
Uber must turn over information about its acquisition of Otto to Waymo - golfer
https://techcrunch.com/2017/04/25/uber-must-turn-over-information-about-its-acquisition-of-otto-to-waymo-court-rules/
======
Animats
Uber's self-driving system doesn't actually have to work beyond the demo
level. It's mostly to pump up the company's valuation. Uber is losing money,
and unless they find another sucker within a year, they're toast. They've
already had to borrow on unfavorable terms.[1]

Operating a fleet of self-driving cars may turn out to be a lousy business.
Uber's business model is built around others buying the cars, maintaining
them, replacing them, and doing all the hard work. All Uber does is run an
app.

Running a fleet of self-driving cars is running a car rental company. The
company will have to buy the cars, maintain the cars, fuel or charge the cars,
and obtain parking lots for storing the cars. They also have to figure out
what to do with the used cars after a few years. Car rental companies turn
over their fleets in a year or two, and are big sellers of used cars.

It's more likely that car rental companies will get into self driving than
that Uber will get into car rental by the trip.

[1] [https://www.crunchbase.com/organization/uber/funding-
rounds](https://www.crunchbase.com/organization/uber/funding-rounds)

~~~
timewarrior
I think the biggest cost in this business is the human component. For that all
you need to do is check the price difference between renting for a day or
getting taxi for a day.

Given a choice, Uber would love to be the first to have self driving cars.
Once they do that their business model scales predictably with capital.

Whoever gets self driving technology right, will own all transportation and
logistics - which is huge!

However, I doubt they can do it. The quality of engineering talent is subpar
compared to Google. Given that they couldn't compete with R&D they probably
resorted to other means.

~~~
NamTaf
_For that all you need to do is check the price difference between renting for
a day or getting taxi for a day_

There's also the burden of convenience. A taxi is an instant, summonable
affair that ends completely with the trip. A hire car has to be hired and
returned to a specific location, you have to stow it during your hire period
and you have to fuel it. Beyond the tangible costs of fuel, parking, etc.
there's also the opportunity cost. For exmaple, people will pay for
convenience of a car to pick them up and take them home when drinking, and
they may only need the hire car for a couple of 10 minute bursts but you can't
hire a car for less than a 24 hour period. Both of those help buoy the cost of
a taxi.

I'm not suggesting you're wrong, but it's not as simple as [hire car] +
[driver] = [taxi] from a cost perspective.

~~~
pricechild
I don't think that's necessarily true... but I don't think anyone's cracked it
yet either.

There's [https://www.car2go.com](https://www.car2go.com) which ran for a year
or so in my city but has since shut down. You could leave the car within the
bounds of the city.

There are also various bike schemes with a similar idea?

~~~
ghaff
Car schemes exist like Zipcar. I know people who live in cities and don't own
a car who use them all the time. But it's turned out to be a pretty niche
business. Zipcar is the highest profile of these businesses, at least in the
US, AFAIK and even they ended up bought by Avis.

I suspect that with all the VC money subsidizing Uber et al, for most people
the gap between regular rentals for a day+ and just calling an Uber isn't
large.

~~~
throw_away
car2go and reach now are much more usable than zipcar.

* cars are littered throughout the city rather than in designated parking spots

* cars are rented by the minute rather than by the hour

* cars don't have to be returned to where you got them from

The last point is the game changer. Now, it's feasible to do things like drive
to the bar, but get a taxi back, or go on a long walk and grab a car back home
when you're tired out.

------
ziszis
I assume that Otto execs indemnified Uber with respect to the intellectual
property, given that it was a primary value in the acquisition. If so, Uber
can claw back the $680M they spent.

If not, it would be the worst IP miss since Ebay acquired Skype for $2
Billion, only to find out that they didn't own Skype's IP or have access to
the source code [0].

[0] [https://techcrunch.com/2009/09/18/new-lawsuit-brings-
clarity...](https://techcrunch.com/2009/09/18/new-lawsuit-brings-clarity..).

