Waze – using driver data to build a better map

Waze, an app that tracks real time traffic and road conditions from drivers’ phones, uses huge amounts of data to better route people to their destinations.

Waze, an app that tracks real time traffic and road conditions from drivers’ phones, uses huge amounts of data to better route people to their destinations.

Waze is a free app that creates value for its users by providing the most efficient driving directions – avoiding heavily congested areas or commonly slow streets. It does this by gathering real time data from any user who has the app open while they’re driving. Waze expanded beyond just driving directions, adding things like gas prices and police alerts (all voluntarily uploaded by app users), making the app even more compelling to use. In addition, Waze has a feature that allows you to track your friends when they’re on their way to meet you, which is both a convenient additional feature, and a sticky introduction of direct network effects.

Waze captures all of its value from its user base (after all, the entire app is only as good as the data provided by its users). Users begin as Waze Babies and earn points to become Waze Masters. Users can earn points in a number of different waze, including driving with the app on, reporting accidents, reporting police, editing maps, adding friends, reporting problems with the app, etc. As far as I know, Waze did not actually have a source of revenue before it was acquired by Google for $1B in 2013. It’s value was solely in the data provided by its users on the road. But to Google, that data was worth at least $1B – it allowed Google Maps to improve its directions, expanded the base of users, and ultimately limited the number of competitors in the map app space.

Going forward, Waze and Google will have to continue to innovate as Uber develops its own proprietary mapping services. Especially since Uber has far more and consistent data to rely on (Waze requires uses to turn on the app, whereas Uber gathers data from each trip automatically). Waze also has the advantage of being seen as a “social app,” so the network effects may carry it along further than a traditional map app would otherwise. However, I wonder how compelling the social aspect and the point system is, or if it was just a gimicky way to gamify the app but may not have staying power since the points don’t actually mean anything?


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Student comments on Waze – using driver data to build a better map

  1. Thank you for your post! This is a great example of Data-driven Value Creation as well as crowdsourcing. I have two questions for you. The first one is related to more uses for the app. Do you think that the app could include delivery services, most beautiful routes to get to a location, or even use the crowd to alert local government about roads that need to be improved or fixed? The second question is regarding law enforcement. Do you think Waze should stop showing police location? for example in Latina America some drivers use it to avoid police officers when they are driving and have had alcoholic beverages.

  2. Thanks for the post! I completely agree with your conclusions. My issue with Waze has been that at the end of the day the points don’t actually mean anything. Customers are sharing data to help improve the algorithm for everyone, so there is some social good in being an active participant; however, there needs to be additional incentives to increase the stickiness of the app. Perhaps by sharing and accruing more points, users get access to exclusive routes or discounts at nearby restaurants, retailers? Waze/Google could start forming partnerships with businesses to create a mutually beneficial program to incentivize drivers to continue sharing and using the app.

  3. Great post – amazing how Waze have been able to make people share so much data without hesitating. I think this link was posted as a comment on a previous Waze article but it is worth to check out the amount of information you give away: http://www.digitaltrends.com/mobile/terms-conditions-waze-privacy-accident/

  4. interesting! I wonder if they will collect other data about people’s every day life (restaurant prefs, etc.) that may lead to targeted advertising

  5. i wonder if this is a winner-take-all situation or if facebook could come in with similar technology and compete well. I am having trouble seeing barriers to entry, other than customers being unhappy with inadequate data.

  6. Hi Britt. In the long term, Uber is working on their own mapping software. In the short term, Uber is actually integrating their platform with WAZE. WAZE has proven to be a better and more reliable platform than Uber’s proprietary technology. Uber recently hired one of Google’s top engineers who developed google maps – an indication that they intend to compete head on with WAZE in the medium/long term.

  7. Great post! Waze actually demonstrates direct network effects (with more users and more data, routes and time estimates become more accurate). It’s interesting how Waze used gamification to build a critical mass of users. What’s more interesting though is that Google has decided to maintain Waze independently from Google maps. As far as I am aware, there is very little data shared between Waze and Google (some of the incident reports are shared with Google Maps and Waze leverages search from Google maps, if I’m not mistaken). It will be interesting to see whether they continue operating this way going forward.

  8. I wonder if in the future it will make sense to unite Waze and Google maps, or will it have to be separated to keep then Waze community live and kicking.
    As a heavy Waze user I think Waze should incentivise people to provide more feedback and data, this will allow them to create additional value for their users.

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