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Geolocation on Steroids

[Reading Time - 3 minutes 3 seconds]


Because mobile devices with global positioning system (GPS) capabilities typically support geolocation, or the process of identifying the geographical location of the device (and the person carrying the device), this has opened a new area of functionality for mobile users. For example, using these "location services" a user can be sent a coupon whenever they come near a restaurant in order to persuade them to stop in. The world of security banks are expanding the use of geolocation to help reduce bank card fraud. When a user makes a purchase at a specific store, the bank can immediately check the location of the cell phone. If the cell phone and the bank card are in the same place, then the purchase may be considered legitimate. But if the cell phone is in Nashville and someone is trying to make a purchase in a store in Tampa, then the payment may be rejected. Geolocation can also help prevent rejecting valid purchases, and one credit card issuer says that this can reduce these unnecessary declines by as much as 30 percent.


But now the use of geolocation has expanded dramatically. Instead of just tracking the location of a single user, geolocation can be used to identify the location of large masses of people and then make inferences and decisions. This can be called "geolocation on steroids."


Consider this actual event. Earlier this year Chief Executive Elon Musk of Tesla said that the car maker would work "around the clock" in order to increase the production of its Model 3 sedan. But how could you know for sure? The Thasos Group decided to find out. And who are they? Thasos is a company that specializes in gathering data through geolocation and then selling that information. Thasos put a circle around the 370 acres of Tesla’s factory in Fremont, CA, on an online map. They then tracked the "pings" or smartphone location signals that came from that area. Sure enough, Thasos found that the number of pings from Tesla employees carrying smartphones increased by 30 percent on the overnight shift. This was a sign that Tesla production was indeed ramping up.


Thasos then sold this data to its hedge-fund clients (it's estimated they pay up to a $1 million for this information), who could then purchase shares of Tesla stock before everybody else knew for certain about the production increase.


And how was Thasos able to monitor the pings from the Tesla employee smartphones?


Thasos gets data from about 1,000 different apps that users have downloaded onto their smartphones. Many of these apps must know the location of the phone in order to be effective, like giving a weather forecast or driving directions or the location of the nearest gas station. In the smartphone app's "Terms of Service" agreement the users have approved the use of location data--and also its sale to companies like Thasos.


Thasos currently offers a range of "Customer Visitation Products" for sale. These include the number of customers each day that visit specific retail stores, restaurants, hotels, theme parks, and malls. They also provide data for manufacturers, airlines, hospitals, and other companies such as the number of deliveries received, passengers who came to an airport, patients who walked into a clinic, and even the hours worked by employees. And they can generate their analysis in creative ways. For example, Thasos says that they can gauge the drilling activity of a certain oilfield by watching the size of crowds at local bars in the area.


But the data gathered is much more than just a count of who went to a store. Consider the data Thasos sells about malls. They can analyze a visitor's household income, the distance traveled to the mall, if they are tourists and where they come from, the number of visits over time, the length for each visit, and the names of other stores or properties visited. They can do this by identifying the census block where each smartphone "spends the night." Thasos even says they can "identify opportunities by analyzing the same information for customers who never set foot on those properties."


This type of geolocation data, of course, can be used in a very positive way. When Hurricane Florence barreled towards the Carolinas back in September Thasos watched evacuation zones. They found that in "well-to-do census blocks" about 1/3 of the people stayed behind to ride out the storm, while in poorer areas almost 2/3 stayed behind. This information could be used for disaster response teams. Yet it could also be used by insurance companies who sell homeowners insurance.

"Geolocation on steroids" is one way to describe how companies like Thasos and others are using our smartphone data. It's also a taste of what we face in the future regarding our privacy.