What future for location based services?

Large numbers of drivers in the San Francisco Bay Area avoid "FasTrak" wireless toll paying systems because of fears over data privacy...

The VC community is very keen on geo location based business models, such as New York's FourSquare. But how much of a future is there for geo based web services?

Much depends on whether users will allow companies to track their locations and the establishments they visit. With Foursquare, every bar, diner, ice cream parlor you check into becomes a semi-public record. Facebook also gives semi-public access to a lot of lifestyle user data.

Insurance companies, or companies offering services to the insurance industry, will start tracking this data because it's valuable. Insurance companies will have a more accurate way of determining risk and rates.

People have had a cavalier attitude towards data privacy because they haven't had a clear feedback loop. But if they see their insurance rates rising because of the geo-data they are inadvertently publishing, they are sure to opt-out of any location based services.

People already are very suspicious of location based tracking. In the San Francisco Bay Area, there are "FasTrak" lanes that allow cars to use a wireless device to automatically pay bridge tolls. Yet every day, there are hundreds of thousands of cars waiting in long lines, willing to pay an extra dollar -- not to be geo-tagged.

It would seem that the enthusiasm for location based services might be misplaced.

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