Waze is crowsourced navigation and real-time traffic app. In addition to updating information on things like traffic congestion and police activity, users build the map itself. Waze starts with a Tiger map (a visualization of U

.S. Census data) as a base map that users build the navigation map on top of by running Waze’s free app while driving.

“What we’re doing is building an entire geostack, from the base map itself – of which traditionally there are only a couple of providers – all the way up to the levels of social information,” explained Waze’s Di-Ann Eisnor while presenting the company at last week’s TechRadar.

With crowdsourcing, it’s hard to reach critical mass at the scale that’s going to give you good information; typically in a crowdsourced endeavor, one percent of users actually contribute.

“That’s not going to cut it for the kind of work we are engaging in,” Eisnor said.

Waze is able to generate participation among 25 percent of its users by incorporating gaming features into the app.

For example, when users go down a road that hasn’t been mapped, their icon turns into a Pac-Man-like character that gobbles up the route for points, thus mapping the data for Waze.

“This kind of playfulness has never been available in navigation before,” Eisnor said.

This gaming element helped scale Waze’s usage very quickly. Users like this function so much that they ask for Waze to recommend the route that will give them the maximum points.

Users also get major points by fixing map errors. The Tiger maps that Waze builds off are non-navigable, display only. “There could be a one-pixel disconnect in the map, and we won’t know whether you take a right turn or a left turn,” Eisnor said.

In order to encourage the community to correct these map errors, geocaches of points (“road goodies”) are placed where there are problems with the map. Waze has also started giving away prizes from local sponsors, as well.

Right now, accumulating points gives users more editing control over the map

The app’s social element not only meets expectations of today’s user, “It creates a sense that it’s not just you out there creating this information, but that there’s a community around you, working on it,” Eisnor said.

For example of how well Waze's crowdsourcing model works, look at its first implementation:

Waze launched in Israel in January 2009, but had no base map to start with.

“Our users built the entire map, including the road names, including the address numbers, the parks, landmarks, everything," Eisnor said.

"Now we have one of the best maps in the country, and hands-down the best traffic source in the country," Eisnor said. "We’re already being able to monetize it. It’s being used by all the naysers who said, ‘Oh, you can’t crowdsource a map,’ like the Ministry of Transportation [which is] now using our traffic data.’"

Waze currently has 570,000 users in 85 countries. The service launched in the U.S. in August 2009 and rolled out globally that November.

Waze’s business model is a combination of map licensing, geo-ads and coupons, and global map partnerships.

“We see [these partnerships] as a global alliance and the days of only a couple of people owning our map data really being over,” Eisnor said.

Waze plans to release its API in the next few months. The app is currently available for the iPhone, Android, Symbian and Windows Mobile OS’s and others.

By Mark Alvarez