
The Uber Bombshell About to Drop - dantiberian
https://danielcompton.net/2017/03/14/uber-bombshell
======
harryh
_Uber passengers only pay 41% of the cost of trips, with investor capital
making up the difference_

FWIW this assertion (which isn't really core to the central thesis of the
post, but still) is wrong. That number comes from

[https://ftalphaville.ft.com/2016/12/01/2180647/the-taxi-
unic...](https://ftalphaville.ft.com/2016/12/01/2180647/the-taxi-unicorns-new-
clothes/)

but the author of that story misread the data. Uber only counts their cut as
revenue not the full cost of the ride.

Despite this repetition (now corrected, thx!) of this incorrect data I find
the overall thesis of the post compelling! As a disinterested bystander, it
will be interesting to see how it all plays out.

EDIT: It turns out the original 41% statement comes from
[http://www.nakedcapitalism.com/2016/11/can-uber-ever-
deliver...](http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-
one-understanding-ubers-bleak-operating-economics.html) not from the Financial
Times. It can be hard to trace these things back sometimes.

~~~
uptownfunk
You know what, I may get downvoted for this, but my take is you just can't
stop these guys. They'll do whatever it takes to win. I probably spend around
$2,000 USD on uber trips per month. And frankly, as much disturbing stuff I
hear about these guys, Uber beats the heck out of renting a car in a snowy
area (especially after having taken a red-eye to a client site). It also beats
the crap out of taking a cab in most places, I usually have to navigate to
where I want to go and the taxis aren't as clean or the drivers as friendly.
They could double the price, and as long as my company reimbursed it, I'd
still take it, because they've just got it down so well. Lyft and the other
competitors suffer from availability issues, and the average time it takes for
a driver to get to me on Uber is much less than the other ride shares. They've
got their product down pat, it's so well designed. What I don't support
however is their workplace attitude towards women (whom I applaud for coming
out about it, takes guts.) It's made me rethink using the service a few times,
but when you've got a product that good and such a demanding schedule, the
(sad?) truth is that you'll take whatever little comforts you can that make
your life that much easier.

~~~
UweSchmidt
I'm curious how one would spend $2000 on uber per month? For what group of
people would that be typical?

~~~
pja
At a guess: cross country sales travel. You could easily rack up 2 or 3 fairly
long distance Uber trips / day doing that (Airport -> Hotel -> Client ->
Airport to travel to the next client)

------
bedhead
Among the circumstantial evidence, the self-funding aspect is what jumped out
at me the most. This is the equivalent of a hedge fund manage buying something
based on inside information, but only for his personal account. Why cut other
people in on the wink-and-nod-guaranteed payday? Besides, Lewandowski couldn't
realistically raise money through proper channels if his pitch amounted to, "I
stole stuff from Waymo."

~~~
pm90
In hindsight, a better crook would have accepted outside funding just to cover
this line of attack (Assuming the Otto Founder is guilty; of course it might
be otherwise).

~~~
iandanforth
Due diligence during funding is designed to uncover these kinds of IP issues.
That would probably have been a larger risk.

~~~
archerface
They could have taken capital from Uber to fund themselves and then waited
longer for Uber to acquire them.

------
Analemma_
Yeah, this is a big deal. Uber has gambled everything on self-driving cars,
what with their absurd burn rate and all. If that gets shut down because of
trade secret injunctions, I don't think they have time to pivot to another
strategy, especially after their reputation has nosedived.

~~~
NathanKP
I'll be really interested in seeing what happens if Uber can't recover from
the burn rate and make a sustainable business without self driving.

I can see in the best possible scenario we end up with more cities like
Austin, Texas that have their own nonprofit ride sharing app. I actually have
huge respect for what Austin did in banning Uber and Lyft and making their own
app (Ride Austin) that isn't designed to make investors and owners rich,
instead just benefit drivers and riders.

~~~
bbatsell
Clearing up some serious misconceptions here:

1) Austin did not ban Uber or Lyft. The city council passed an ordinance that
required a gradually increasing percentage of rideshare drivers pass an FBI-
approved fingerprint background check. (These rules are in place in other
locales in which Uber operates, such as NYC and Houston.) Uber and Lyft formed
a PAC that got a proposition on the next local election ballot that would have
overturned the ordinance, then spent $9 million on a massive advertising
campaign supporting the proposition. The proposition failed overwhelmingly.

