Ride the Lightning

Waymo and Uber Reach Surprise $245 Million Settlement

February 12, 2018

As Reuters reported, Waymo v. Uber came to an abrupt and surprising end in an announcement made last Friday. Under the terms of the settlement, Uber will pay $245 million worth of its own shares to Waymo's (owned by Alphabet) self-driving vehicle unit to settle a legal dispute over the alleged theft of trade secrets. It seems that four days of testimony was enough.

So Waymo gets a 0.34 percent stake in Uber, worth about $245 million based on Uber's current $72 billion valuation, a Waymo representative said. The settlement includes an agreement to ensure that Waymo confidential information is not being incorporated into Uber technology, which Waymo has said was its main goal in bringing the lawsuit.

Uber got out of this mess pretty cheaply, it seems to me (though read the analysis later in this post). Remember that in last year's settlement talks Waymo was seeking at $1 billion from Uber. I can certainly understand that the string of scandals that has plagued Uber gave it plenty of motivation to settle the case – and this lawsuit had seriously slowed down Uber's self-driving car plans. Uber had planned to have self-driving cars in 20 cities by the end of 2018, 50 cities by 2019 and 150 by 2020, according to documents shown in court. It is a long way from achieving those numbers.

Uber's chief executive officer, Dara Khosrowshahi, expressed "regret" for Uber's action in a statement made on Friday. He 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 and software represents just our good work."

I thought it was interesting that Elizabeth Rowe, a professor at the University of Florida Levin College of Law, analyzed about 150 trade secret verdicts through 2014 and said $245 million would rank as the second highest. Given that landscape, along with the fact that Alphabet CEO Larry Page could have had to testify next week, she said the settlement makes sense for Waymo. "Their risks would have gone up on many levels," Rowe said.

I will miss the daily gossipy reports from the trial. If you are interested in a candid, unrestrained view of "who blinked first," The Verge had an interesting post. I certainly agree that Uber wanted no part of "this shitstorm."

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