Can GPS startup company Waze map the perfect commute?

"We believe that Internet rules are going to apply to GPS chips," says Bardin. "That means free to the consumer and in real time. If you have an Internet-connected device, you expect it to be in real time. Your GPS routes you through construction if we map it via community," he says.

Other companies have taken note. Why drive around the world creating maps when you have an infrastructure of commuters who can do it for you? TeleAtlas is rumored to have something comparable in the works, and Nokia is working with UC-Berkeley and the DOT to pilot a project that, like Waze, uses cars as GPS probes or sensors. Alex Bayen, a UC-Berkeley professor who runs the pilot, says: "There are 4 billion phones in the world, the same number as toothbrushes. Only phones have the potential to achieve this kind of global coverage."

The promise of the mobile Internet is its users. And what Waze critically depends on is user input. "Waze hopes to become a sort of Wikipedia of mapping by creating a community where drivers can edit roads and insert details like street names and construction projects," says John Canali, an analyst at Strategic Analytics. Drivers can report accidents by pressing a button on their mobile-Waze records the location. Users also edit maps online, alerting Waze to deadspots like tunnels and assigning names to previously unmapped streets. Contributors move up in rank and earn map-editing privileges and the right to manage, say, your neighborhood. In Israel, nearly 100,000 people have downloaded the app since January. It speaks to the fact that people will contribute if in return they get free navigation and real-time traffic info. "The genie's out of the bottle. How do you compete with free?" implores Canali. Bardin promises it'll never push ads to their users.

So what's the endgame? For one, Waze is banking on licensing the up-to-the-minute maps it creates and its traffic alerts to third parties—maybe a PND maker like Garmin (GRMN), a smartphone or wireless carrier, or a car manufacturer. Or maybe it just hopes to get swallowed up by another company the way Dash was. "The market is fragmented, and on top of that, you've got a bunch of different business models," points out Canali. The ad model doesn't seem any more promising than the subscription model. (Won't ad clutter distract from driving? Would ads be targeted to searches? asks Canali.) But before Waze can monetize, it needs critical mass. The company launched in San Francisco this May on Google's Android and will be on Windows Mobile this summer and the iPhone by September. For Waze to shine—to get enough input to license its maps and traffic info—it needs at least 1,000 drivers to get a good map of a geographic area and closer to 10,000 to get traffic data to a granular level.

"Real-time traffic alerts are the model," says Nitish Patel, analyst at Strategy Analytics. "If you can get millions of users all contributing, then your crowd-sourced tool is going to be more reliable, so driving scale is essential," he says.

Geography is also an issue of scale. In square mileage, the United States is 442 times larger than Israel. Large maps soak up storage on a handset. To deal with that, Waze spreads the maps across multiple servers and users download sections, along with updates and crowd-sourced traffic alerts for the area and your route. If you fly cross-country, the software downloads the local map and pushes the regional traffic data to your phone.