2) Uber and Lyft stopped providing services of their own volition within 48
hours. Considering they abide by the same regulations in other cities, it
seems pretty obvious to me that it was done in retaliation in order to show
other cities considering doing the same that they will actually pull out.

3) Several upstart ridesharing companies immediately jumped into the market
and were fully operational in less than a month and are complying fully with
the regulations. (Examples are Fasten, Fare, RideAustin, and GetMe.)

4) RideAustin is registered as a non-profit organization, formed by several
local tech entrepreneurs affiliated with Capital Factory, an Austin
accelerator/VC firm. It is not owned or operated by the city in any fashion.

~~~
mahyarm
Are you sure it was to make an example or there was something unique /
different about Austin that made both companies not want to provide business
there?

~~~
csours
It's my impression that they thought of Austin as an "innovation friendly"
place and they were "offended" that Austin tried to regulate them.

------
mmanfrin
Outside of the case, the most striking thing to me about this is the level of
detail that Google has over the logs and actions of their laptop. They were
able to tell that a _memory card was plugged in for 8 hours_ a year ago?

I have trouble finding exactly how a customer encountered a 500 10 minutes
ago.

~~~
nunez
I was a Windows engineer for Google's Corp Eng PaaS SRE team and have
familiarity with this topic.

It's not hard to get this data or set this data collection up on a Windows
domain or machine. Anyone can set this up as long as you have the TBs to
collect the data and the presentation/searching layer to find it.

Windows has the ability to log _everything_ , including device
installs/uninstalls, file opens/closes/creation/deletion, logons/logoffs, you
name it. The Windows Auditing library is really, really, really extensive.

Additionally, setting this up in Active Directory is really easy, both
manually and magically with Powershell. It takes about ten minutes or so.

As you would iamgine, most of these policies were enabled on the domain to
which most users authenticated and the data it collected was siphoned off to
essentially a giant cluster of syslog servers.

In fact, just about any domain will audit device plugs/unplugs. Had Anthony
known about this (it's easy to find out even if you're not an admin), he
would've not plugged in that memory stick :)

In general, it's pretty hard to do stealthy stuff on Google's network.
Everything is logged eight ways to Sunday, especially with GAIA and key-based,
two factor auth to EVERYTHING. And unlike most other networks, I wouldn't put
it past their security engineers to find shady behavior in a moment's notice.

~~~
obstinate
I don't think GAIA has been publicly commented on by the company, in case that
matters to you at all. Could be wrong, though, as it seems the term is present
in the deposition and un-redacted.

~~~
MertsA
FWIW Google seems to refer to the GAIA ID in stuff like random error messages,
documentation for Google Apps, and in data downloaded from Google Takeout. If
it's not supposed to be public information then Google isn't doing a very good
job.

------
GCA10
For all the noise and excitement at the start of these clashes, don't they
usually get settled with a licensing agreement that both sides can live with?

Sometimes we also see a medium-sized payment (not ruinous) to address the
allegedly bad conduct. That usually gets paired with some lawyer-like phrases
that amount to a blend of quasi-apology and face-saving evasions.

It's still an interesting suit. But after Apple/Samsung, Oracle/SAP and many
others, it's hard to expect that the eventual resolution lives up to the pre-
trial buildup.

~~~
techthroway443
Why would Uber be awarded licensing terms they could "live with" for code they
(allegedly) outright stole from a competitor?

~~~
tannhauser23
Because lawsuits can drag on for years (if not decades!) and Google is a major
investor in Uber. Google/Waymo might not want to actually destroy the company.

~~~
cma
But if Google won a huge judgement they would outright own the company and not
just be an investor.

~~~
GCA10
They'd own a broken company. Bear in mind that this sort of litigation can run
five to ten years if you let the lawyers on both sides wrestle to their
hearts' content. It becomes all consuming. Executives spend much of their time
preparing for depositions, tussling about what ambiguous documents mean,
tussling about what obvious documents might mean if you try hard to
misinterpet them, etc.

It's no fun to be working in such an environment. Everyone who can afford to
get out, gets out.

