For all of those people who fall asleep on the bus/train and missed their stop. Why not have a GPS alarm? It could save locations, and have various levels of alarms. A gentle nudge when your stop is getting close, more vigorous when it's just around the corner. Great for getting to work in the mornings, and going home in the evening! Program it from your computer at home or hit the Remember Location button on the device and choose desired level of alarm.
I wouldn't think phones that knew where they were would have too much trouble implementing something similar.
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GPS won't work in underground transit systems.
What would work is coded beacon transmitters at/near transit stops. A receiver would receive that signal, recognize the code, and take the appropriate action.
Build it into the seats :) Just make sure to reset it or turn it off when you get a new seat. Or a weight sensor to reset it when it gets a 0.
This sounds like a great $10 program an independent developer could write for the iPhone or other progamable smartphone.