The new real-time gas prices features adds more utility to the Waze app, which is nice, but there are other apps that surface this information. Waze’s appeal is that it has crowd-sourced data, so it might be more accurate in some cases, but it also means the prices might be out of date until someone updates it.

The discount component, however, is more interesting because it really brings a new dimension to the Waze service, letting people not just navigate to the lowest priced option but actually find places that have offers only for Waze users. And it also demonstrates how Waze will make revenue off the free app. The company will be building a revenue model from location-based advertising, allowing certain advertisers to reach its growing base of 19 million users with relevant offers for things along their route.

With the gas program, users will be alerted to nearby discounts on their Waze map. When they go in, they will need to present a coupon generated by the app to the employees inside. That ensures that users will have their coupon visually inspected but it also encourages them to buy something else, which is another benefit for participating gas stations. Waze is not disclosing the exact business details of its advertising deals.

Waze has struck relationships with individually-owned gas stations and regional retailers who own a lot of stations. Vitners, which owns more than a 100 Shell stations in California; Kum  & Go, which has more than 400 stations in the midwest; and Hess, which has 1,300 stations on the east coast, are some of the partners. Five states, including New Jersey, actually prohibit discounts on gasoline, so Waze is looking at offering coupons on food or other items to users in those states.

Waze has been set on not charging its users, which is fitting since users contribute to the service by providing anonymous location data. But as it grows, Waze is turning into a very appealing location-based platform for advertisers. It has a big dedicated user base who can be reached by local offers that are presented in the context of their regular drives.

Waze is hoping that it can turn its ability to lead more users into stores into a significant revenue source. During a promotion for the Nintendo 3DS last year, Waze ran a mini-game that awarded people points and entered them in a drawing when they drove to nearby stores that offered the portable gaming system. Waze said 6.3 percent of its users participated in the program and drove to a store.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Shopping Matters When it Comes to Location-Based Apps
• The fourth quarter of 2012 in mobile
• How tomorrow’s mobile-centric data centers will look

Users who normally keep the app running while driving to stay abreast of traffic conditions will now be able to wave their hand in front of the phone and activate the voice recognition system. They can tell Waze to navigate home or to work, which are the two pre-set destinations that the system accepts right now for voice input. That’s a nice upgrade that puts Waze on better footing compared to Siri and Google’s free navigation system on Android.

But what’s more interesting is being able to report traffic or accidents while driving. Before, Waze allowed people to report this data but for safety reasons, it would turn off the keyboard while the car was moving. Now, users can input the data while they’re moving by just waving their hand in front of their phone and saying, “report traffic” or “report accident.” Waze will respond by asking for the severity of the situation and users can answer with “heavy,” “moderate,” “standstill” or “done” for traffic reports. It’s a smart way to add more information to the system while keeping people safe. That in turn should add more color to Waze’s traffic reports and help explain to drivers what’s at the heart of some of the traffic slowdowns their encountering.

The latest update also includes the ability to tell others about your destination, estimated time of arrival or that you’re running late. The Android update with the same features is expected in the coming months.

Adding voice control is a nice and logical step for Waze, which is now up to 12 million users, adding 1.5 million users a month. I really like the use of the proximity sensor, which gives Waze users a simple way to start voice actions. Google’s Search app also reportedly leverages the proximity sensor on the iPhone, allowing people to enter in a search by lifting the phone to their ear. But I can’t seem to make it work these days on my iPhone 4.

Waze’s use of the proximity sensor is a more elegant solution that works well within the Waze use case and should encourage a lot more active use of Waze. And it’s a nice alternative to waiting for Siri to open up to third-party developers.

“Siri is an amazing product and hopefully we’ll be able to use it eventually though Apple hasn’t given any insight on that. We couldn’t wait for it,” said Michal Habdank-Kolaczkowski, Waze’s director of communications.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in mobile
• How tomorrow’s mobile-centric data centers will look
• Podcast: Mobile winners and losers in 2012 and what to expect in 2013