~~~
chx
> tussling about what obvious documents might mean if you try hard to
> misinterpet them,

In this case, it really sees this is cut high and dry. We will see but this
really looks bad.

------
wyldfire
This part looks to be the most smoking-gun:

> December 13, 2016 - A Waymo employee was accidentally copied on an email
> from one of its LiDAR-component vendors titled OTTO FILES. The email
> contained a drawing of what appeared to be an Otto circuit board that
> resembled Waymo’s LiDAR board and shared several unique characteristics with
> it. (Filing 59)

~~~
wavefunction
"accidentally copied"

Thank god for the honest among us.

~~~
eco
It could have also been a simple mistake. Several Otto employees came from
Waymo. Not hard to send email to John Smith <jsmith@google.com> instead of
John Smith <jsmith@otto.com> by mistake if you were in regular contact with
that person as part of their role at a previous job doing largely the same
thing.

~~~
ghaff
I like autocomplete email addresses but I do worry that the day will come when
I send something embarrassing or damaging to the wrong person. I never have
afaik although I have sent a couple emails that resulted in a frantic follow
up to please don't read the prior message.

~~~
Tempest1981
You can have some Mail apps highlight (in red) email recipients with "outside"
domains.

[https://support.apple.com/kb/PH19137?locale=en_US](https://support.apple.com/kb/PH19137?locale=en_US)

[https://arstechnica.com/civis/viewtopic.php?f=15&t=1299903](https://arstechnica.com/civis/viewtopic.php?f=15&t=1299903)
(Outlook macro)

------
booleanbetrayal
I can't imagine what Lewandowski and Uber were thinking here. The timeline is
just too constrained to even be taken seriously.

~~~
themgt
Even at the time, knowing none of the characters or background I found Otto a
very odd startup, one I almost didn't believe looked legit, and their rapid
acquisition by Uber was one more "huh, strange" moment - how could they have
bootstrapped out of nowhere and had tech worth that kind of money so fast?

It's almost hard to believe Uber would be so brazen as to put something like
this together, except that breaking the law has been Uber's business model
since day 1.

~~~
transfire
> _except that breaking the law has been Uber 's business model since day 1._

So tired of hearing this. It's just parrots talking in the echo chamber. Show
me a court verdict that Uber broke the law.

~~~
asimov_
"Uber will pay as much as $25 million to settle a civil lawsuit with the
district attorneys in Los Angeles and San Francisco"
[https://www.nytimes.com/2016/04/08/technology/uber-
settles-s...](https://www.nytimes.com/2016/04/08/technology/uber-settles-suit-
over-driver-background-checks.html?_r=0)

"Uber settles driver lawsuit over background checks, to pay $7.5 million"
[http://www.reuters.com/article/us-uber-lawsuit-
idUSKCN0Z12GS](http://www.reuters.com/article/us-uber-lawsuit-idUSKCN0Z12GS)

"Uber has agreed to pay $28.5 million to settle litigation brought by
customers who alleged the ride hailing service misrepresented the quality of
its safety practices and the fees it charged passengers"
[http://www.reuters.com/article/us-uber-tech-safety-
settlemen...](http://www.reuters.com/article/us-uber-tech-safety-settlement-
idUSKCN0VK2J1)

Need more?

~~~
aianus
Settlements are not admissions of guilt.

~~~
nathanaldensr
Nor are they admissions of innocence. However, if they were to lean one way,
I'd say guilt is the direction they lean.

~~~
hammeiam
I don't think anyone has ever admitted to being innocent.

------
rsp1984
_(Possible) Consequences: ... Without any way to raise more money or reduce
their costs, Uber runs out of money and folds._

Highly unlikely. Why? Investors who stomach multi-billion dollar annual losses
will probably just shrug off a mere lawsuit or a "bad media narrative". If the
choice is to either write off $15 billion or to give another couple to help
the company go through a rough patch (what a buying opportunity!) I think I
know what investors are going to do.

