A VC in Vacationland

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Waze offers driving directions based on crowd-sourced data. Unlike expensive alternatives, Waze is free and likely more reliable for many regions. I have traffic reports integrated with GPS-driven maps in my new car and it is far from correct, based on a number of recent trips to New York City. Trust me, you do not feel "really good" sitting in a big traffic jam that you supposedly paid $25/month to avoid. With Waze, users immediately update the database if they become stuck in traffic and you get instant alerts if you are in the vicinity.

According to the CEO, Noam Bardin, the company (based in Israel and Palo Alto) first launched its mobile application in Israel, then moved to the San Francisco Bay Area and beyond last year.  Waze currently has over 500,000 users, who contribute to Waze’s database by leaving the application open on their GPS-enabled phones as they drive, feeding map and traffic information back to the application. Another 5,000 users are more active, making edits to the various maps, and 550 users even more active, working as area managers who oversee the editing.

Waze now has maps in 85 countries. Over 70 percent of the application’s traffic is coming from the United States, while 19 percent comes from Italy — no surprise for anyone who has ever tried to drive in Rome. 

The application is free, but in the past Waze has said it wants to make money through data-sharing deals with map companies. It just announced its first deal, with South American company Location World. Both companies benefit — Waze gets maps to use as the foundation for its application, and Location World gets to update its map based on Waze’s user data.

Waze should also be a boon for long haul and local delivery drivers trying to find their way around urban or suburban traffic jams. Although many have in-cab traffic sensing capabilities now, these technologies tend to not have the real time data available from crowd-sourcing solutions.  Further, these technologies do not do a good job covering non-urban areas due to a lack of available traffic data outside urban areas.

Since the data is 100% user generated, users might be disappointed to find that minimal data is available in their location. With time and a few million more users, we may have a nice, real time solution to beating traffic jams.

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