With Waymo Settlement, Uber CEO Makes His Mark
Posted February 9, 2018 6:31 p.m. EST
SAN FRANCISCO — For weeks, Dara Khosrowshahi, Uber’s chief executive, and some of his lieutenants had worked behind the scenes to repair the ride-hailing company’s fractious relationship with Waymo, the self-driving business spun out of Google.
A Waymo lawsuit over autonomous car technology, in which it accused Uber of stealing trade secrets, was about to go to trial in a San Francisco courtroom for all to see. So Khosrowshahi, who was appointed Uber CEO late last year, leaned on his history with Google from his previous job as chief executive of the travel site Expedia.
Khosrowshahi worked to coax Google’s founders, Larry Page and Sergey Brin, and to let them know that Uber had turned over a new leaf, according to two people briefed on the situation, who asked not to be identified because the details were confidential. Tony West, Uber’s recently appointed general counsel and a former Justice Department official, also jumped into the negotiations, these people said.
The actions helped lead to a compromise. On Friday, four days after the trial began and revealed some embarrassing testimony, Uber and Waymo announced they had settled the trade secrets dispute. Under the agreement, Waymo dropped the suit and will receive 0.34 percent of stock in Uber. Uber also said it could have handled some past actions around driverless car tech differently.
The settlement signified something else too: Uber is Khosrowshahi’s company now. Since stepping inside Uber’s doors last fall, the 48-year-old has made it clear he wants to put the company’s checkered past behind it as fast as possible. With the Waymo deal, he showed the many tactics he plans to use to accomplish that — expressions of regret, accompanied by conciliation, compromise and efficiency. Call him the diplomat-in-chief.
Khosrowshahi’s modus operandi is to clear the way for the big tasks ahead for Uber, said the people who were briefed on the matter. One of those tasks is taking the ride-hailing company public next year, in what is likely to be a blockbuster initial public offering. As a private company, Uber is valued at around $70 billion.
“My job as Uber’s CEO is to set the course for the future of the company: innovating and growing responsibly, as well as acknowledging and correcting mistakes of the past,” Khosrowshahi said in a company blog post.
His fans applauded the Waymo compromise. “This is what real leadership looks like,” Chris Sacca, a venture capitalist who was an early investor in Uber, said in a tweet. “Acknowledgement, apology, commitment, optimism.”
The deal with Waymo is the latest maneuver by Khosrowshahi to shed the baggage of Uber’s past. For months, he has been on a mea culpa tour to mend fences with legislators around the world for how Uber often barreled into markets while flouting local laws. He has publicly apologized for an enormous hack that briefly compromised the information of 57 million drivers and riders. And he has introduced a new set of cultural values for Uber, replacing a list created by Travis Kalanick, the former chief executive who was pushed out in June.
Internally at Uber, Khosrowshahi has also made changes, including bringing on a new slate of lieutenants. In December, the ride-hailing company said Barney Harford, a former chief executive of the travel site Orbitz, would become its chief operating officer. In October, Uber hired West, a former federal prosecutor, from PepsiCo. West has since been restructuring the company’s legal department.
Khosrowshahi’s style is markedly different from that of Kalanick, who took a no-holds-barred approach to the business world. In court this week for the trade secrets trial, Kalanick testified that he had moved from seeing Google as a potential partner for Uber to an existential threat. Google’s self-driving vehicle research, he said, could eventually have crushed Uber.
Kalanick also testified that he became friendly with Anthony Levandowski, a former top self-driving researcher at Google. Levandowski started a self-driving trucking startup, Otto, with the help of other Google engineers he took with him, while downloading proprietary information from the company. Kalanick bought Otto in 2016, an acquisition that led to Waymo’s case against Uber. (Uber has since fired Levandowski.)
On Friday, Kalanick struck a defiant tone about the settlement. “Our sole objective was to hire the most talented scientists and engineers to help lead the company and our cities to a driverless future,” he said in a statement. “The evidence at trial overwhelmingly proved that, and had the trial proceeded to its conclusion, it is clear Uber would have prevailed.”
For now, Khosrowshahi has appeared to smooth over the sore spots with Waymo. Waymo will still be able to pursue a separate legal proceeding against Levandowski, which is unfolding as a closed-door arbitration.
“While I cannot erase the past, I can commit, on behalf of every Uber employee, that we will learn from it, and it will inform our actions going forward,” Khosrowshahi said in his blog post.