much has been made over the “well, whose data is it??” issue, I think it boils down to the question of access and ownership: Sure, Muni has asserted ownership of that data, but NextBus, Inc., still generates this data for the bus stop marquees, its own website, and mobile apps. And, try as I might, it’s still hard for me to figure out how and why NBIS fits into this picture of ownership. There’s some sort of mind-fucky distinction between all these realms, which is partially why it’s hard to think this will end neatly.

The bottom line is that any barrier to accessing technology like public-transit arrival and prediction information should be low enough to create a level playing field. It doesn’t have to be free, though that would be nice. Ultimately, we’re talking about access to “public” information. Unless of course, you disagree (and some seriously do) that the information is public. (Told you it was mind-fucky, didn’t we?)

A one-dollar royalty on every couple dollars made by apps like Routesy and iCommute seems reasonable. I certainly wouldn’t want the brains behind the technology (which sounds like NextBus, Inc., to us) to get the shaft. But tens of thousands of dollars in up-front, pay-to-play money? Not so much. And who is entitled to the $1? Damned if I know, and it’s probably going to involve a lot of lawyers to help make that decision.

I wish iCommute, Routesy, and every other app developer in the pond the best of luck. Some of you out there are small-time programmers who thought an app for x, y, or z would be pretty cool. As a day-jobber myself, I understand what it’s like to have a pet project you really hope will have a positive impact on people in the long run. And I couldn’t imagine Muni Diaries turning into a big legal mess, when all it started as was something kind of cool to do on the side.

Stay tuned …

Full disclosure: Muni Diaries has reviewed the iCommute app. And if Routesy hadn’t been yanked offline, we’d have our review of it posted as well. For now, we eagerly await its return.


  • RachaelL

    I want Routesy back. I got iCommute after your review before the new Routesy came out, but once it did I switched back because I found it more convenient and easier to use (for my usage patterns). I actually (shudder) used the NextBus website (which I find to be horrifically bad user interface design) this morning …

  • things I’m dying to know:

    * what was the conversation between NBIS and Apple like?
    * are MTA and NBIS talking now? what about?
    * when the hell is Steven going to be “allowed” to sell Routesy again?
    * will NBIS eventuall go off quietly into the night? please?

  • From a business standpoint, I can see why NBIS would want rights to license the data. Is the city funding the collection and generation of the bus prediction data? Bus prediction data doesn’t fall out of the sky. From what I understand, to generate bus prediction data, someone has to manage the GPS trackers on the buses, communicate with Muni daily to make sure everything is going smoothly, maintain data on the servers, etc. If the city is not funding it, somebody has to.

    Could this problem have been easily solved when the city signed a contract with NBIS? I wonder if the city could have negotiated open data access in the contract. This could have ensured that there is a level playing field for people who want to use this data, and therefore providing San Franciscans with the best possible choices of apps and other services.

    • Oh, I definitely agree that a royalty of some kind is in order. I’m just not convinced NBIS is the party to get that royalty; it seems like all the brains and data-generation/engineering is on the NextBus, Inc. side, to me.

  • Rick

    Man, what a mess. Here’s what I understand about the situation, in a nutshell:

    1. Muni has a contract with NextBus, Inc. for the arrival prediction services you know and love (most days :)).
    2. Some time in the past, NextBus, Inc. signed an agreement with a separate company — NBIS — and gave them exclusive rights to all prediction data generated by NextBus, Inc. (Or at least this is the claim being made by NBIS. AFAIK it hasn’t been corroborated by NextBus, Inc.)
    3. Muni has never entered into business with NBIS.

    IANAL, but it sounds like NBIS can’t be right. Or, if they are, and they really do have “exclusive” rights to the data, then even Muni should be paying their licensing fees. More likely NBIS knows that’s not the case, and they’re going after the little guys specifically because the little guys don’t have the time/money to take NBIS to court. If they tried to enforce their “rights” against Muni they would lose in court and they wouldn’t have any revenue at all.

    PS. I have Routsey, but I’m sorry I bought it. It crashed every time I tried to use it. It’s since been deleted.
    PPS. The NextBus mobile site works great. I have a few of my regular stops bookmarked on my iPhone. Any other stop is just a few clicks away.

    • Rick, it’s my understanding that NBIS is the former parent company of NextBus, Inc. It’s also my understanding that a) NBIS entered into contract with MTA originally, and that b) NBIS has since sold NextBus, Inc., to Gray Island. Again, just one lame brain’s grasp on the mind-fuck.

      • Maybe this will help; it’s from Michael Smith of NextBus, Inc. was nice enough to confirm some facts for us. It certainly helped me out!

        *NextBus Inc is indeed a separate entity from NextBus Information Systems (aka NBIS).
        *NextBus Information Systems did not own NextBus Inc. When Grey Island purchased NextBus approximately 4 years ago the original owners kept the name NBIS and so NextBus Inc was created as a new and separate entity. I cannot comment on what rights to the data that NBIS claims.
        *The installed hardware including the trackers and signs are owned by SF MTA. But the engineering know how and software is indeed a product owned by NextBus Inc.
        * The information is indeed generated by NextBus Inc.

