On the city’s end, CitySourced bundles the reports, sorts by type and maps them.  Cities pay CitySourced an annual fee for the privilege of receiving the data.

Currently in San Francisco you can call 311 (or twitter them) to report issues to the city or get information, but the cost of staffing a hotline is high.  The San Francisco MTA estimated that 41 percent of calls to 311 were for transit information and the average cost per call was $1.96.  At the time, this was more than the actual fare for a bus ride. 

I’m not sure how much the annual fee for using CitySourced is (San Jose apparently just signed up) but its got to be less than the cost of staffing a call center. As more people get smart phones this type of application will become more useful and will lower the costs of reporting & fixing issues while providing more timely information.

Kevin Rose & Michael Arrington seem to like this startup as well, see the TechCrunch writeup, the interview with TechCrunch or Kevin Rose on his thoughts on CitySourced (5:10).