Waze: Changing the Face of Digital Navigation
Through strategic partnerships and community-curated data, Waze is revolutionizing mobile navigation – creating value for the company and the communities it depends on.
Meet Waze
Since its inception in 2007, Waze has become the world’s largest community-based traffic and navigation app. Acquired by Google in 2013 for a reported $1.3 billion, Waze has more than 50 million users.[i] Like many other map applications, Waze is 100% free and provides users with turn-by-turn GPS navigation.[ii]
So what makes Waze different? The answer is the company’s unique crowdsourcing formula. “Rather than assiduously map out every single road, lane and byway, Waze relies on its millions of users to act as traffic cops, field ops and cartographers, flagging and recording updates on accidents, bottlenecks and traffic as they drive.”[iii]
The company’s business model is simple – entice users to report real-time data that can be used to provide compelling “community” benefits, attract more users, and subsequently leverage the value of an engaged audience.
After entering a destination into the Waze app, users can either passively follow the directions, or they can participate in the app’s social and geo-gaming elements to share road reports on accidents, police traps, and other driving hazards.[iv] Active data is collected using voice commands and icons, while passive data, such as the user’s location and speed, is gathered via the user’s smartphone.[v] Both are used by Waze to provide users with the most optimal route to their destination.
New Business Innovations
The Waze crowdsourcing function has not only given the company a unique value proposition, but also a unique way of delivering on that promise.
One of the most transformative aspects of the Waze operating model is the use of drivers as smart “sensors” to collect real-time data. Relying on users for data has allowed Waze to build incredibly accurate maps at minimal cost. While Google spent millions on its Street View cars in order to map roads, Waze has spent nothing beyond what it already pays to make the app as attractive as possible for users.[vi]
The company’s fun and interactive, community-based platform has also helped attract more users to the app, allowing Waze to significantly grow its engaged user network. This has increased the company’s access to real-time data, giving Waze greater ability to continuously improve its services, and has also made the app particularly attractive to advertisers. One opportunity made possible by the Waze app is location-guided advertising. By cross-referencing a driver’s destination and intention, local businesses can identify themselves on Waze maps and use the app to send targeted messages to users who are driving nearby.[vii]
Waze has created yet another competitive advantage and opportunity by creating two-way data exchanges with government municipalities. In 2014, Waze launched a “Connected Citizens program” with government partners including the city of Boston. The company provides governments with free access to real-time driver data in exchange for government data that is used in the Waze app, including information on accidents, road closures, construction, and city events. Data from Waze allows cities to better track road conditions and traffic, helping them to plan ahead, reduce congestion, and improve routes.[viii] [ix]
Potential Challenges Ahead
Like many other digital technologies that are transforming the status quo, Waze is facing a number of challenges. One unpredicted hurdle has been the frustration of residential homeowners, claiming their neighborhoods are now overrun with commuters using Waze. Some cities have introduced motions to “reduce the impact of cut-through traffic that results from use of Waze” which may include new regulations that restrict the flexibility of Waze routes.[x]
Police have also expressed frustration with the app due to the fact that Waze users can report the location of police cars. While intended to alert users of speed traps and accidents, Sheriffs claim the information can be used to plan attacks against law enforcement. Waze has defended the data, calling it an important traffic safety function, but new regulations could come into effect in the future.[xi]
Future Opportunities
The strength of Waze is the company’s crowdsourced collection of real-time data. In addition to developing its user base, Waze has an opportunity to expand into other place-based services. Examples include alerting users of events in their calendars, sending reminders when it’s time to leave, and offering directions; helping to recommend restaurants and other entertainment activities and making reservations; identifying open parking spots; assisting with trip planning; and coordinating car pool programs for (vetted) Waze users. In addition, the company should consider expanding beyond drivers, and create separate platforms for walkers, bike riders, and people using public transportation.
Waze should also continue to build its relationships with government municipalities. In addition to win-win data exchanges, this could present Waze with new business opportunities in the future, such as route management for government services like garbage pickup. Expanding data-sharing with cities will also help Waze build credibility with legislators – an asset that will be particularly important as lawmakers grapple with “if” and “how” they should regulate digital transformations like Waze in the future.
