A Blog by Jonathan Low


May 31, 2017

The Reason Uber Fired the Google Driverless Star It Poached - and What It Means

The implication is that Uber realized it was going to get legally eviscerated by Google over theft of intellectual property now being litigated. It had probably incorporated whatever knowledge it could glean from Levandowski's files into its own initiative and did so in a way that was legally defensible.

Understanding where its efforts stood in relation to Google was sufficient, though not optimal, but given the threat from Google and the courts, Levandowski became expendable. And Uber paid him a cool $800 mill for Otto, the company he had started on the side while at Google, so shouldn't, in Uber's mind, be feeling slighted.

Levandowski's refusal to cooperate with the investigation provided a convenient excuse to get rid of him and appear virtuous, or at least as virtuous as Uber is ever capable of appearing. Uber and he face potential criminal charges for trade secret theft. JL

Mike Isaac and Daisuke Wakabayashi report in the New York Times:

Uber had little choice but to cut ties with Mr. Levandowski. The company risked being tarnished as if it were indirectly condoning his actions. But firing Mr. Levandowski could mean he becomes a witness against Uber if he claims Uber looked the other way while he used proprietary information. The dismissal of one of Uber’s most prized technical talents points to the risks of the star engineering culture in Silicon Valley. The going rate for driverless car engineering talent is about $10 million a person.
Uber said Tuesday that it had fired Anthony Levandowski, a star engineer brought in to lead the company’s self-driving automobile efforts who was accused of stealing trade secrets when he left a job at Google.
What Mr. Levandowski did when he quit Google to start his own company, Otto, which was acquired by Uber for nearly $700 million last year, is the key question in a closely watched lawsuit that pits one of the world’s most powerful companies against Uber, a richly financed up-and-comer.
The stakes are enormous for both businesses. Google was a pioneer in autonomous car technology and has spent nearly a decade and hundreds of millions of dollars on its effort, which is now run through Waymo, a subsidiary of Google’s parent company, Alphabet. And Travis Kalanick, Uber’s chief executive, has said the future of his ride-hailing company, privately valued at nearly $70 billion, hinges on work being done to create cars that can drive themselves.
The dismissal of one of Uber’s most prized technical talents also points to the risks of the star engineering culture that has emerged in Silicon Valley in recent years, leading to giant paydays for a small group of employees.
That was certainly the case for Mr. Levandowski. Last August, when Uber announced it had bought Otto, Mr. Kalanick described Mr. Levandowski as “one of the world’s leading autonomous engineers,” a prolific entrepreneur with “a real sense of urgency.”
Uber agreed to pay $680 million — mostly in company equity — in exchange for the company’s technology and a team of experienced self-driving technology engineers. Mr. Levandowski and his staff would also be entitled to a small percentage of any profits earned from an Uber-owned, self-driving trucking business developed under Mr. Levandowski’s direction.
But just months after the acquisition, Waymo sued Uber in civil court, claiming that Uber was using trade secrets stolen from Google to develop Uber’s self-driving vehicles — a plan Waymo alleges was aided by Mr. Levandowski.
Uber has denied the accusations. But when Mr. Levandowski was ordered by a federal judge to hand over evidence and testimony, he asserted his Fifth Amendment right to avoid self-incrimination. Uber has pressured Mr. Levandowski to cooperate for months, but after he missed an internal deadline to hand over information, the company fired him.

Uber’s Executive Flight

As Uber has been scrutinized over its workplace culture and the behavior of its top executives, several high-ranking managers have left the ride-hailing company this year.

Amit Singhal
Joined: January 2017
Left: February 2017
A 15-year Google veteran who was dismissed for failing to disclose a sexual harassment claim that occurred during his Google tenure.

Raffi Krikorian
Joined: March 2015
Left: February 2017
A former Twitter executive who left six months after Uber brought in new leadership to its self-driving cars effort.

Jeff Jones
Joined: August 2016
Left: March 2017
A former Target executive brought in to improve the company’s relationships with drivers. He left after Uber began a search for a chief operating officer.

Brian McClendon
Joined: June 2015
Left: March 2017
A former Google engineer brought in to work on mapping and self-driving technology. He left amicably to move to his home state of Kansas to explore politics.

Gary Marcus
Joined: December 2016
Left: March 2017
Joined through an acquisition of his artificial intelligence company, Geometric Intelligence, and left three months after Uber created another A.I. research division.

Ed Baker
Joined: September 2013
Left: March 2017
A former Facebook executive who resigned after Uber began its internal investigation into workplace culture.

Rachel Whetstone
Joined: May 2015
Left: April 2017
A Google veteran who was in charge of policy communications. She departed after tensions with Travis Kalanick, Uber’s chief executive.

