​​How does Google Map predict traffic?

Google Maps bases its traffic views and faster-route recommendations on two different kinds of information: 

1. Historic Data

2. Real Time Data

Historical data is the average time it takes to travel a particular section of road at specific times on specific days

Real-Time data is sent by smartphones (GPS) that report how fast cars are moving right then.

Google Traffic uses crowd sourced traffic data and analyzes location details (based on GPS, WiFi and Cell Phone towers) transmitted to them by users of Android and Google Maps. By analyzing the speed of users along a stretch of road, Google generates a live traffic map.

With more and more people using Android devices and Google Maps, Google has millions and millions of minions providing traffic details on a real-time basis. Google analyzes the data obtained (and after removing the anomalies using its own set of algorithms) and provides us traffic flow that we see on our map, which is actually highly accurate real-time display of the number of Android phones that are currently trying to make the same trip.

Apart from their own devices, Google also uses external data services of AirSage and INRIX to increase the accuracy.