They may demand Kalanick's head in the process (and I think they will -- not
that it would really hurt him much personally though...) but seriously a whole
nother level of crap would have to happen before investors start getting
comfortable with the thought of letting go those $15 billion.

~~~
trprog
As they say, if you owe the bank $100 you have a problem. If you owe the bank
$100 million the bank has a problem.

------
d--b
It's not a bigger bombshell than what was already in the news. We know what
stealing means. The guy is an engineer at Waymo and plugs a USB stick in a
laptop to download 9GB of code. And he hoped to get away with this? I'm pretty
sure everyone at Google knew, they were just waiting to time it right.

"Hey, what about now? When Uber is taking fire from all directions?"

~~~
_audakel
i can't believe someone as smart as he is would just blatantly stick in a usb.
With how much money he was going to make he could have researched some more
annomous ways to get it. Not the least would be to intercept a team members
auth/pw and use that to access the data.

~~~
londons_explore
He had a Windows laptop according to the filing.

Engineers rarely use windows. He was also a manager at Google. Very techy folk
don't take on manager responsibilities because it quickly saps time.

Both those things tell me he was more of a people person than a technical
person.

~~~
danans
A lot of engineers use Windows, especially in circuit design since a lot of
the design tools are only on Windows.

And as a Googler, I can comfortably state that most engineering managers are
very technical. I know because I've worked under many of them.

------
Animats
Uber, in their usual rule-breaking way, may come out OK on this. Suppose
everything in the complaint against Uber is proven true. Google/Alphabet/Waymo
gets an injunction against Uber using their rotating LIDAR, a clunky
technology that's on the way out. (The future of high-volume 3D LIDAR is
either flash with a staring sensor or MEMS with chip-sized moving mirrors.)
G/A/W gets paid a few billion dollars, but far less than the $16 billion Intel
just paid for Mobileye's inferior technology. Uber has enough cash for that.

~~~
VikingCoder
> a clunky technology that's on the way out.

How much do you want to bet?

~~~
Animats
Quantergy, Velodyne, and Leddar have all announced low-cost solid-state LIDAR
units for self-driving cars, to be available in 2017. Somebody is going to
deliver.

Continental is targeting shipments in 2020. They're a large auto parts maker,
and they bought the technology from Advanced Scientific Concepts, which has
sold good but expensive flash LIDAR units for years. They're demoing now, and
will probably end up selling millions of the things to auto companies.

------
mikepurvis
No relationship between Uber's Ottomotto and the self-driving vehicles of OTTO
Motors: [https://www.ottomotors.com/company/newsroom/press-
releases/o...](https://www.ottomotors.com/company/newsroom/press-
releases/otto-motors-releases-statement-on-waymo-v-ottomotto-lawsuit)

Disclosure: employee of Clearpath, the company behind OTTO Motors.

~~~
Fricken
And we don't want to confuse Otto motors or Ottomotto with Ottomatika, the CMU
AV spinoff acquired by Delphi.

------
salimmadjd
I actually think this might be a blessing in disguise for Uber. I always
argued self-driving cars would destroy Uber should Apple or Google want to
enter this space.

Why? Because self-driving cars are basically a fleet service driven by a
software. Once you remove the driver (where Uber spent so much acquiring) The
only differentiator is the consumer facing experience. Neither Uber or Lyft
will have as much power as Apple and Google since they ultimately own the
mobile experience.

I ultimately envision this business as kind of a Kayak mobile on the phone
managed by Siri or Google/Apple maps that will call the nearest taxi or the
cheaper rate aggregating from multiple possible vendors. Larger fleets (Uber,
Apple, Google) to smaller individually manage fleets. Car companies might
decide to also enter that market in collaboration with financial underwriter.

So having a network of drivers ultimately gives Uber some leverage and
removing them from the equation, I think it'll actually destroy Uber. This is
why I think, this could be a blessing in disguise.

~~~
memmcgee
Uber's drivers aren't really fans of them though, nor are they loyal to a
single company. Uber could disappear tomorrow and all its drivers would be
fine on Lyft.

~~~
alpha_squared
This may no longer be the case, but doesn't Lyft have a stricter vetting
process than Uber? It could be that some (most, none, all?) of Uber drivers
may not be that happy with Lyft.