~~~
woodandsteel
>I assume that Otto execs indemnified Uber with respect to the intellectual
property, given that it was a primary value in the acquisition. If so, Uber
can claw back the $680M they spent.

Uber's big problem is not the $680 million. It's that if Waymo's claims are
true, then Uber's self-driving car program will likely be shut down, and they
will have to start all over from scratch.

And that in turn means other companies are going to beat them, likely by
years, to fielding self-driving taxis, and that would be the end of Uber.

~~~
diebir
How did you figure that it would be "shut down" and what does this mean in
practical terms?

~~~
erikpukinskis
The court orders them to stop using any code or designs that were touched by
former Google employees, AKA all of their code and designs.

They would then have to hire a new team of people who never worked at Google,
or with the former Googlers, and do a "clean room" reimplementation of a self
driving vehicle, based on publically available materials and tools.

~~~
woodandsteel
Right. And the very first step would firing Levandowski, the head of their
self-driving car program.

~~~
paul7986
Followed by the board somehow firing Kalanick to save Uber from himself!

------
wil421
This season of Silicon Valley is getting good.

~~~
asafira
I loved the episode with the new-age pushing machine for juice.

~~~
vchakrav1
And the delivery bot followed on foot by a human.

------
Operyl
And the plot thickens. If Waymo is correct, and such a contract was signed,
they seem to be as good as toast.

~~~
tyingq
Two documents in play...

The "Uber agrees to defend Levandowski" document and the Uber-Otto due
diligence documentation.

Levandowski asked for the former to be redacted, was denied. The article says
it was signed just a few days after quitting his job at Google.

~~~
Operyl
Yeah, sorry should've been a bit more specific I guess. I was referring to the
"agree to defend Levandowski" document.

------
bitmapbrother
Perhaps this is standard practice, in the valley, to make the company that
acquired your company defend you in the event that the acquisition resulted in
a lawsuit, but this revelation just adds another red flag to the already long
list of red flags that Uber ignored when acquiring Otto. IMO, Uber clearly
knew what he did, either through disclosure or due diligence, and disregarded
it. Considering their company culture of playing fast and loose with the rules
until you get caught this is not surprising.

>"Waymo has claimed that Levandowski signed an agreement with Uber’s lawyers
just a few days after quitting his job at Google, requiring Uber to defend him
if the company’s acquisition of Otto resulted in a lawsuit."

>"Mr. Levandowski argues that he is entitled to relief under the Fifth
Amendment because production of the unredacted privilege log could potentially
incriminate him. We are not persuaded that the district court erred in its
ruling requiring defendants to produce an unredacted privilege log,” the
United States Court of Appeals for the Federal Circuit ruled."

>"The order also opens the door for Waymo to request a copy of the due
diligence report that Uber commissioned while it was in the process of
acquiring Otto. Waymo has claimed that the due diligence report could contain
evidence that Uber knew Otto was using stolen technology"

~~~
alain94040
You are missing the key point: that agreement was not signed when Otto was
acquired by Uber, it was signed days after Levandowski left Google, before
there should have been any discussions with Uber regarding the acquisition of
a startup that didn't exist yet. That is really bad optics.

~~~
ithinkinstereo
Are there any legitimate reasons why Uber would sign this agreement?

Why would a company sign an agreement with the founder of a startup about the
acquisition of said startup before it even exists?

This lends credence to Google/Waymo's argument that Uber and Levandowski where
scheming from the get-go. Bad optics, indeed.

~~~
woodandsteel
Waymo claims it has evidence that Levandowski and Urber were talking for
months before he left Waymo.

In addition there is the fact the he secretly started a self-driving car
company at least a year before. The whole thing looks like he and Uber planned
the whole scheme beforehand.

------
asafira
Question: how public are these hearings? Is there a place we could get
transcripts of them? (I remember previous days had snippets of transcripts (at
the very least))

~~~
alain94040
A lot of the motions are posted here: [https://www.courttrax.com/trending-
cases/#317cv00939](https://www.courttrax.com/trending-cases/#317cv00939)

