This is a smart use of crowdsourcing. From the app you can know the number of people who are waiting for the bus and relying on your reporting. Kind of gives you a sense of community. I hope this takes off.
I've been interested in trying to scrape the data from the transit provider here. They have what appears to be reasonably accurate arrival predictions which they display through an atrocious app, and electronic signboards at some bus stops. The busses have a terminal for the driver that displays how long they need to dwell at times stops and announces the next stop, so I assume this is (at an unknown interval) transmitting the locations to their server.
I haven't gone further in looking at it yet, because google maps will only add data sources directly from the official transit provider.