The ride-services company is contesting a lawsuit by Alphabet’s self-driving car unit, Waymo, which accused former Waymo engineer and current Uber executive Anthony Levandowski of taking technical secrets from Waymo and using them to help Uber’s self-driving car development.
If it were proven that Levandowski and Uber conspired in taking the information, that could have dire consequences for Uber, say legal and ride-hailing industry experts. Uber’s $68 billion (R907 billion) valuation is propped up in part by investors’ belief that it will be a dominant player in the emerging business of self-driving cars.
At issue is Waymo’s demand that US District Court Judge William Alsup in San Francisco issue an injunction barring Uber from using any of the technology that Waymo said was stolen. If Alsup issues a broadly worded order against Uber, it could all but shut down Uber’s self-driving car programme while court proceedings continue.
Alsup was not expected to rule immediately yesterday, but he may intimate which way he is leaning. At a hearing last month, Alsup warned Uber that it may face an injunction, saying of the evidence amassed by Waymo: “I’ve never seen a record this strong in 42 years.”
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Uber chief executive Travis Kalanick has said that autonomous vehicles, though still in their infancy, are critical to the company’s long-term success and future growth.
Indeed, autonomous cars promise to change the economics of the ride-hailing business. Among Uber’s biggest expenses is the cost of attracting drivers, who have a high turnover rate. And Uber’s ability to expand into suburban and rural markets, and areas with low vehicle ownership, and continue to offer a ride within three minutes, largely hinges on the availability of a network of self-driving vehicles.
More at stake
“This is central to Uber,” said Arun Sundararajan, a professor at New York University and author of the book The Sharing Economy, noting that Uber has more at stake than some of its rivals. “If Google can’t launch their self-driving car for 10 years instead of five, this will be a little blip in Google’s multibillion-dollar revenue. Uber is the one that really depends on it.”
Uber has faced a string of setbacks in recent months, including allegations of sexual harassment from a former employee and the public release of a video of Kalanick berating an Uber driver. The company, though still growing strongly, is losing hundreds of millions of dollars a quarter, according to information the company released last month.