08:51 AM

Geo Loco And Privacy - And Commuter FasTrak Lanes...

Geo-location based companies are hot, and FourSquare is the leader, it's been reported that four VC firms are battling to lead its next investment round.

A buddy of mine uses FourSquare, he's constantly checking into various bars around the East Bay, or bars at airports. Some of my Twitter and Facebook contacts also seem to like it, even though sometimes their FourSquare checkins to restaurants seem sad -- as if they are lonely or they don't want to spend all that time with just their companions.

But what happens if companies start sifting through all that location based data? And they will, ostensibly to bring you personalized commercial messages and services that will improve your life.

But there's other, more lucrative forms of data mining. What if all those bar, diner, ice cream parlor check-ins were compared with your gym check-ins? You could also use other data to see how much you walked versus drove, or used public transport.

There's a ton of health related lifestyle data ready to be mined and risk analyzed. Life insurance companies will be able to greatly improve their actuarial tables, they'll be much better at disallowing insurance or raising rates.

Geo loco could become the straw that broke the camel's back when it comes to user privacy. So far, people have had a cavalier attitude towards their data privacy and the mountain of data collected by thousands of firms. These firms privately say that people give away their privacy rights very cheaply.

But that's because people don't have a feedback loop, they don't directly see how they are affected by their low concern over their data privacy. But once they do have that feedback loop, once their insurance rates go up, or they are rejected for insurance, they will try to gain back their privacy. They will not be enthusiastic users of geo-location based services.

And people really do care about their privacy and will seek to protect it when there is a clear choice. For example, whenever I take the Bay Bridge from the East Bay into San Francisco, I'm always amazed at how few people use the FasTrak lanes -- which use an electronic transponder to wirelessly pay your toll at a discount -- you don't even have to stop.

Yet tens of thousands of people prefer to pay a dollar extra, and wait in long lines to pay their toll. Why? Because they don't want someone keeping track of their trip, they don't want to be tagged.

All this enthusiasm over geo-location based services is misplaced, imho. They will have a place in people's daily lives but they will be constrained by many user concerns over privacy.