Chalo knows where your local bus is. Is that okay?

In 22 Indian cities, an app called Chalo has been tracking local buses using GPS trackers, providing a service that is crucial for India’s traffic-clogged cities — showing riders when the next bus is coming.

The bet on Chalo is undeniably attractive — bus tracking and digital ticketing could be key to the future of public transit in India. Firms like Ola and Uber are unlikely to eternally burn their capital on subsidizing rides over the long term, even as automobile sales slow and inflation soars. The result: a surge in demand for public transit among a group of users who want better predictability and (possibly) digital payments.

If that sounds like an interesting bet, institutional investors agree. Chalo is valued at $365 million, and reportedly wants to be worth $800 million. It raised $14 million this April, as Entrackr had exclusively reported, and $40 million last September. It also acquired the scooter rental firm Vogo for last-mile transport (that is, after users get off at their bus stop). There appears to be legitimate promise and interest in Chalo’s idea.

That said, the company’s business model raises a key concern: should the tracking data of public buses — a potentially valuable and important public resource — be restricted to one company? Because that’s what Chalo requires from bus operators it ties up with.

Public transit is a crucial part of the economy, especially in a lower-middle-income economy like India. With generally unpredictable scheduling and patchy service in many cities, having more information in the public domain about bus operations is a critical evolutionary step in the technology of public transit. But this role is being filled by a venture capital-backed startup that potentially monopolizes data in the public interest — even as it expands to more and more Indian cities — and that may not be in the best interests of riders and the ecosystem.

The company’s standard operator agreement has a telling requirement: “Operator agrees that ownership of Data and all rights to usage of Data lie solely with Chalo. Operator agrees not to disclose Data to any third parties without the explicit written consent of Chalo. Operator also agrees to never request Chalo to disclose Data to any third parties.”

And bus operators appear to be complying with this requirement. When Entrackr requested a copy of tracking data gathered through Chalo’s GPS devices on Chennai’s 3,454 buses, the Metropolitan Transportation Corporation declined to provide this information, saying that “Information including commercial confidence, trade secrets or intellectual property” that can harm a company’s competitive position cannot be disclosed under the Right to Information Act.

This position that Chalo is fulfilling a commercial role is interesting, as the MTC admitted to Entrackr that it has not paid the company any money.

Some bus operators provide bus tracking information publicly, allowing any company to access this data in real-time. Delhi’s Transport Department, for instance, offers tracking information for some buses in the capital, and when it announced a tie-up with Google Maps for displaying this information, it invited other companies to also leverage this data. Chalo’s business model precludes this sort of openness.

None of this is to say, of course, that private companies should not make money from public data.  Take airlines for instance: flight data is made available publicly thanks to air traffic regulations around the world. But there are still sites like FlightAware that make this data available and add value to it, like using historical data for estimated delays. They monetize publicly available data, but they do not lay exclusive claim to it.

In an interview with Entrackr, Chalo co-founder and Chief Marketing Officer Dhruv Chopra defended the way the company approaches its bus tracking business.

“The government doesn’t run buses in India. If you zoom out, 70% or so of the buses are privately run. These are private operators, and we have direct contacts with them” in addition to contacts with public transport authorities like Chennai’s MTC, Chopra said. “We are all in favor of an open data policy, and there are many countries around the world that have shown good examples of how to go about executing such policies as well.”

Chopra further explained that “the operator’s data belongs to the operator” and that Chalo’s implementation of technology “doesn’t modify the rights of the operator in any way whatsoever.” (While the standard Chalo contract linked above seems to require that data not be shared, Chennai’s MTC did say that this information is “exclusive for [Chalo] and MTC only, and can be shared with Government Agencies only.”)

Nevertheless, Chopra held firm on opening up the data to other companies. “There are cost implications” to the company’s bus tracking information — information collected from devices Chalo paid for and installed at its own cost — being available to other companies, he argued. “Open data does not mean free for all data.”

Chopra cited police access to bus data as a form of valid open data sharing, but said that making data available to other companies would be against the firm’s business interests.  (Chalo makes money via increased ridership in bus routes that can be attributed to the company, Chopra said.) This argument is especially compelling in the case of the private operators — some cities have hundreds of them, Chopra said — who might be harder for the government to impose tracking systems on and distribute the data. This is where Chalo’s business incentives could help cut some of the red tape and smooth over the operational challenges of negotiating with and onboarding private operators charged with public transit.

The company does appear to be engaged in a decent amount of good faith problem-solving, but at the end of the day, it is a private company leveraging data that may more appropriately be collected and distributed by public authorities — public transit is, after all, not the kind of service that is generally operated for private profit.

The same could, of course, be said for private bus operators that dominate most Indian cities — for one reason or the other, most cities don’t do what Mumbai and Chennai do, which is fully own and operate the buses that commuters travel in.

This systemic privatization of a public service is arguably what led to the breakdown of predictability that Chalo is offering the public a means to navigate. It’s worth wondering if the company’s business model would even exist if public transit were well-funded enough to be tightly regulated, punctual, predictable, and capable of offering tracking services without first needing to be subsidized by private equity, which never comes without strings.