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How Does Waze Work and Earn Money? Let’s talk!
The world is talking about Waze, and what’s more interesting is its commendable growth over the last few years. The company at the Waze On virtual event, which was held on 15th September 2020, mentioned that it has over 140 million monthly active users who have driven a whopping 36 billion kilometers worldwide across 185 countries! This is enough to know the company’s place in the industry today and its fast emergence as a top market leader.
As of 2022, Waze boasts 151 million monthly active users globally, with 30 million users in the United States. The app operates in 185 countries, with 38 of these countries having over 20,000 monthly active users.
Waze provides real-time traffic information and turn-by-turn directions. Users actively contribute by reporting traffic conditions, accidents, and road hazards. The app also integrates features like gas price comparisons and nearby business listings.
On average, Waze users drive approximately 10.5 kilometers monthly and spend 438 minutes per month using the app. Waze relies on a dedicated community of 420,000 volunteer editors who update and enhance the platform.
In 2013, Google acquired Waze for $1.15 billion, further boosting its growth and development.
As the application is still nascent compared to the existing ones in its space, many people are still confused about how it works and what exactly it offers. Is it a Waze map service? Is it a route optimization platform? What is it?
Moreover, many startups and organizations that are looking forward to walking on the steps of Waze are keen to know its business and revenue models.
Well, if you’re one of those people who want to know more about the company, you’re just in the right place.
This blog post will discuss the working of Waze, its Business and Revenue strategies, and much more! So, without further ado, let’s get you the answers you’re looking for.
What Is Waze?
Remember those times when you accidentally took the longer route, and it took you an hour longer to reach your destination? And that time too, when you got stuck in traffic and almost missed your flight. Well, we’ve all been there. However, those are the olden days now. With the Waze app being in the picture, you can forget all your traffic woes.
Waze is a community-driven application that offers navigation routes and real-time traffic alerts via smartphones and tablets. With the help of its turn-by-turn navigation data, you can have a hassle-free travel experience.
Here’s a short answer to how does Waze work – the Waze servers suggests the most optimum route to your end destination and helps you avoid all traffic jams and possible road hazards. Result? You would end up having a relaxed journey and wouldn’t be the last one to arrive at a party, for sure.
Here’s a bit of the company’s backstory. The Israeli mapping service was founded by Uri Levine, a serial entrepreneur, in 2006 to contribute to the common welfare of roads and commuters. Back then, it was known as FreeMap Israel and didn’t change its name to Waze until 2008.
The application soon garnered a great user-base and started growing exponentially. Certainly, Google Maps, which was launched just a year before Waze, was the company’s biggest competitor. However, this competition died down as Google decided to acquire Waze in June 2013. They settled the acquisition deal at a $1.3 billion purchase price.
Waze Facts and Stats – Profile, Funding, and Growth
Company Profile
| Company Name | Waze (Formerly FreeMap Israel) |
| Original Author(s) | Waze Mobile |
| Type Of Company | Subsidiary |
| Parent Company | |
| Founded | 2006 |
| Founder | Uri Levine Ehud Shabtai Amir Shinar |
| Type | GPS Navigation Software |
| Website | https://www.waze.com/ |
Funding Timeline
Date | Funding Name | Amount of Money Raised |
| 1st March 2008 | Series A | $12 Million |
| 8th December 2010 | Series B | $25 Million |
| 18th October 2011 | Series C | $30 Million |
How Does Waze Work? Business Model Explained.
Let’s understand.
You can simply update information regarding the troubles you encounter while traveling on the Waze app. This could include traffic reports, road mishaps, blockades, police activity, road conditions, and much more. The application collects this data and shows you an ideal route to your destination. Thus, the Waze servers pick up each update and work dynamically.
Due to its accurate real-time traffic data, many cab-hailing applications such as Lyft and Cabify (formerly known as Easy Taxi) are using Waze today. As a result, drivers can see all the relevant information reported by users and adjust their routes accordingly.
Certainly, you may be wondering, how the functioning of Waze is any different from other GPS navigation systems? Well, the answer to this question lies in the company’s community-driven approach. Unlike Google Maps that uses a variety of sources to collect data (road sensors, local transport departments, etc.), Waze map uses live, community-driven, and crowd-sourced data. In simple terms, it relies on user information and drivers’ reports.
Let’s look at the step-by-step explanation of how does Waze work.
- After users plot their location on the application, Waze picks up this data and shows turn-by-turn navigation.
- Unlike Google Maps that shows navigation for driving, public transportation, biking, and walking, Waze map only focuses on route optimizing for driving.