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Endnotes
[i] Cohan, P. (2013, June 11). Four Reason Google Bought Waze. Retrieved Nov 16, 2016, from Forbes: http://www.forbes.com/sites/petercohan/2013/06/11/four-reasons-for-google-to-buy-waze/#39f13cc81433
[ii] Waze. (2016). About Us. Retrieved Nov 16, 2016, from Waze : https://www.waze.com/
[iii] Empson, R. (2013, June 11). WTF is Waze and why did Google just pay a billion + for it? Retrieved Nov 16, 2016, from TechChrunch: https://techcrunch.com/2013/06/11/behind-the-maps-whats-in-a-waze-and-why-did-google-just-pay-a-billion-for-it/
[iv] Waze. (2016). About Us. Retrieved Nov 16, 2016, from Waze : https://www.waze.com/
[v] Bradley, R. (2015, June 2). Waze and the Traffic Panopticon. Retrieved Nov 16, 2016, from The New Yorker: http://www.newyorker.com/business/currency/waze-and-the-traffic-panopticon
[vi] Olson, P. (2013, June 13). What Waze adds to Google: A View from Waze’s CEO. Retrieved Nov 16, 2016, from Forbes: http://www.forbes.com/sites/parmyolson/2013/06/13/what-waze-adds-to-google-a-view-from-wazes-ceo/#4bfd30fd59e2
[vii] Empson, R. (2013, June 11). WTF is Waze and why did Google just pay a billion + for it? Retrieved Nov 16, 2016, from TechChrunch: https://techcrunch.com/2013/06/11/behind-the-maps-whats-in-a-waze-and-why-did-google-just-pay-a-billion-for-it/
[viii] Bradley, R. (2015, June 2). Waze and the Traffic Panopticon. Retrieved Nov 16, 2016, from The New Yorker: http://www.newyorker.com/business/currency/waze-and-the-traffic-panopticon
[ix] Ungerleider, N. (2015, April 15). Waze is driving into city hall. Retrieved Nov 16, 2016, from Fast Company: https://www.fastcompany.com/3045080/waze-is-driving-into-city-hall
[x] Bradley, R. (2015, June 2). Waze and the Traffic Panopticon. Retrieved Nov 16, 2016, from The New Yorker: http://www.newyorker.com/business/currency/waze-and-the-traffic-panopticon
[xi] Ungerleider, N. (2015, April 15). Waze is driving into city hall. Retrieved Nov 16, 2016, from Fast Company: https://www.fastcompany.com/3045080/waze-is-driving-into-city-hall
Photo Credit: Newsguppy.com (2016, March 30). Retrieved Nov 16, 2016, from News Guppy: http://newsguppy.com/waze-app-launches-new-feature-to-avoid-fines-for-speeding
Reading this article, I couldn’t help but think how far we have come from the days of paper maps and Mapquest.com. Through the community of users you described, Waze is always up-to-date on the latest traffic patterns and road obstacle, creating predictability and optimized routes for drivers. All of this information is essentially free to WAZE, thereby allowing for a very profitable business model. The costs to the business are seemingly minimal (and on top of this, they make additional revenues via methods such as advertising).
You mentioned several of the potential challenges ahead. The idea that WAZE helps drivers to know the location of police cars is a controversial one; I would be curious as to whether this will continue to be the case or whether there may be regulations about this in the future. I would be nervous that WAZE could prevent reckless drivers from being caught, as these drivers would be able to alter their driving around the presence of cops. While it is interesting that WAZE and the government work together and can mutually benefit from eachothers’ information, the ability to detect police officers seems to represent a conflict of interests.
In terms of additional threats to WAZE, I’m curious about the threat competition poses. I would be curious to learn more about if Google’s major competitors are coming up with innovations in this area. As far as I know, WAZE is the leader in this area, but I’m curious as to whether this will hold true in the future.
I love Waze. I think what they have done is nearly the perfect adoption crowdsourcing a connected network to build something quite complex – and very useful!
I must react to two points made by the critics of Waze because they made me cringe. You say in your article that residential neighborhoods are upset that traffic is being rerouted to their streets. I have very limited sympathy for that argument and I really hope it doesn’t lead to new regulations against Waze and similar apps. That is such a perfect example of how regulations get out of hand. If the intent of a residential road is to be quite, with a limited number of vehicles traveling on it, it’s on the residents and local community to design it that way. Make the road private, make it one-way, increase the number of stop signs or stop lights, do whatever you want – but please don’t tell drivers that you can’t use the public utility next to where you live. If people want to take that route whether their friend tells them about the shortcut or whether an app tells them about the shortcut, they should be free to do so.
And as to the police’s concerns – that sounds like quite the load of garbage. Police clearly do not want drivers to know where speed traps are, so they want to limit that function. If someone wanted to target a police officer, it’s not hard to go find a police officer to attack. Apps like Waze are not facilitating police attacks. Sorry.
But great post! I think many companies of the future can learn from Waze’s business and operating models.
I completely agree with CMH regarding the police’s concerns about crowdsourced information regarding the speed traps. The act of using crowdsourced information to map police locations treads the line of legality, however at the end of the day there isn’t much that they can do.
One other point that makes Waze unique in the above article is its user interface. It’s fun to interact with, and its relatively easy to understand. While Google’s functionality is powerful and supported by the depth of its mapping system, Waze has a unique advantage as it comes up with additional mapping solutions for drivers that were previously uncovered.