When you’re not familiar with the route, reaching a place becomes hard. Thanks to Google maps people can now go anywhere they want without worrying about getting lost. From unknown streets to cities with navigations apps, you can travel without worrying about anything. These apps have become travel essentials. They come with amazing features that make your travel even more comfortable and convenient. 

If you talk about navigation tools, most people are familiar with Google maps. But did you know that there is another navigation tool called Waze? This software app was developed by Google. Aren’t you curious to know more about Waze? Yes, then let’s continue and till the end of this article, you will know more about Waze.

First thing first, let know what is Waze exactly 

Waze

It was released back in 2006 and Waze works on both tablets and smartphones that support GPS. The best thing about this app is that it usually downloads all the location-based info on mobile data. Although Google maps provide users with the most accurate navigation guidance. However, Waze improvised upon navigation guidance by offering users with turn-by-turn navigation along with the travel details and other route information submitted by other users. In case there is an accident in the direction you’re headed it will inform you beforehand so that you can change your direction.

This app is community-driven navigation and traffic that runs on both tablets and smartphones that have GPS. Users can download it on both Android and iOS. As already mentioned this app was founded 14 Years ago and was initially called FreeMap Israel. But it wasn’t until 2008 that it was commercialized and called Waze. One of the amazing things about this app is that it has expanded to around 185 countries and it is currently available in 185 countries.

Waze was acquired by Google in 2013 for a whopping sum of $1.3 billion. The intention behind this acquisition was to develop Google maps with the help of Waze. But to this day Waze still remains the standalone app. 

Since there are many navigation apps in the market, what makes Waze different from them? Valid question. The thing that makes this software different from others is its crowdsourcing. You can say that it is the major aspect that brings a slight change in the app.

Business Model  

If you want to know about the Waze business model then you must first understand how it works and the key partners involved. Are you ready? Then what are you waiting for, let’s dive right into the topic then?

How does it work?

In the introduction, you must have read that one of the main reasons why this app is different from other navigation apps in the market is its crowdsourcing. If you don’t get what it means, no issues, you will understand it deeply here. This platform allows the users to update or share information relating to the traffic or the area they travel through this app.

Simply put if there is an accident on a particular area while they’re on their way to reach a place they can share or update in the app. This way people who are going in that area can know about the accident earlier and can avoid taking that route to reach their destination faster. Cool, right?

Waze is always on point when it comes to taking you to the route. Do you know why? Because all the details about the traffic are shared with the users real-time. So they share in the app in case there are any disturbances such as blockades, accidents, constructions, police activity or any social activity. It is better to have information on the routes you’re travelling to avoid getting stuck in the traffic or reaching out late. 

So when users provide such information this platform takes all this data and their algorithm calculates and provides you with the best routes to reach your destination faster. Also even when you’re on the road the app calculates the best route by making changes to the route if necessary based on the real-time info provided by the audience.

It is not an exaggeration to say that the users who use this app are clearly adding more value to this app by sharing all the data and information. And Waze is improving itself by consuming all this information and providing the users with the best route to reach location faster.

This brings us to the key partners. If you want to understand more about Waze and its business model you must know about the key partner that contributes to its success.

Key partners of Waze

Users 

As mentioned about the users share or update information relating to traffic and routes real-time. These contributions are proven to be beneficial for the Waze. With the help of this contribution, the app is able to provide the users with real-time updates and the best route to reach on time. 

Drivers

The people that use this app more than anyone else are the drivers. These are the people that bring in money to the Waze. They may not contribute to the update or share information about the route. But these people use this app regularly to find the best route to reach a location. They get benefited from the data provided by the other users within the app. These people solely use this app for navigation.

Advertisers 

For any app or software to survive for a long time, they definitely need the support of the advertisers. Simply put, advertisers are key partners for any app because they bring in money. It is the same for the Waze because there are many companies that sign-up to advertise on this platform. So the companies pay to advertise ads, banner placements, etc. The algorithm of Waze allows these ads to appear in the app based on the user’s real-time location. 

Since then you have understood the key partners and core idea of Waze. Now it is time to know about how this app makes money. 

How does Waze make money?

Now that you have understood about the idea behind the Waze and how it actually works. It is time for you to understand the revenue model of Waze.

