What is Waze and how is it different?
Traditional digital maps, made by companies such as TomTom and Google, are difficult and expensive to make, and often contain inaccurate information . The process starts with a base map, usually from government data . The map looks pretty good, but when you look closer, you see many roads aren’t in accurate locations.
Mapping services manually correct these problems, but new issues constantly arise (such as road closures, new roads, etc.). It takes massive companies like Google and TomTom to build digital maps of the world precisely because it is so hard to do. For drivers, these maps have been their best option for navigating to new places. That all changed with Waze.
Waze, a digital mapping service founded in Israel in 2006, launched with the goal of saving drivers time by making extremely accurate maps with real-time updates . Instead of laboriously building maps and tightly controlling them like competing services, Waze has leveraged the digital revolution, crowdsourcing data from drivers to make the best digital maps in the world . Tens of millions of drivers input massive amounts of real-time data about everything from nearby cops, to potholes, to car accidents blocking the road, helping other commuters optimize their travel routes and avoid unwanted delays.
From a cost perspective, Waze has dodged the huge infrastructure costs incurred by groups like TomTom and Google (think of Google’s mapping cars driving all over the world); it merely has to maintain the quality of its phone app and powerful software .
How is Waze using digital transformation to develop its business and organizational model?
As more and more people acquire phones with internet access and GPS chips, what once took a huge capital investment can be done piecemeal by a community – for free! Anyone driving with the Waze app open is sending data to Waze that allows it to build maps from the ground up, improve accuracy, and provide real-time traffic information.
The unique process uses digital information in a clever and revolutionary way:
- Waze users drive with the Waze app open on their smartphones. The app collects GPS data, which is transmitted in real-time to Waze and an initial map is drawn.
- As more data is collected, the map is made more accurate. For example, speed, direction, number of cars, etc. can be used to determine if a road is a highway, one-way, or a side street, after which traffic patterns are identified.
- Community members edit the map, adding street names and correcting inaccurate roads, etc. 
Waze has created a virtuous cycle with positive network effects: more Wazers provide better data, and therefore better maps, and better maps attract new Wazers.
While Waze relies on the power of the community to make its product (in fact, there are only about 100 Waze employees), it captures value by displaying location-relevant ads for businesses such as restaurants and stores.
So how good is this big data?
While Waze is a for-profit company, users find the data so useful and the experience of contributing to a community so rewarding that Waze has achieved some remarkable things:
- Wazers actually created some countries’ first complete digital maps, for example in Costa Rica !
- The maps, and especially the data from its +50 million users, are so valuable that Apple uses Waze’s data to help power its own map service, and Google bought Waze in 2013 for ~$1 billion .
- By identifying traffic (and events that would likely cause traffic), Waze re-routes cars from roads that are over capacity to roads that have excess capacity, improving road utilization and decreasing drivers’ throughput time.
- Waze reduces carbon emissions by decreasing the amount of time drivers spend on the road .
- Waze partners with local governments through its Connected Citizens Program and exchanges data at no cost. The massive amount of real-time driving information from Wazers allows cities to iterate traffic flow decisions like never before . It also provides first responders with critical traffic and routing information that shaves life-saving minutes off their routes .
What should Waze do next?
Waze’s target customer has been drivers. One hugely positive benefit of saving people time has been the reduced carbon emissions. Another way to contribute to this global cause would be to leverage the same technology to crowdsource the best bike routes. Governments are woefully behind in creating bike lanes and infrastructure for cyclists and as a result, safe bike routes are difficult to come by. As Waze observes where users bike, it can share this information with other cyclists and at the same time, it can help local governments target which roads should be made safer for cyclists (by painting dedicated bike lanes, etc.). Finally, Waze can capture value by enabling local businesses to offer bikers targeted ads through Waze. Time will tell what roads Waze will take next!
- The Atlantic, “How Google Builds Its Maps—and What It Means for the Future of Everything,” http://www.theatlantic.com/technology/archive/2012/09/how-google-builds-its-maps-and-what-it-means-for-the-future-of-everything/261913/, accessed November 2016.
- Pocket Lint, “Mapping paradise: How TomTom maps are made,” http://www.pocket-lint.com/news/115883-how-tomtom-maps-are-made, accessed November 2016.
- Waze, “Reshaping The Way We Drive | Waze,” YouTube, published October 16, 2012, https://www.youtube.com/watch?v=BgFJsja_Qyw, accessed November 2016.
- Popular Mechanics, “How Waze Conquered Mapping with Thousands of Volunteers,” http://www.popularmechanics.com/technology/a15624/waze-volunteer-work-force/, accessed November 2016
- Forbes, “How Waze Cleverly Uses Drivers To Make Better Maps Than Apple’s,” http://www.forbes.com/sites/parmyolson/2013/01/03/how-waze-cleverly-uses-drivers-to-make-better-maps-than-apples/#1c3522296592, accessed November 2016.
- TechCrunch, “WTF Is Waze And Why Did Google Just Pay A Billion+ For It?,” https://techcrunch.com/2013/06/11/behind-the-maps-whats-in-a-waze-and-why-did-google-just-pay-a-billion-for-it/, accessed November 2016.
- TechCrunch, “Waze and Esri make app-to-infrastructure possible,” https://techcrunch.com/2016/10/11/waze-and-ezri-make-app-to-infrastructure-possible/, accessed November 2016.
- Waze, “Waze Connected Citizens Program: Improving Mobility Through Big-Data Partnerships [Full version],” YouTube, published March 25, 2016, https://www.youtube.com/watch?v=z-_VjPesrMs, accessed November 2016.
- Waze, “Get To Know Waze,” YouTube, published March 10, 2016, https://www.youtube.com/watch?v=PPpZNzXqId0, accessed November 2016.
- Featured image: Brandfolder, https://assets.brandfolder.com/header_images/qv93461/1447715609/providertemplate.jpg, accessed November 2016.