Self-driving car technology is emerging as a powerful next-generation platform. While there are only a handful of vehicles on the roads today, companies like Google, Uber, Nvidia, Tesla, and more have all tossed their hats into the ring and are jockeying for position in the nascent market.
But competition is cutthroat, and there’s tremendous pressure on the tech industry to deliver real results. Waymo, Google’s self-driving car division, has announced it believes Uber stole some 10GB of trade secrets on its self-driving car program, and that it is taking action against Otto (the unit developing self-driving vehicles for Uber) and Uber itself (the parent company).
Waymo lays out the facts of the situation in a recent Medium post. There, the company discusses how it began developing LiDAR (Light Detection and Ranging) technology in 2009. According to the company, it has dramatically improved LiDAR and significantly improved the capabilities of the system. Waymo writes:
Hundreds of Waymo engineers have spent thousands of hours, and our company has invested millions of dollars to design a highly specialized and unique LiDAR system. Waymo engineers have driven down the cost of LiDAR dramatically even as we’ve improved the quality and reliability of its performance. The configuration and specifications of our LiDAR sensors are unique to Waymo. Misappropriating this technology is akin to stealing a secret recipe from a beverage company.
One of Google’s self-driving car patents
Last year, Uber bought a self-driving car company named Otto, founded by a former Google Waymo engineer. Recently, Waymo received an email, likely sent accidentally, from one of its major LiDAR component suppliers. The email included machine drawings of Otto’s LiDAR system and circuit boards — boards that were extremely similar to Google’s own designs.
Waymo began investigating the issue and found that Anthony Levandowski, the former Google Waymo employee and founder of Otto, had downloaded over 14,000 highly confidential files, including “proprietary design files for Waymo’s various hardware systems, including designs of Waymo’s LiDAR and circuit boards.”
To gain access to Waymo’s design server, Mr. Levandowski searched for and installed specialized software onto his company-issued laptop. Once inside, he downloaded 9.7 GB of Waymo’s highly confidential files and trade secrets, including blueprints, design files and testing documentation. Then he connected an external drive to the laptop. Mr. Levandowski then wiped and reformatted the laptop in an attempt to erase forensic fingerprints. Beyond Mr. Levandowki’s actions, we discovered that other former Waymo employees, now at Otto and Uber, downloaded additional highly confidential information pertaining to our custom-built LiDAR including supplier lists, manufacturing details and statements of work with highly technical information.
That’s a damning accusation, given the proof Google has collected, and it comes at a time when Uber scarcely needs more bad news. The company was hammered earlier this week by robust and documented incidents of sexual harassment by Susan J. Fowler, a former Uber employee. In her post, she documents an HR department that repeatedly told her it would not discipline employees for sexual harassment because they were too important to the company. The post alarmed Travis Kalanick, Uber’s CEO and co-founder, who immediately vowed to investigate the problem. The company is using its own employees to conduct the investigation, rather than relying on an outside, impartial investigator, and investors have already criticized the company for this strategy. It’s also faced blowback for its privacy-invading updates and its habit of tracking people after they leave their vehicles for more than the few seconds it claims to monitor.
This is just the latest in a string of awful news reports on Uber. The company was criticized for attempting to capitalize on protesters when New York City cab drivers struck to protest President Trump’s immigration orders several weeks ago. It faced heavy criticism for its initial refusal to pay a $150 registration free to the city of San Francisco in order to test self-driving cars in the city. The optics there were terrible as well; one of Uber’s self-driving vehicles ran a red light almost immediately (though it may have been driver error) and some 20-plus other self-driving car companies had already paid their $150 fees to test self-driving vehicles. It’s also been sued for an incredibly predatory loan program, and the company is expected to post at least a $3 billion loss for 2016 on $5.5B net revenue.
Notice who is hurt, here. Not the person who was sexually harassed, lied to, and fired for refusing to “play ball”
The company has been sending the above boilerplate response to at least some American users who want to cancel their accounts, and it’s a great example of the attitude that gets them into trouble in the first place. The reference to Eric Holder is meaningless; he’s been working as an advocate for Uber since his firm was hired to fight the idea of using fingerprints as part of background checks on Uber drivers. Arianna Huffington is also part of the investigation, despite not being mentioned in the above — and she’s an Uber board member.
Despite its fanciful claims and habit of breaking the law, Uber isn’t “disrupting” anything with any kind of sustainable business model. A company burning $3 billion per year isn’t disrupting taxis; it’s driving them out of business while incurring unsustainable losses. It’s not hard to see how this ends — with taxis (which I loathe, for the record) driven out of business, Uber will be able to raise its rates and achieve greater profitability. Meanwhile, it’s been losing court cases over whether drivers are employees.
It’s long past time for Uber to grow up. It’s not a plucky start-up, it’s a multi-billion dollar company that lies about driver pay, misrepresents loan programs, has actively sabotaged its competition by calling and cancelling thousands of rides, and actively attempts to subvert the laws of many of the cities in which it operates. Its self-driving car technology is an obvious attempt to put its current drivers out of a job in the long term. If you think about it, that’s the only play Uber can really make. Raising rates to cover costs would damage its bid to take over the taxi business. Thus far, Uber’s only real success has been its ability to lose billions of dollars. That’s not “disruption.”
The real question is — did Uber know it was buying a stolen set of goods when it bought Otto? Conventional wisdom says it didn’t, if only because no corporation would want to open itself to that kind of risk. But given Uber’s lackadaisical attitude towards the law, it wouldn’t be surprising to find out the company knew what it was buying all along. If Google persists in taking this case to court and refuses to settle, we could learn some very interesting things about how Uber operates once the trial commences.