------
matt4077
Here's a link to the actual order, from ars, which is where the cool old
school journalists work that still link to sources:
[https://arstechnica.com/wp-
content/uploads/2017/04/CAFC.Waym...](https://arstechnica.com/wp-
content/uploads/2017/04/CAFC.Waymo_.Uber_.order_.pdf)

------
inlined
I'm really curious how Alphabet even suspects that Levandowski signed this doc
days after he quit. Anonymous/confidential tip?

~~~
tyingq
They didn't know. Levandowski's lawyer outed its existence in a hearing,
trying to use it as some basis for redacting or witholding other documents.

 _" Ramsey pointed to a joint defense agreement between Levandowski and
various law firms that meant that nothing should be revealed."_

I assume it was dated.

[https://arstechnica.com/tech-policy/2017/04/judge-accuses-
ub...](https://arstechnica.com/tech-policy/2017/04/judge-accuses-uber-and-
levandowski-of-obfuscation-in-waymo-case/)

Perhaps a move he regrets?

Edit: That arstechnica article has much more info on how this played out than
the main linked article for this thread.

~~~
ehsankia
Wow, misstep after misstep. This is really turning out very poorly for Uber.
All because of a bunch of accidental events.

~~~
tdb7893
In a more cynical view it could be because he is actually super guilty and
many of these "missteps" are because the alternatives are even worse

~~~
woodandsteel
Not just he but also Uber.

------
home_boi
I don't get Levandowski's 5th amendment claim on the privilege log. Doesn't
the 5th amendment only stop the individual from incriminating himself?

How can he argue that other people (or an entire company in this case) are not
allowed to incriminate him?

Has anyone successfully claimed 5th amendment and forced other people/entities
not to incriminate him/her?

~~~
hiddencost
'The statement at issue need not directly implicate the witness as long as it
"furnish[es] a link in the chain of evidence needed to prosecute the claimant
for a...crime." Hoffman v. United States , 341 U.S. 479, 486-87 (1951).'

[http://corporate.findlaw.com/law-library/taking-the-fifth-
am...](http://corporate.findlaw.com/law-library/taking-the-fifth-amendment-in-
front-of-the-federal-grand-jury-in.html)

------
rodionos
It's high time for mods to launch ubernews, they are in the spotlight every
single day. 71 submissions last week [0].

0:
[https://hn.algolia.com/?query=uber&sort=byDate&dateRange=pas...](https://hn.algolia.com/?query=uber&sort=byDate&dateRange=pastWeek&type=story&storyText=false&prefix=false&page=0)

~~~
ethbro
Were you on Slashdot when SCO was ongoing? If not, this is what a corporate
titan proxy war looks like in the news cycle.

And it's objectively defensible. The outcome of this lawsuit will shape what
an incredibly important future technology looks like and who controls it.

~~~
macrael
SCO?

~~~
rory096
You're in for a treat.

[https://en.wikipedia.org/wiki/SCO/Linux_controversies](https://en.wikipedia.org/wiki/SCO/Linux_controversies)

~~~
davidw
I remember showing up to their local meeting with some other Linux guys in the
area and politely calling bullshit on their lawsuit. It was kind of fun,
although I'm not normally one to court controversy.

------
guelo
Where's the district attorney? If someone is claiming the 5th because he might
be incriminated that seems like pretty strong probable cause for a criminal
investigation.

~~~
JabavuAdams
There's nothing wrong or shady about claiming the 5th. It's an important legal
protection. Why would you seek to diminish or undermine something that might
one day protect you?

~~~
mikeyouse
There's a pretty big difference between your fifth amendment rights in civil
cases vs. criminal cases. California extends more protections than many states
in civil cases, but in many places it can absolutely be used against you in
adverse inferences..

[https://www.washingtonpost.com/news/volokh-
conspiracy/wp/201...](https://www.washingtonpost.com/news/volokh-
conspiracy/wp/2015/08/30/what-happens-if-you-take-the-fifth-in-a-civil-case-
an-important-california-law-correction/?tid=a_inl)