Advertisements

Like all other apps, advertisements are the major source for Waze to make money. As you already know advertisers are the key partners for the Waze app. They use in-app location-based advertising. SO they show the users the relevant ads or banners on the app based on their location. Apart from location-based advertising they also offer services under the PPC (pricing per click) pricing model.

These ads displayed on the app interface. Not only that the app will display ads real-time based on the user’s location. It provides information about stores near to them through these ads. They are offering 3 formats for the advertisers to choose from. 

The 3 formats are Branded Pins, Zero Speed Takeover and Search ads.

Branded Pins

These are the pins that appear on the map. This is a better way to advertise stores, restaurants, etc. Whenever the user is driving through these signs will notify them of the nearby stores, etc. An excellent way to promote your business, right? When people go on long road trips these signs will actually help them to get to the nearest restaurants, hotels, etc. You can pin your location on the map and attract more on the route customers.

Zero-Speed Takeover

These are the ads or banners that pop up on the app. In a way, you can call them digital billboards. Since many drivers are using this platform. Don’t you think it is an excellent platform to promote the business? Many of the brands are clearly using this opportunity to connect with more people and increase their network. But these ads will not be displayed when the user is driving. They will only pop up if the driver stops driving for at least three seconds.

Search ads

This is the last format that is offered by Waze. These are the ads that are usually displayed above the search bar. So whenever a user opens the search bar the first thing they will see is these ads. 

Since you have known about the different formats it offers. It is time to know about the plans that Waze is offering. There are two plans and companies can sign up to their plans based on their requirements. If you want to advertise in 1-10 locations then the starter pack is perfect for you.

Improve your in-store traffic with these pins on the map. But if you want to put ads in more than 10 locations then Plus plan is perfect for you. Plus plan brings in excellent features. You can advertise upto 50 locations. Also, you can get live support. So use this plan to boost the visibility of your business. 

Starter- $2/day

Plus- $100/day

Data Deals 

This platform collects a lot of information from its users to improve their service. It also provides its users with ads and important information real-time. Since it has all the data and updates about the routes, it can also make money by selling it to other companies. If a company wants to create a navigation app they have to start from scratch and do the research.

However, Waze can make money by selling the already collected data to these companies. It is a win-win situation for both Waze and the other company. Data deals can also bring in a good deal of income. So it can be considered as an amazing source of income. 

Carpooling 

This service was introduced by Waze back in 2018. Like all other carpools, it doesn’t connect the customers with the parttime or fulltime drivers. It mostly encourages the regular drives to carpool with other riders. Cool, right? The Waze users can access this feature from their Waze app. However, if you’re a driver then you must download the Waze carpool app. This app is available in both Android and iOS versions.

Currently, this service is available in Brazil, US, Mexico and Israel. Carpooling is also an excellent way for this platform to make money. But one must remember that Waze only allows only two carpools per day for each rider and drive. Yup, you heard it right. For every mile, the pay is charged a maximum of 54 cents. Wondering how is the pay determined? There are many other factors that have a role in determining the price of each ride. 

Wanna find out the factors involved in price determination are

Basic Price

The basic price of this carpool is calculated by Waze by taking into consideration the number of people riding and the route taken. So the basic price doesn’t include any other charges. It is just plainly calculated based on the number of people travelling and the route taken.

Riders

The number of riders travelling plays a role in the calculation of the basic price too. A driver can accept as many riders as they please. So naturally, the prices will vary based on the riders leaving and joining the carpool. But no matter how many people come and leave the prices will not exceed from the amount that is shown at the time of confirmation of the price. 

Coupons/ Promotions

Also, Waze usually gives coupons or promotions. The users can grab them and use them on rides to reduce the overall price of the ride. So this is the best way to reduce the price of the ride. So this also becomes an important factor to determine the price. 

Service fees

The good thing about Waze is that they have waived these fees. So there will be no inclusion of service fees in the final price. 

Wrapping up

As you have made it to the end then you must have understood about the Waze business model. This is one of the amazing navigation apps that will help you in finding the best route to reach your destination faster. The main reason for the success of this app is that it usually drives real-time traffic updates from fellow users. So there are really low chances of them not finding the perfect route. If you want to read more interesting business model articles, check out our other articles.