Anthony Levandowski
Joined: August 2016
Left: May 2017
A star engineer who was the subject of a lawsuit brought by his former employer, Google’s parent company, over claims that he stole intellectual property.

Josh Mohrer
Joined: January 2012
Left: May 2017
A controversial figure inside the company who was chastised in 2014 for tracking a reporter’s whereabouts using Uber’s technology.
“Over the last few months Uber has provided significant evidence to the court to demonstrate that our self-driving technology has been built independently,” Angela L. Padilla, Uber’s associate general counsel for employment and litigation, wrote in an email to employees. “Over that same period, Uber has urged Anthony to fully cooperate in helping the court get to the facts and ultimately helping to prove our case.”
She added: “We take our obligations under the court order very seriously, and so we have chosen to terminate his employment at Uber.”Johnny Luu, a spokesman for Waymo, declined to comment.
Uber had little choice but to cut ties with Mr. Levandowski, legal analysts said. The company risked being tarnished if it continued to stand by him, as if it were indirectly condoning his actions.
“I don’t think this was an easy decision, but at the end of the day, Uber did what it had to do,” said Elizabeth A. Rowe, a professor at the University of Florida’s law school and an expert in trade secrets law.
Firing Mr. Levandowski provides Uber “a way to cut off liabilities potentially and highlights that they were not acting willfully,” said Russell Beck, an intellectual property lawyer and founding partner at the Boston law firm Beck Reed Riden.
But firing Mr. Levandowski could mean that he becomes a witness against Uber if he were to claim, for example, that Uber executives looked the other way while he used proprietary information from Waymo to advance Uber’s self-driving car efforts. Uber has repeatedly said that it has developed its autonomous car technology on its own.
“It makes it easier for Mr. Levandowski to cut a deal, because he’s no longer associated with Uber,” Ms. Rowe said.
More grave for Mr. Levandowski are potential criminal charges. Judge William Alsup, who is presiding over the Waymo versus Uber civil case, referred the matter to the United States attorney’s office to look into possible theft of trade secrets. The action opened Mr. Levandowski — and perhaps Uber — to the possibility of criminal charges if the Justice Department decides to pursue the case.
Miles Ehrlich, a lawyer for Mr. Levandowski, did not respond to phone and email requests for comment. Court transcripts show Mr. Levandowski’s lawyers have advised him to assert his Fifth Amendment right.
Engineers like Mr. Levandowski are part of a small pool in Silicon Valley with the specialized know-how to lead efforts on self-driving cars. Technology companies and traditional automakers alike are sometimes paying tens of millions of dollars per employee.


The Race for Self-Driving Cars

There are increasing signs that autonomous cars have arrived — and may be driving on our city streets sooner than we think.
OPEN Graphic

Sebastian Thrun, a founder of Google’s self-driving car project who now leads the teaching start-up Udacity, said last year that the going rate for driverless car engineering talent was about $10 million a person. Ford Motor Company will spend $1 billion over the next five years on Argo AI, its artificial intelligence effort focused heavily on building self-driving car software.
As competition for that pool of talent has intensified, employers have become litigious. In January, Tesla sued Sterling Anderson — the former head of its Autopilot self-driving software division — claiming theft of confidential information and poaching of Tesla employees to join his own autonomous vehicle start-up, Aurora Innovation. The two companies settled the suit in April.
Mr. Levandowski, however, may not see his rich payday from Uber. He has been employed at Uber for less than a year and none of his shares have vested, according to a person familiar with the terms of the agreement, nor has he met certain project milestones determined at the time of acquisition. Typically, shares in Uber reach vested status over a multiyear period.
Uber will also face hardship as a result of the dismissal. Mr. Levandowski, who has dedicated his entire professional life to the study and development of robotics and self-driving research, was integral to nearly every component of the company’s autonomous operations.
Eric Meyhofer, a former deputy of Mr. Levandowski, will lead the autonomous vehicle project, overseeing hundreds of engineers working in San Francisco, Pittsburgh and soon in Toronto.
Uber has had its share of difficulties in recent months. Last week, the company said it had miscalculated the amount it had been paying drivers in New York, an error that could cost the company tens of millions of dollars.
Uber has also experienced a string of executives departing, including
Jeff Jones, president of the company’s ride-sharing operations, and Amit Singhal, the senior vice president for engineering, who left after accusations of sexual harassment while working at Google were unearthed shortly after he started at Uber.
This week, Josh Mohrer, a general manager at Uber who had been embroiled in controversy, left to join a venture firm. And the results of an investigation into Uber’s companywide culture are expected to be delivered to the company’s board of directors on Wednesday.


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