A startup with a formula for faster commutes
The next whiz-bang feature coming to your dashboard: Software that can predict traffic jams days in advance.
Krysten Crawford, Business 2.0 Magazine associate editor

(Business 2.0 Magazine) -- Want to tell a real estate client how long it would take him to get to work? Need to know if your delivery trucks will be on time? The best information in the world can't predict what traffic will look like more than a few hours in advance.

But that's about to change. Inrix, a startup in Kirkland, Wash., is rolling out a service called the Dust Network that predicts traffic flow a day to a year ahead of time.

traffic_forecast.03.jpg

How? By using a complex algorithm that factors in hundreds of data points, from a freeway's history of traffic snarls to your neighborhood school's plan for a half-day of classes.

Avoiding the Idol

So when the American Idol concert tour hits Washington, D.C., in late July, for example, Inrix already knows that it will take commuters driving past the Verizon (Charts) Center 20 minutes longer than normal to get home.

But it has also calculated the ripple effect the show will have on nearby side streets. Bryan Mistele, CEO of Inrix, says the goal is to help drivers know in advance how long the detour will take.

Granted, no amount of high-tech wizardry can foresee fender benders. Still, says Dan Benjamin, an automotive analyst with ABI Research, "the ability to predict traffic is the holy grail for a lot of companies."

Inrix is in talks with major portals about integrating the Dust Network into their map services.* BMW is set to offer it in upcoming models.

The Dust Network is based on technology that was originally developed by Microsoft (Charts). The Redmond giant spent four years and an estimated $20 million on the traffic prediction service. But rather than develop it commercially, Microsoft licensed it exclusively to Inrix. (Mistele is a former Microsoft executive.)

Microsoft throws its weight around

The deal was part of Microsoft's new strategy to spin off research in exchange for royalties or equity. Inrix pays Microsoft roughly 5 percent of sales - which Mistele estimates at "several million dollars" for 2006. (Last summer Inrix started selling nonpredictive real-time traffic information to Cingular Wireless and a handful of state transportation departments.)

Mistele says the Microsoft deal gave Inrix a critical boost. The company has since lined up $16 million in VC financing. "It would have taken us six or seven years to replicate what they had done," he says.

Inrix will need the head start. Thilo Koslowski, an automotive analyst with Gartner Research, believes the growing number of GPS-equipped vehicles makes it easier to gather enough traffic data to enable longer-term predictions.

"It's just a question of time before we'll see other companies jumping on this," he says. Looks like Inrix could be headed for congestion too.

*Correction: In a previous version of this story, we incorrectly reported that Yahoo plans to integrate new traffic prediction technology from startup Inrix into its mapping services. Yahoo says it has no current plans to do so.  Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.