~~~
linkregister
Not really. I'd be surprised if most Uber drivers weren't already at least
onboarded to Lyft. About half of the drivers I see have two phones on cradles
in their cars.

------
payne92
I'll be curious to see if the Uber-Otto acquisition gets strained.

It's common for the acquired company to make specific "representations and
warranties", particularly around IP.

"We own our IP and didn't steal it" is typical, and some percentage of the
deal is held back for ~1-2 years in case there is a problem.

But if there's fraud, all bets are off.

Does Uber throw Otto under the bus? It would be "The Uber Way", based on
what's been published recently.

~~~
PhantomGremlin
_Does Uber throw Otto under the bus?_

My prediction is that Kalanick and Levandowski will soon be attempting to
throw each other under the bus to save their own job, money, and reputation.
With any luck they will _both_ wind up under a bus.

~~~
thewhitetulip
I have always wondered where such CEOs/founders end up post the fiasco.

------
flylib
"That Otto hadn’t received funding from any VC’s is unusual. With 91
employees, getting paid $150k/year (this might even be too low given they are
working on self-driving cars, one of the hottest spaces in tech right now),
they would have had a $13.6 million/year burn rate just on salaries. Otto
always aimed to get to market quickly, but getting to profitability without
funding seems like it would have been very hard, especially on the accelerated
timescale they were working towards and the need to likely hire many more
people to get to production. All of Otto’s public self-driving car and truck
competitors have taken venture funding. However, as someone working on a
bootstrapped SaaS application, I’m sympathetic to wanting to self-fund."

Anthony Levandowski has a personal net worth in the hundreds of millions, that
is not counting the other founders plus they could raise money at a whim, or
get acquired whenever they wanted

"The next day, January 15, 2016, Mr. Levandowski’s venture 280 Systems - which

became OttoMotto LLC - was officially formed (though it remained in stealth
mode for several

months). On January 27, 2016, Mr. Levandowski resigned from Waymo without
notice. And on

February 1, 2016, Mr. Levandowski’s venture Otto Trucking was officially
formed (also

remaining in stealth mode for several months)."

not sure if that timeline is accurate, any way to check when the ot.to website
was registered? the site used for looking up
[http://whois.domaintools.com/280systems.com](http://whois.domaintools.com/280systems.com)
doesn't work for ot.to

~~~
bitmapbrother
Where does it say Anthony Levandowski is worth hundreds of millions?

~~~
Fricken
Levandowski sold 3 companies to Google for a rumoured 500 million. He then
received another massive undisclosed sum for meeting benchmarks on Google's
self driving car program, along with several other key team members.

------
vkou
Related HN thread on Uber acquiring Otto (From 7 months ago):

[https://news.ycombinator.com/item?id=12315205](https://news.ycombinator.com/item?id=12315205)

The consensus seems to be: "Huh, that's weird."

------
matt_wulfeck
_> December 3, 2015 - Mr Levandowski searched for instructions on how to
access Waymo’s design server on his work laptop. Based on Gary Brown’s
deposition (a Google forensic security engineer) this was an SVN server.
(Brown 15)

> December 11, 2015 - Anthony Levandowski installed TortoiseSVN and downloaded
> 9.7 GB of data from the SVN repository. (Brown 17)

> December 14, 2015 - A USB card reader was attached to the laptop for eight
> hours. Google doesn’t appear to have logged what the laptop did over that
> time, but the implication is that data was copied from the laptop to a
> memory card. (Brown 18)_

If these three things are true, then that looks extremely bad for Otto. I
imagine they'll be a lot of questions regarding the purpose of that USB stick.

------
patmcguire
How credible are all these logs? Email records (came up in Oracle Android
case) are one thing, emails are a known thing. But how trustworthy are Google
Drive logs, a record that only exists within Google, when what they've
recorded helps their case? I'm not casting aspersions, just curious how a new
kind of evidence plays out.

~~~
Xorlev
Let's not pretend that you can't fabricate emails too.

I strongly suspect that the existence and timestamps of the Drive logs can be
verified at multiple levels and exist in backups made around that time.

HTTP logs as well as MTA logs have been provided as evidence before, those too
could be fabricated.

