Uber To Pay $245 Million in Google Settlement

Only in Silicon Valley could paying $245 million be considered “getting off easy.”

S.F. Examiner file photo

The case of the stolen trade secrets just got shockingly settled, as rideshare behemoth Uber unexpectedly agreed to pay Google’s self-driving car division Waymo a settlement of approximately $245 million. CNN Tech reports that Uber conceded to pay that large settlement Friday, in the lawsuit alleging that an Uber employee swiped nearly 15,000 files of Google’s proprietary data before he left Waymo.

‘Sharing economy,’ indeed.

“A gasp could be heard in the courtroom when attorneys announced the settlement,” writes CNN Tech’s Selena Larson, who was in the courtroom at the time. “Presiding Judge William Alsup noted after the announcement that a settlement like this, in the middle of a trial, is rare.”

$245 million sounds like an awful lot of money to those of us who do not work for Google or Uber. But the settlement was actually pretty favorable to Uber, as Google had originally been asking for $1.8 billion, and Reuters reports that “Waymo had agreed earlier this week to a settlement proposal valued at $500 million.” Furthermore, Uber doesn’t have to pay this in cash. CNN Tech describes it as “a deal that includes 0.34% of Uber’s equity at a $72 billion valuation, which works out to about $245 million.”

Waymo is the self-driving car division of Google, which is now called Alphabet and consequently has about 26 different names. This particular case focused on a company called Otto, which was acquired by Uber, that was founded by ex-Googler Anthony Levandowski and is trying to design self-driving trucks.

Alphabet alleges Otto founder Anthony Levandowski downloaded proprietary data from Alphabet’s self-driving files,” the SF Examiner reported last March. “In December 2015, Levandowski download 14,000 design files onto a memory card reader and then wiped all the data from the laptop, according to the lawsuit.”

Uber CEO Dara Khosrowshahi put out an apology statement Friday morning, something you have to do pretty regularly when you take over Travis Kalanick’s job. “The prospect that a couple of Waymo employees may have inappropriately solicited others to join Otto, and that they may have potentially left with Google files in their possession, in retrospect, raised some hard questions,” Khosrowshahi said. “While we do not believe that any trade secrets made their way from Waymo to Uber, nor do we believe that Uber has used any of Waymo’s proprietary information in its self-driving technology, we are taking steps with Waymo to ensure our LiDAR [Light Detection and Ranging] and software represents just our good work.”

According to CNN Tech, “The investigation into potential trade-secret theft began in late 2016 when Waymo accidentally received an email from a supplier containing an attachment that detailed Uber’s LiDAR circuit board. Waymo claimed it looked suspiciously like its own design.”

“Accidentally received an email”? People, if your company is competing with Google, do not use Gmail to send work emails.

The bizarre irony about this settlement is that Google now needs Uber to be more successful, so as to increase the size of Google’s payout. Uber, of course, has never, ever made a profit, and Waymo and Uber are competing to officially roll out the first fleets of consumer-facing self-driving cars.

“Instead of gambling that Uber has to fail completely, they’re taking a new gamble that Uber will fail in self-driving technology, but want to deploy a self-driving fleet and be a customer in need of Waymo’s technology,” Loyola intellectual property law professor Justin Hughes told CNN Tech.

Google/Alphabet seems to be playing both sides, having invested $1 billion in Lyft in addition to a $258 million investment in Uber back in 2013.

Note: An earlier version of this post incorrectly stated the size of the settlement in this case, and the post has been updated.

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