HopStop Keeps its Edge in Pedestrian Navigation Despite Competition

Even for natives of busy cities, it is not always easy to know the fastest way to get around town on foot or by public transit. It would be nice to find out about planned changes to subway lines and bus routes, for example, before rushing to stops that might not be in service. That was the impetus for six-year-old HopStop, the New York-based company that offers its users door-to-door directions for biking, taking taxis, walking, and other forms of transit.

HopStop collects data from transit agencies and other verified sources to provide information on navigating the cities the company covers. The information and directions are tailored for pedestrians and transit riders, which sets HopStop apart from the many websites and apps that offer driving directions, such as Google and MapQuest. As his rivals race to catch up, HopStop CEO Joe Meyer says his company is developing new revenue streams by seeking business-to-business clients.

Users can access HopStop via the Web or mobile devices to plan their routes or look for new ways to reach their destinations. The company provides detailed, hyperlocal information that Meyer says rival services such as Google Transit have yet to match.

“We have a proprietary, patented routing engine that gets smarter over time,” says Meyer.

Though HopStop has raised $2.2 million in total funding since its founding, for the past three years the company has been growing on ad revenues, which Meyer says is in the $2 million-to-$5 million range annually. “People use us because we are helping them in their daily lives,” he says. “We don’t have to incentivize our users.”

HopStop was founded in 2005 by Chinedu Echeruo, who remains chairman of the company. Meyer says Echeruo got the idea for HopStop out of frustration with navigating the transit systems on his own in Boston and later New York. Meyer was hired as CEO in 2009 after serving as vice president and general manager for Quigo Technologies, which was acquired by AOL.

In addition to transit data, HopStop also estimates taxi fares and shows users multiple methods to get from point A-to-point B, from trolleys to buses and subways. “People are very particular,” Meyers says. “Some days they want to take the train, some days they want to take the bus, some people want to walk more.”

HopStop offers the service for free to users. Meyer says the highly localized use of HopStop lets advertisers geographically target consumers. Users voluntarily share their locations, as well as where they plan to go, with HopStop. “That’s very powerful information and very indicative of user intent,” Meyer says. “Almost every ad that we serve is geo-targeted in one form or another.” HopStop’s advertisers include Macy’s, Barnes & Noble, Dunkin’ Donuts, Gilt Groupe, and Citibank.

Meyer says HopStop also plans to pursue business-to-business opportunities that would put its technology in other companies’ apps or on their websites. That could include digital media companies, directories, location-based services, and search engine companies. He says those businesses-to-business models could include ad revenue sharing and technology licensing. Meyer believes HopStop can provide such pedestrian-based services to companies alongside Google’s driving directions. “Google doesn’t provide them the ability to geo-target ads against those searches,” he says.

HopStop provides transit information for more than 150 cities, which include 50 major metropolitan markets in the Unites States, a dozen in Canada, and overseas destinations such as London, Paris, and Moscow. Meyer says the company expands to new territory as it establishes relationships to receive data from local transit authorities. “We refresh our system based on changes we make during the day,” Meyer says. “We take scheduled [transit] outages and advisories into account. We are starting to factor in real-time outages and alerts.”

HopStop is not fussy about how it receives such data, Meyer says, which he believes helps the company maintain its edge in the face of competition from Google. He says while Google requires transit data to be submitted in a standardized format, HopStop does not. “We take the data in any form they want to give it to us,” he says, “whether it’s normalized or not normalized.”

AOL’s MapQuest and Microsoft’s Bing have also rolled out beta versions of pedestrian navigation on their websites, but Meyer says they have yet to achieve HopStop’s level of market penetration.

HopStop, which makes its app available for iPhones, Android, and BlackBerry devices, plans to release a Windows Phone 7 app before the year ends and an iPad app shortly thereafter. “Our audience is clearly stating they want our service when they are on the go,” Meyer says.

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