~~~
patmcguire
Yeah, I didn't mean to imply fabrication: just there are going to be hiccups
and weird inconsistencies in any data source, and it's not one where the
hiccups have been seen before in a legal context. You have multiple levels,
some slightly disagree, which is correct?

Email you have a bunch of different parties: the sender, the receiver, the
servers in the middle, all of which are going to record something, and maybe
they differ in weird ways, but if you got it you go it.

------
free_everybody
I read the whole article and it was very interesting. Thanks for the info!
However, could someone explain to me why Uber is losing money from their taxi
services? Obviously the drivers take home a large chunk of revenue, but what
about the rest of the money they receive from the fares? Shouldn't that be
enough to cover the overhead of running a mobile app? Are they trying to do
too much? What gives?

~~~
clay_to_n
Everything else they're invested in. Subsidizing rides (in new markets I think
they sometimes pay the drivers more than the passenger pays) maybe. But new
R&D, lik building self-driving cars, doesn't come cheap.

~~~
martinald
I think people are really underestimating how generous these subsidies are.
They're not usually on the riders side, but the drivers.

In Edinburgh, Scotland over NYE all Uber drives were on £75/hr minimum,
regardless of how many rides they took. A friend of a friend who decided to
ride for them that night said he was out for about 7 hours and picked up about
10 people the whole night (was very busy after midnight but quiet otherwise).

The fares totalled about £150. So Uber probably got £30 but subsidised the
driver by £525. Pretty crazy if you times this by all the 'newer' markets uber
is in.

------
ziszis
Just the way companies incur technical debt, there is also ethical debt. It is
accumulated by taking ethical shortcuts and avoiding painful decisions (a case
I have seen several times is letting star devs/sales misbehave).

Eventually the payment on the ethical debt comes due. In Uber's case, they
have been building it up for a long time without any down payment. A hard
cleaning is needed from top to bottom.

------
forgottenpass
[replying to a deleted post]

I also found the SVN allegation to be circumstantial at best in the coverage
that didn't focus on any other points. Installing a tool and downloading gigs
of design data is a nuts-and-bolts operation for many disciplines (even for
those that don't normally use version control but interact with a team that
does).

If Levandowski didn't typically access SVN on a frequent basis, it's still
very circumstantial on it's own. Seeing this all laid out in the context of
the surrounding allegations, it becomes an important and fairly damning point.

~~~
londons_explore
All the technical stuff seems fairly circumstantial.

The USB sd card reader could just be so he could sync his holiday photos.

The downloading of the entire SVN repository could just be so he could grep it
for a file he didn't know the path to, or perhaps to try to compile something
he wasn't sure the dependancies of. Reinstalling to linux could simply be
because the software wouldn't build under windows. (it seems doubtful the self
driving car uses a windows software stack).

------
aresant
\- Google's recently revised goal for their program is to license to existing
manufacturers vs. building a car. (1)

\- It's unlikely that whichever automotive company achieves autonomy first is
going to immediately get into the ride sharing game, except perhaps Tesla but
they don't have enough manufacturing capability (yet, or anytime soon) to be a
global threat to Uber.

\- Uber is never going to be a manufacturer but they have partnered with Volvo
and Daimler (2) recently who seem very amenable to licensing / leveraging
third party tech to continue to be competitive in selling automobiles.

\- Why does Uber need to build autonomous tech vs license it? Are they
concerned that the Google / Ford partnership is going to leave them out /
decimated?

(1)
[http://www.techtimes.com/articles/188654/20161213/alphabet-l...](http://www.techtimes.com/articles/188654/20161213/alphabet-
lowers-goals-for-google-self-driving-car-project-plan-for-no-steering-wheels-
and-pedals-in-vehicles-put-on-hold.htm)

(2) [http://www.theverge.com/2017/1/31/14453704/uber-daimler-
part...](http://www.theverge.com/2017/1/31/14453704/uber-daimler-partnership-
self-driving-cars-mercedes-benz-volvo)

~~~
Eridrus
> \- It's unlikely that whichever automotive company achieves autonomy first
> is going to immediately get into the ride sharing game

I think GM shows clear signs of interest of being in the ride sharing game if
they have an advantage there.

