The Future

For Uber, moving on from Kalanick is worth $245 million

Cleaning up after Kalanick’s reign is costly.
The Future

For Uber, moving on from Kalanick is worth $245 million

Cleaning up after Kalanick’s reign is costly.

Earlier today, Waymo attorney Charles Verhoeven announced that the self-driving car company is settling its lawsuit against Uber over alleged trade secret theft. The move signals the end to a lengthy investigation and legal battle, which has embroiled the two companies for almost two years, bridging Uber’s heady days under founder Travis Kalanick and the company’s new direction since he was ousted from his position as CEO (though he retained his seat on Uber’s board of directors).

Here’s the short version: Way back in 2016, Waymo, a.k.a. Google’s self-driving car project, alleged that former Google engineer Anthony Levandowski stole a bunch of confidential files from the company and then brought them to Uber. This more or less seemed to be the case over the course of the year-long investigation into trade-secret theft. Court documents released in October of last year revealed that Levandowski not only left Waymo with 9GB of definitely-Google-related data, but that he also transferred said data over to his laptop and some disks he then hid in his closet, sent (and deleted) texts about shredding evidence, and attempted to wipe his computer while quite literally sitting in the investigator’s office.

After months of failing to reach a settlement and finally taking the case to court, Waymo and Uber have reached an agreement: Google will receive 0.34 percent of Uber equity (which is valued at about $245 million) in exchange for dropping all claims of trade secret theft. Cases settle mid-trial all the time, but Uber’s change of heart in defending its innocence seems significant. While obviously no one outside the two parties can know for sure, there are a few important factors at play here.

First of all, it’s worth noting that this lawsuit was between Waymo and Uber, not Waymo and Levandowski. This meant Waymo didn’t merely have to prove that Levandowski mishandled a shitton of confidential documents, but also that the trade secrets gleaned from those documents either ended up on Uber computers or made their way into the company’s self-driving cars — a significantly more difficult task. (Initially, Waymo claimed that Uber had misappropriated over a hundred trade secrets, but at the trial it actually only covered eight.) Coupled with the fact that Google already is a major investor in Uber (and will receive a larger stake in the company under the terms of the settlement), the decision to pursue a court case was messy.

In a statement on the whole affair, Uber CEO Dara Khosrowshahi wrote: “To our friends at Alphabet: we are partners, you are an important investor in Uber, and we share a deep belief in the power of technology to change people’s lives for the better. Of course, we are also competitors. And while we won’t agree on everything going forward, we agree that Uber’s acquisition of Otto,” (i.e., the company Levandowski worked for after Google), “could and should have been handled differently.”

In the grand scheme of things, this whole lawsuit was just a big albatross. The Uber seen in these juicy, groan-inducing court documents represents everything that Khosrowshahi was brought in to clean up after Kalanick was edged out. It’s the Uber of Kalanick, the Uber of constant scandals and an almost comical level of borderline-unethical practices. It’s the Uber that seems to always be just one headline away from facing the ire of yet another an outrage-fueled hashtag campaign. In short, it’s an Uber that’s not sustainable in the long term. And by settling, the company gives itself the opportunity to begin to move on.

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