- The users can also choose to provide their location via voice navigation so that they don’t have to look away from the road.
- Waze requires a data network connection. If the user loses internet connectivity midway through the destination, the application will continue to show the route and ETA, assuming that the driver moves along the same road and at the same speed. This process will continue until the data network connection is restored.
- The application alerts the drivers when they’re going too fast as it continually monitors their speed.
- When drivers encounter road mishaps or inconveniences such as traffic jams, blockades, accidents, or police action, they can update this information on the app. As a result, all the other drivers using the app will receive updates about the same and subsequently will be directed to an alternate route.
- The application offers ‘one-button accessibility’ to show parking lots near your area.
To sum up, this is how the Waze map works. Additionally, let’s look at the Waze Business Model Canvas if you wish to understand the working of Waze from the business perspective.
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Check Out The Business Model Canvas Of:
As you can see, the Waze Business Model Canvas speaks about nine elements – its Key Activities, Key Partners, Key Resources, Value Proposition, Customer Relationship, Revenue Stream, Customer Segment, Channels, and Cost Structure.
Look at the Revenue Stream mentioned in the Waze Business Model Canvas; This is where your doubt regarding “how does Waze work and earn money?” gets resolved. The company monetized its application by offering carpooling and advertisement services.
Let’s discuss Waze’s revenue model in detail.
If you wish to know more about how Waze works and want to build a similar navigation application, get in touch with us and get started with your project today!
How Does Waze Work and Earn Money?
The primary source of revenue for Waze is advertisements. Let’s give you some insights into the revenue stream of the company.
- Location-based Brand Advertisements
Businesses who are looking forward to advertising their brand and finding new customers can use the Waze advertisement feature.
The drivers can see various restaurants, cafes, grocery stores, gas stations, and similar infrastructures along their way to their destination. Likewise, the advertisers can view nearby drivers and track them in real-time. They can also set a monthly expenditure budget and decide how much they want to spend on advertising.
The best part for drivers is that they can receive great discounts and offers on the products, depending on the location and time. Thus, the application provides a win-win situation for both parties – drivers and brands.
The Waze app currently offers three different types of advertising formats – Promoted Advertising, Branded Pins, and Zero-speed takeovers. Let’s quickly overview these.
Branded Pins
The branded pins are an inverted drop-shaped icon that marks the location of the restaurants, stores, gas stations, etc. on the Waze map. As the users drive by specific locations, the nearby advertised businesses show up on their screens along with several action buttons.
As a result, the drivers can tap on the pin to reveal information about the brands and see the option of driving to the location. Additionally, they can also choose ‘Save For Later’ if they wish to visit the location next time. To sum up, the Branded Pins advertising feature educates and reminds the drivers about the places near their drive.
Zero-Speed Takeovers
The Waze navigation app displays a digital billboard on the users’ screens to encourage impromptu visits at restaurants and stores. As a driver passes by a billboard, a takeover ad pops up and provides turn-by-turn navigation towards the store. These ads usually display limited period offers and exciting deals.
Therefore, whenever a driver passes by a brand’s traditional billboard, a full-screen advertisement would be displayed on the driver’s smartphone or tablet. However, this takeover ad only pops up when the driver comes to a complete stop (for example, at a traffic light)
Additionally, if the driver is enticed to visit the location, they can click on the “Drive There” button and reach the place without any hassle. Other CTA buttons include “Favourite Brand,” “Call Now, “Save For Later,” and “Remind me.”
Case Study: How McDonald’s Drove More Restaurant Visits With Zero-speed Takeover Ads.
Promoted Search Ads
When the drivers search for restaurants, stores, gas stations, shopping malls, and related destinations, relevant results show on the Waze navigation/driving app. With the Promoted Search Ads feature, Wazers can see the advertised brands at the top of the search list.
As a result, this feature increases the brand’s visibility and enables the drivers to select the foremost and top options. This feature is perfect for brands looking to attract on-the-go customers as they can be found with a simple search.
So, this was all about Waze’s functioning for restaurants, stores, and brands. As mentioned earlier, advertisements are the main source of revenue for the company. The Waze navigation/driving app is completely ad-supported and earns profit through brands that opt for the given ad options to increase their customer base.
However, there is another revenue-earning scheme for Waze. Although the carpooling service is a commission-free offering for drivers, it brings money to the table by partnering with organizations.
Let’s discuss how does Waze work with the carpooling feature.
- Waze Carpool Commission
To cut users’ commuting costs and make traveling less challenging, the company came up with a Waze Carpool service that helps users match with everyday drivers. Unlike on-demand cab services like Uber that hire professional drivers, Waze connects users with people just like us who travel to work or similar locations regularly.
