To clarify: It's not a web service. It's a downloadable custom ArcToolbox script tool created with python.
The ultimate goal of the tool is to be able to figure out the area reachable by walking and transit from a given point. To do that, you need to know the network distance between that point and the transit stops you could walk to within the time limit. However, you also need to know the network distance between the transit stops themselves. Someone might, for instance, walk for one minute to get to a stop, get on the bus and ride for 10 minutes, get off the bus and walk for 5 minutes to another stop, and then get on a different bus and ride some more until the time runs out. So, we also need to know the stop-stop network distance to calculate how long it takes to walk between stops.
We solve this problem by just calculating one big OD matrix for all the stops, within a cutoff distance. We've separated this part of the tool so you only need to do it once for any city, and you can calculate many different service areas without having to run the long part over and over. The OD matrix just sits in an SQL table that the code can refer to.