I have recently been hearing of more and more transit systems implementing GPS systems. I believe that in doing so, it is beneficial in a variety of ways.
By having transit vehicles retrofitted with GPS, you are able to track its progress along its given route. This is beneficial for transit planners. By being able to catalog a bus' travel along its route, you have the ability to pin point any hot spots that cause delays. With this data a transit planner can then see whether a bus route is differing from its schedule, by how much, and where along the route it is deviating. When a transit engineer is analyzing the data and finds that a bus is consistently being held up at a certain light for several cycles for example, they can then try and correct this problem by altering the bus route to avoid this particular light. The transportation department could (should but I won't get my hopes up as of right now) also take a look at this problem and install a traffic light bus priority signal so that when the bus arrives at the light they can change it quickly and prevent the delay. Transit planners are also able to gauge where bus only lanes may be necessary to ensure that the route is as quick as possible. A municipality would be able to determine how snow removal, construction, automobile accidents, events, festivities or even a police car issuing a ticket affect a bus route. You would be able to determine how the first snow fall affects the ability of a bus to get where it needs to. The main point to take away here is that by having GPS that tracks the location of a bus you suddenly have information that you didn't before, and you can gauge the health or convenience of any given transit route and based on your analysis you are able to make changes.
With GPS, a transit planner suddenly has the tools available to look at which stops a bus uses they most frequently and at which time of the day. This would allow planners to possibly alter/eliminate bus stop locations depending on its use. For example if a stop is particularly busy and there currently isn't a bus shelter, you could install one. Or for example if the frequency of a route is quite low at night time, however your GPS data shows that it is picking up more passengers than the frequency warrants. You now have the ability to be confident in your need to increase the routes frequency at that given time.
With GPS you can provide the data to third party App developers, who in turn develop Apps(be it for smart phones or for the Internet) for the use of transit patrons. Apps can be developed to provide transit users with the exact location of a given bus and the time before it arrives at a particular stop. This would benefit a transit organization in three ways.
The first being that a transit department can decrease the number of missed bus complaints, since the transit user has the information available to plan their arrival to the bus stop more effectively. The transit user doesn't have to blindly rely on a bus pamphlet, google maps, or *shudder* the transit providers website. By having the exact location of the bus known, you could spare those extra minutes that you usually spend waiting at the bus stop to ensure that you are there early and don't miss the bus. Transit patrons could also have the ability to check whether their bus has come early or not, thus preventing themselves from waiting at the bus stop unnecessarily in unforgiving weather for a bus that you have no idea has already passed by. One of the problems with most transit models, is that a bus can come early and you have no way of telling. Now if the route had a high frequency of 5min or even 10min this would not be a problem, however most routes commonly have route frequencies of 15min during peak times and 30min or even hourly frequencies during off-peak hours where missing your bus right as it went by can mean a possible wait time of 1 hour(and thats if the next bus is on time).
The second benefit to transit providers is that by allowing 3rd parties to provide the information, they free themselves of the responsibility. Instead of focusing on getting the information to its patrons, transit providers can instead focus on...well providing transit. This will free time/resources to focus on making transit better, or to increase service. Lets face it, any one who has used a transit planner website knows that they are not very convenient. Transit websites are most often poorly set up, are very rigid in the information that they can/do provide. You often have to know or find out your bus stop number is before you can find out your bus route information. Thankfully Google not too long ago collaborated with transit authorities around the world and started providing a more flexible map based transit platform for patrons. You don't need to know your bus stop number in order to find out how to get somewhere with Google Maps, you can simply select an area to start from and a place to end from and it will formulate route options. Options is key word here, with Google you often have more than one compilation of bus/LRT routes to choose from and from what I've heard Google is going to start offering options to customize your route, for example you may select a route that only uses LRT or limits the numbers of transfers. Transit providers can stop throwing their money away into their awful websites that they clearly have very little experience with, and allow the experts to provide convenient and easy Apps for patrons.
The third benefit is that you make your service information more readily available. Chicago recently implemented GPS for their system, and as a result businesses their can now provide TV screens in their stores. These TVs would often display the arrival time for bus' at a stop directly outside of their store, as well as the weather. By making transit service information readily available at a patrons fingertips where ever they go, you make it easier to use transit. The more convenient that transit is to use the more people will use it. With the current model patrons have to dig through a website, pamphlet, or station maps to find their route information. The pamphlets/maps that are provided are often poorly designed in that they do not provide information on all of the stops, and thus you have to estimate when the bus will arrive at your specific stop if it is not one of the major stops listed. Another detractor about the maps provided is that they do not provide information about the type of street that your route stop is ending up on. Most maps only distinguish your routes into peak or non-peak, they do not provide different shading for routes to indicate highways, community roads, or frequency. If you take a look at Google maps it will distinguish between minor and major roadways with different coloring. Transit maps weight every route the same, a route with 15 minute frequency is presented the same as a route with 1 hour frequency. It seems like Transit providers expect its patrons to be geniuses, and that they must be able to find the information needed on their own. Transit patrons shouldn't need to be geniuses to figure out where they need to go. The information should be clear, presentable and easy to find. The information should not only be limited to patrons with smart phones. If stores and transit stations were able to provide TVs displaying bus arrival information, you also provide transit information for those that cannot own or choose not to own smart phones.
Adding GPS to transit would decrease the workload allowing municipalities to focus more on transit itself, the transit provider would generate a wealth of data that it could use to improve the system and finally it would make the system more convenient and easier for patrons to use.