In 1990, Mazda introduced the first ever GPS-enabled automobile navigation system.  Over the next decade, GPS navigation would be a luxury for only the drivers of top-of-the-line cars. Then in 1998, Garmin started the shift toward wider adoption with it’s affordable, portable StreetPilot GPS.  Widespread adoption of smartphones over the past decade, with their built-in GPS antennas, has led to the most dramatic transformation in automobile navigation: crowdsourcing real-time traffic data. Led by Waze, an Israeli startup that was purchased by Google in 2013 for $1.1 billion, crowdsourced navigation has changed the way millions of people drive, as well as created some externalities.
Transformation Through Crowdsourcing
Prior to Waze, GPS navigation providers innovated through predictive routing, in which algorithms use historical traffic data to determine the most efficient routes at different times of the day. The issue with this method, however, is that it uses data from the past and doesn’t alert drivers to new/recent anomalies. Just because a road is historically traffic free, it doesn’t mean that it’s immune to a random auto accident. Through crowdsourcing, the same innovation that made Wikipedia one of the most comprehensive (and accurate) sources of information, Waze uses real-time data to create better traffic recommendations than predictive routing ever could.
The shift toward mobile technology has made crowdsourcing feasible for navigation data collection. Waze gets its data from two main sources. First, it has a community of millions of actives users who, while using the app to navigate or having it open in the background, allow Waze to access speed and location information. Users can also input alerts to change the map directly when they see a police officer, spot a hazard in the road, or experience unexpected traffic. The second source of data is an army of more than 500,000 volunteer map editors who update roads and verify local edits.  Through crowdsourcing, Waze has been able to create hyper-accurate maps in more than 185 countries with fewer than 200 employees, presumably at a much lower cost than would otherwise be required. When trying to expand to a new country, crowdsourcing maps dramatically reduces the time to market. In just a few short years, Waze was able to capture a significant percent of the navigation app market, while creating value for multiple stakeholders. While there is potential opportunity to sell their traffic insights to local and state governments, Waze has chosen instead to capture value by selling in-app location-based advertising.
- Drivers. Perhaps the biggest winners of crowdsourced navigation are the drivers themselves. For zero cost they get access to the most up-to-date traffic conditions with instantaneous and seamless redirecting to more efficient routes when an accident, for instance, occurs. One user exclaimed, “Waze saves me a few minutes of commute every day, with five days a week and 50 weeks a year, that adds up.”  Users also get access to helpful alerts, such as a pothole or a police speed trap waiting a half mile up the road. The app also shows users locations to the nearest gas stations and sorts by distance and price. With the ability to reduce travel times and prevent speeding tickets, it’s easy to see why there are over 100 million monthly active users.
- Google. With its own popular navigation app and a 67% market share, it’s not immediately obvious why Google was interested purchasing Waze, especially since the company announced that it would keep the two entities entirely separate.  However, Google has much to gain. Crowdsourcing is a much cheaper way to collect map data than Google’s fleet of Street View cars, and Google can integrate Waze data to improve Google Maps to maintain its dominant market share.  It’s not clear if location-based advertising has made Waze profitable, but there’s certainly opportunity for Google in Waze’s ability to generate local advertising in real time as drivers pass commercial listings. Even if Waze isn’t profitable, Google wins by keeping Waze and its crowdsourcing technology away from navigation competitors such as Apple. In order for crowdsourcing to be effective, there needs to be enough users to provide significant amounts of real-time data, and few players have achieved Waze’s level of monthly active users.
- Governments (and by extension, its citizens). Realizing the effect that crowdsourced data has had on drivers, governments have started to partner directly with Waze to glean important information. Through Waze’s Connected Citizen program, cities and government organizations around the world are learning how to better manage traffic flow, and are being altered when potholes or other road hazards need to be fixed.  As a result of Waze’s partnership with the Belgian city of Ghent, the city changed traffic flow on 94 roads and altered 1800 traffic signs, yielding a 40% reduction in traffic with expected declines in accidents and emissions.  This relationship with governments is a two-way street. Waze also benefits by gaining timely access to government data, such as road closures due to construction. Waze also establishes itself as willing to work with city governments, which creates goodwill when negative externalities arise (see below).
- (some) Residents. While the benefits to drivers are undeniable, the residents of some neighborhoods through which Waze redirects traffic face some unintended consequences. Many local, residential roads weren’t designed to accommodate large traffic flow, which creates more traffic than the original problem the drivers were hoping to avoid. A resident in Tokama Park, Maryland was frustrated when we told a newspaper that it had “become a nightmare, I could see them looking down at their phones. We had traffic jams, people were honking. It was pretty harrowing.”  In other case, a street designed for local use handled 650 cars an hour, leading to residents being trapped in their driveways and multiple accidents. 
- Law Enforcement. Police officers aren’t too thrilled about the fact that Waze alerts drivers to their presence. Waze argues that this actually leads to safer roads since people will drive slower if they know speed traps are nearby. Alternatively, drivers might drive faster if they believe that there’s a decent chance police aren’t close. Law enforcement’s biggest gripe involves officer safety. One Miami police officer believes that police location data “puts us at risk, puts the public at risk, because it’s going to cause more deadly encounters between law enforcement and suspects.”  There’s no direct evidence that criminals have used Waze to target police officers, but the risk is there.
 “A Brief History of GPS In-Car Navigation.” NDrive, 9 Apr. 2018, ndrive.com/brief-history-gps-car-navigation/.
 “Waze Company Fact Sheet.” Https://Assets.brandfolder.com/Pbtsls-1nska8-Dxoeew/Original/Waze_Company.Pdf?_ga=2.186820589.494513673.1542075282-1186534970.1542075282.
 “Why Some Cities Have Had Enough of Waze.” U.S. News & World Report, U.S. News & World Report, www.usnews.com/news/national-news/articles/2018-05-07/why-some-cities-have-had-enough-of-waze.
 Panko, Riley. “The Popularity of Google Maps: Trends in Navigation Apps in 2018.” The Manifest – Small Business News, Data, and How-To Guides, themanifest.com/app-development/popularity-google-maps-trends-navigation-apps-2018.
 Greenfield, Rebecca. “Why Waze Is Worth More Than $1 Billion.” The Atlantic, Atlantic Media Company, 29 Oct. 2013, www.theatlantic.com/technology/archive/2013/05/waze-google-1-billion/314914/.
 Del-Colle, Andrew. “Inside Waze’s Volunteer Workforce.” Popular Mechanics, Popular Mechanics, 14 Nov. 2017, www.popularmechanics.com/technology/a15624/waze-volunteer-work-force/.
 Waze. “Waze to Reimagine a City – Waze – Medium.” Medium.com, Medium, 9 Aug. 2018, medium.com/waze/waze-to-reimagine-a-city-d14849f51ee9.
 “One of the Best ‘Waze’ to Use Crowdsourcing.” Social Media for Business Performance, smbp.uwaterloo.ca/2016/06/one-of-the-best-waze-to-use-crowdsourcing/.