Once you download the Waze Carpool application, you will be required to mention your email address and verify your workplace. Subsequently, you’ll be permitted two carpools a day.
Waze is working on expanding this service extensively and has managed to partner with various schools and companies – Amazon being one of them. According to news reports, Waze introduces its carpool service across all 50 states in the U.S.
So, how does Waze motor with its carpooling service?
Waze Carpool levies its riders on a per-mile basis and charges 58 cents-per-mile (up from 54 cents in 2018). Moreover, the users can take advantage of various filters such as star ratings, gender and opt for commuting with co-workers as well.
The passengers are supposed to reimburse the driver for costs associated with driving, such as gas. Depending on the number of passengers and the distance traveled, a driver could earn up to $18 to $19 – with each rider (maximum 4 allowed) paying approximately $4.
As you can see, there is a lack of profit for the company. Thus, Waze decided to join hands with multiple organizations that invest (undisclosed) amounts in the carpool feature. Consequently, Waze, in turn, offers free ride services to their employees. This is what keeps Waze Carpool up and running.
Top 4 Features to Include in a Navigation App like Waze
As we’ve almost covered everything in order to know how does Waze work, let’s look at the tips and tricks that will make your navigation app stand out. If you’re a start-up looking for some inspiration from the Waze app, this section is perfect for you.
- Music App Integrations
Undoubtedly, this feature is what sets the Waze app apart from the rest of the navigation apps available today. It started off by integrating Spotify in 2017 to help drivers listen to their favorite music while commuting.
Additionally, they added an in-built audio player into the application in 2018 so that the users can listen to content from various streaming services via this feature. As of today, Waze introduces multiple music apps such as YouTube Music, Amazon Music, iHeartRadio, TIDAL, etc. You can definitely add a similar integration into your navigation app like Waze to make it a game-changer.
- Voice Command
With this feature, your navigation app users can keep their eyes on the road and give inputs at the same time. In Waze, users can report road conditions and drive to specific locations with voice commands.
For instance, users can say “Drive to Work/Home,” and the application will show the route for whatever destination you’ve set as your workplace or home. Additionally, they can also say “Stop Navigation,” and the turn-by-turn directions will come to a stand-still.
- Alerts and Notifications
Waze has a ‘Speedometer’ feature that alerts its users when they’re going above the speed limit. This helps the drivers stay within the set speed limit and avoid any serious consequences, such as getting a speeding ticket.
Moreover, the app drops notifications when it’s time for the drivers to get going. For instance, if you have to reach a destination at 7:30 PM and it is a 30-minute drive from your place, the application will alert you at 7 PM (provided you’ve set the timer)
This is another great feature that you could include in a navigation app like Waze.
- Compatibility with Android Auto and Apple CarPlay
Both Android Auto and Apple CarPlay project your smartphone application on the in-car display. Creating an application in sync with this technology will help users connect the app to the screen with a USB cable. Waze map service is compatible with both Android Auto and Apple CarPlay; however, this feature is primarily focused on Waze navigation and offers limited features of the app.
Conclusion
After having gone through the overview of the Waze app, its business and revenue models, and the must-have features, I am sure you are more confident than before about building your project. Ensure that your driving app or navigation app has robust features that would lead to maximum customer satisfaction and minimum map issues. Indeed, we have solutions for that as well.
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Hope you liked our blog post on “How Does Waze Work And Earn Revenue?”
FAQ
Q: Can you get paid for using Waze?
A: No, Waze does not pay users directly for using its app. However, users can contribute by reporting traffic conditions, hazards, and map changes, which helps improve the service for everyone.
Q: How to earn with Waze?
A: While users can’t earn money directly through the Waze app, businesses can benefit from advertising on Waze. Waze Local, the advertising platform of Waze, allows businesses to reach drivers in their vicinity with targeted ads. Additionally, those with businesses in relevant industries (like gas stations or restaurants) might see increased customer traffic from Waze users finding them via the app.
Q: How much revenue does Waze generate?
A: As of the latest available data, Waze generates revenue primarily through its advertising platform, Waze Local. The exact figures can vary year by year, but it is estimated that Waze generates hundreds of millions of dollars annually. Specific figures are not typically disclosed by Google, which owns Waze.
Q: Does Waze charge a fee?
A: No, Waze is free to download and use for drivers. The app monetizes through its advertising services rather than charging users a fee. Businesses pay for ad placements on Waze Local to promote their services to nearby drivers.