        • Rick

          These points look the crux of it:

          *NextBus Information Systems did not own NextBus Inc. When Grey Island purchased NextBus approximately 4 years ago the original owners kept the name NBIS and so NextBus Inc was created as a new and separate entity. I cannot comment on what rights to the data that NBIS claims.
          * The information is indeed generated by NextBus Inc.

          So the timeline is something like this?:

          – NBIS is owned by Entity X
          – NBIS enters agreement with Muni
          – NBIS is sold to Grey Island, but the name “NBIS” is retained by Entity X
          – sold company is renamed NextBus, Inc by Grey Island
          – NextBus, Inc. continues generating new data for it’s customers (including Muni)
          – NBIS claims ongoing rights to data being generated by NextBus, Inc.

          I think I understand the NBIS/NextBus/Muni relationships now, but the situation doesn’t make any more sense.

          The fact that NextBus “cannot comment on what rights to the data that NBIS claims” seems to support my theory that they aren’t confident in their interpretation of whatever agreement they’re banking on. (An agreement that now looks like it was probably part of the terms of sale to Grey Island.) Again, if they had clear legal rights here it would be in their interest to produce the agreement and end any speculation.

        • I believe NBIS might have supplied more information to Steven Peterson (Routesy), though in his opinion, the documentation was pretty iffy.

          For me, it comes down to the fact that the brains behind the operation appears to be NextBus, Inc., so I feel like any royalty should be granted to them for their knowhow.

        • Ah, actually, Steven said NBIS didn’t provide any documentation with their claims, and NB, Inc. wouldn’t confirm the legitimacy of the claims, either.

  • Thanks for the coverage, Tara. I highly recommend that people listen to the story from the mouths of all involved. Here’s a link to a podcast that explains all of the arguments from all of the parties, myself included, first-hand, and a reading of some of the text from the SFMTA contract:

    To be clear, if NextBus, Inc. or Muni asked me to pay them a fee, I would have easily negotiated with them. However, when Random Party X (NBIS) comes on the scene and says “Hey, you have to give us money!” my response (a quite logical one) is to say, “Okay, show me the agreement that says you own it.”

    So far, NBIS has refused to provide any documentation. You can hear Mr. Schmier’s response to a request for the documentation on the podcast link I posted above.

    As for the request of thousands of dollars, that was made back in the Fall when they had bigger dollar signs in their eyes. After they realized that no one would pay them that much money for publicly accessible data, they switched strategies and came after me again this Spring with the $1 per download offer. iMuni and iCommute were duped into entering such an agreement, but I refuse to sign a contract with NBIS when the City of SF claims that I should be free to use the data, and they’re the ones with the public contract.

    • If they playing field for app developers is level, we’re a-ok with that. Whether it’s because iCommute and others got suckered into paying a royalty or what, something is amiss.

      I still don’t understand how the brains behind the operation (again, NB, Inc.) does not get any proposed royalties from app developers for using their technological know-how.

  • benson

    Try this on for size.

    NextBus would not have been funded for full Muni rollout had not the tax payers passed Regional Measure 2, which made bond money available to build out the system. To the tune of millions and millions.

    This taxpayer money was funneled to Muni through RM2 distribution processes.

    Why then should not Muni and by extension the public own the rights to this prediction data? Next Bus, Inc. owns the technology and software which they created, but why should a third party own rights to data coming out of that system when you, the taxpayers and Muni riders, paid for the whole thing to be enabled in the first place?

    • What makes this story even more interesting (and most of why we felt we had to chime in) is the fact that this other app developer (Apptight, who created iCommute) played NBIS’s now seemingly shady game. They struck a deal with them, and their app survives. There seems to be a whole lot of “gray area,” and I suppose we’re all in a holding pattern until that’s all made black-and-white.

      I think one of Tara’s points in writing this post was that perhaps some of the parties involved (app developers, NB Inc, who compiles and distributes the data) deserve some sort of financial compensation for their efforts. Perhaps. We are talking about information pertaining to an agency owned by the public. I’m sure there are analogies here to draw with other public agencies. I wonder how those situations have played out.

      It would be a guess, for sure, but what seems to be going on is that certain entities saw an opportunity to cash in on a product they were once affiliated with. Whether they’ve got the legal authority to do so is what remains to be seen. If so, shame on whoever at SFMTA signed that contract with them on our behalf. I didn’t go to law school, but I’m pretty sure I would’ve smelled that rat a mile away.

      As to the question of whether the data produced by a public agency should be free, yes. of course it should. And it is. is a perfectly reasonable alternative to any mobile application out there. I just happen to believe (what a capitalist I’ve become!) that developers like Steven Peterson have the right to charge for their wares (and Routesy is essentially a really pretty, well-behaving version of, and to sit back and let the market decide whether his price is too high. Here’s hoping we soon get back to that situation.

