INRIX Traffic Data Shows Improving Economy, Big Data Possibilities

3/29/13Follow @bromano

Traffic congestion across the U.S. increased in December, January, and February. It’s the strongest sustained increase in the last two years and another that the U.S. economy is in recovery.

The latest INRIX Gridlock Index (IGI), which measures average trip times in the 100 largest U.S. metro areas, also illustrates how companies are finding novel uses for big data beyond their original aims.

The IGI, which Kirkland, WA-based INRIX began publishing on a monthly basis in December, shows traffic increased 9.8 percent in February compared to the same month in 2012, continuing an “upward trend” that began last summer.

“People hit the road as they return to work, and businesses ship more freight as their orders increase,” INRIX CEO Bryan Mistele says in a statement. “IGI shows the pulse of the economy is starting to beat faster.”

The traffic information company has found strong correlations between traffic congestion and macroeconomic changes elsewhere, such as the European debt crisis. “All the countries that are in the deepest trouble with the debt crisis were the ones with the biggest drops in traffic,” INRIX spokesman Jim Bak says.

Now, INRIX is looking to make the IGI more of a leading indicator of economic health. The February IGI is one of several confirmations of the broader gradual improvement in the U.S. economy reported at the beginning of March in the closely followed Bureau of Labor Statistics Employment Situation Summary. BLS will publish March unemployment numbers next Friday, April 5.

“We are putting some processes in place now to publish the data faster each month so we can go out ahead of the employment numbers,” Bak says.

The IGI is based on a comparison of actual peak commute traffic speeds and “free-flow” speeds, all derived from INRIX’s historical traffic information database. The database combines information from more than 100 sources, such as road sensors, real-time traffic updates crowd-sourced from 100 million INRIX commercial fleet customers, and private drivers. It also factors in weather and event information, like whether the Seattle Mariners are playing at Safeco Field over the weekend, creating slowdowns at the I-90 and I-5 junction. (It doesn’t take into account event details like whether Felix is pitching.)

While the link between traffic congestion and economic health may be intuitive, the fact that INRIX is using its data in this context might have surprised executives when they spun the company out of Microsoft Research in 2005.

Its database—now containing what the company says is “over a petabyte of data”—was originally built to help commercial fleet drivers navigate around traffic. The company has since broadened its offerings to appeal to different kinds of customers. Car makers use INRIX services as part of their on-board navigation systems to help drivers avoid bottlenecks in real-time; free mobile apps provide this service to other drivers. Governments use INRIX’s data for measuring traffic, planning road improvements, and system operations. Media companies are using the data to power broadcast traffic reports and, soon, to better measure how long drivers are seeing freeway billboards under different traffic conditions. Most recently, real estate firm Windermere started using INRIX to help prospective home buyers predict how long their commute would take from a new home.

In addition to its macroeconomic value, the financial industry is finding other uses for the INRIX data. While it’s not a major business for the company, INRIX provides a hedge fund with a quarterly report on traffic congestion around a big box retailer’s stores offering a potential early indicator of revenue.

“We’re only at the… early stages of realizing the value that this data has beyond what we initially intended it for when we started the company,” Bak says.

This speaks to a broader issue in big data. The information revolution is not just a technology challenge, but also a challenge of imagination: companies are rapidly developing the ability to answer questions with data that they haven’t thought to ask.

INRIX, a potential IPO candidate from the Seattle area, is a prime example. It now has about 300 employees and a score of job openings. About 200 people work at the company’s expanding headquarters, where the executive offices overlook a frequently congested stretch of Highway 520. Commutes on that stretch were a little worse in February compared to a year earlier, as the Seattle area’s IGI was 15.8, meaning the average trip took 15 percent longer due to traffic.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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