  • We at AppTight, developer of the application iCommute-SF, would like to share our perspective on how we came to terms with Nextbus Information Systems and why we feel it is a proper and fair agreement. AppTight was founded by 3 long time veterans of the software and mobile industries and upon founding, our first task was to decide on an initial project.

    Being San Francisco residents and active riders of the Muni system, we were familiar with the prediction services and knew we could create a useful application to provide a better mobile interface to access the data and add additional functionality enabled by the iPhone’s integrated features, such as the GPS. As has been reported many times so far in this saga, we too were unable to cipher out exactly who owned what in regards to data ownership or publishing rights. But, based on our experiences and familiarity with such legal matters, we were very well aware that once we launched we might be hearing from Nextbus and/or Muni.

    Sure enough, within a week of iCommute-SF going live on the App Store, we received an email from a company called Nextbus Information Systems (NBIS) stating their position and asking us to contact them. Having expected this, we phoned them directly and set up a meeting that same day. We then met with Ken Schmier and Alex Orloff, the CEO and COO of NBIS. During the course of this meeting we learned much of the history as to how the system was created, the histories of the various companies involved, who they were and why they had the right to receive compensation in return for our republishing the data via our iPhone application. It was, and still is, our understanding that NBIS owns the mobile distribution rights to the prediction data being generated by the Nextbus systems.

    To us at AppTight, this was good news. We were certainly capable of continuing to access the data in the manner we originally engineered, but by having a direct and mutually beneficial relationship with NBIS, we could get our data feed directly from the source and thereby have the best chance of providing consistent and reliable prediction data for our users. Any changes or updates to the system would now be openly available to us and vice versa, we could provide NBIS with helpful insights and recommendations on how to improve things from their end. To these ends, we agreed to a non-exclusive licensing agreement that positioned us as an official licensee of the data in return for $1 per application sold. It is also our understanding that Nextbus, Inc. also receives a share of the royalty revenue stream paid out by NBIS. These terms were established with the understanding that they would also be offered to and enforced upon any other existing or future applications that republished the prediction data via mobile devices. We later learned from the media and NBIS that the terms were accepted by iMuni as well, but rejected by Peterson for his Routesy app.

    We’ve closely followed the progression of this controversy and understand why it is that there are so many differing opinions and why people can have such differing convictions as to who has what rights as it’s a lengthy history with many revisions, contracts, acquisitions and tranfers. That being said, we are quite happy with our relationship with NBIS and feel that it ultimately achieves the best possible service for the consumers. Being non-exclusive means will we continue improving the features of our app in the spirit of competition with other developers. And having a direct and mutually beneficial relationship with NBIS will keep the data feed consistent, reliable and up to date.

    And finally, contrary to reports otherwise, the prediction data is still and will remain to be totally free to those who choose to access it via the existing services as provided by Nextbus, Inc. on their website and other channels. Data republishing rights are not a new issue and in this particular situation regarding NBIS, Nextbus and Muni, we’re confident that NBIS is acting in good faith and in the best interest of all involved.


    The AppTight Team

    Happy Commuting!

  • james

    has anyone else noticed that google must be paying for access to that data too? when you use google maps on your iphone and ask for directions, click on transit as a route option. it shows you the nextbus info for that train or bus, depending upon what it suggested for your route.

    very cool!

    • Interesting point. It does look like Google is accessing the data; however, there’s nothing on that would indicate they have a license or that NextBus, Inc. or NBIS own the information. I’m not suggesting Google is evil, as is in fashion these days. But you’re right — it presents yet another wrinkle to an already-complex story.

  • jane

    it looks like google is presenting the bus schedule, not the real-time info

  • Austin

    Google is not using any predictive data. They are just going by the bus schedule, which is why they are ALWAYS wrong.

  • Jeff Reddy

    NBIS doesn’t pay NextBus, Inc. anything.

  • From everything I’ve read (and I admit I love and rely on the Routesy app) NBIS is only becoming a player in this because Apple doesn’t require any justification or investigation before blocking or pulling an app over a dispute. If Apple procedures required a complainant to justify their infringement complaints, Apple would have seen that NBIS’ claim doesn’t hold water. Apple, completely reasonably and understandably, doesn’t want to get involved or become arbitrator over the gazillion app applications it has to manage (as Apple is failing in the basic approval and review process as it is).

    However, NBIS doesn’t generate or distribute this data in any shape or form, yet claims they should be paid by anyone who uses data generated, maintained, and freely distributed by an unrelated party (i.e. NextBus, Inc., who is paid to do so by the SFMTA), or else they (NBIS) will take action to prevent such apps from being available via Apple’s app store.

    This looks to me like extortion, an unfortunately some of the new apps have caved to their demands.

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