Would you rather be the first self-driving ride sharing company, and use that
to displace Uber in high margin areas, or would you rather try to make a
little bit of money off the premium segment buying these cars and then be a
fast follower?

The main argument for being a fast follower would be to let someone else deal
with regulation for you, but otherwise being able to undercut everyone in rich
markets seems like a no brainer that would bring a tonne of revenue and
experience to the project very quickly.

~~~
csours
The buzzword is "mobility", and yes GM is already in the game, through pilot
programs (Maven), Lyft and Cruise Automation.

Disclaimer - I work for GM, but not on any of these things.

------
aarontyree
The internet is being absorbed by greed and hunger for power. I hope that
somewhere in northern Finland, there is an awkward teenager writing something
that will later be known as, "The Great Decentralizer"

------
andrewrice
What is the possibility of criminal charges being brought forth if it's
determined that Kalanick actively conspired with Lewandowski?

~~~
gtirloni
Seems likely.

[https://www.fbi.gov/news/stories/man-sentenced-for-
distribut...](https://www.fbi.gov/news/stories/man-sentenced-for-distributing-
avionics-trade-secrets)

------
orbitingpluto
Hey, it's all part of the "sharing economy".

Driver satisfaction will improve once it's composed entirely of autonomous
vehicles.

As for the real drivers, who are paid less than taxi drivers, I'm wondering
how that put them into the red when they pay less than taxi companies and
skirt regulations. They must have interesting books.

------
acchow
> "Uber gets dealt an injunction on their self-driving car project. They have
> to start again, a long way behind other companies."

How is this actually implemented? How do you prevent a new project starting
from scratch with the same employees from ending up with the exact same tech
as before?

~~~
jimmywanger
Pretty much the same way you could do it with any other
manufacturing/industrial process.

Imagine re-creating a fairly large complex project without access to any
source control, build systems, or bug reports. It'd be easier than starting
from scratch, but not much - especially for hardware, all the tradeoffs and
manufacturing tricks you had to investigate and implement your devices would
have to be recreated.

Your end result would probably look similar, but the way you get there would
be different. Just like the wings on an insect are different from the wings of
a bird.

------
peterjlee
Off topic but I'm going to assume anyone who misspelled Levandowski as
Lewandowski is a soccer fan.

------
sevensor
So at this point, Uber's name is mud, and they're getting tons of bad press.
Does there exist a contrary interpretation of recent events in which Uber is
still somehow OK as an employer or a business? In my news bubble, I haven't
seen any.

------
nvr219
Does this have the potential to kill Uber?

~~~
nilved
Uber is too big to fail really

~~~
acchow
This usually means the government will bail you out if you do fail...

Can you define your usage here?

~~~
psbp
They probably mean network effects. Facebook is the prime example. For Uber, a
critical mass in users and drivers makes it hard to unseat.

~~~
hangonhn
There is no network effect here. Each additional driver does not increase the
value of the network to the other drivers and similarly for passengers. Uber
and Lyft are old-fashioned market makers. They increased the pool of suppliers
and consumers and connected the groups. In cities where both Uber and Lyft
exist, substituting Uber for Lyft and vice versa does not change the value the
driver or passenger derives from either service.

~~~
stale2002
Yes, that is called a two-sided market/network effect.

Each driver increases value for riders, and each rider increases value for
drivers. This two sides.

A 1 sided network is facebook. A two sided market is like the video game
industry (more video games are good for gamers and more gamers are good for
video game devs)

For taxi apps, imagine if there was only 1 driver in SF. That wouldn't be a
good experience for consumers. Thus, network effect.

~~~
acchow
> A 1 sided network is facebook.

Almost every user in Facebook is both a provider and consumer of content. It's
like an exponentially-sided network.

In Uber, drivers provide supply to riders. Riders provide demand for drivers.

~~~
stale2002
Yes, they are both a provider and a consumer.

That is the definition of a 1 sided market.

Sorry, I am using economics jargon.

[https://en.wikipedia.org/wiki/Two-
sided_market](https://en.wikipedia.org/wiki/Two-sided_market)

------
friendzis
Strangely I do not see this said in discussions about Uber, but I think they
are operating in a way on good publicity and the false premise of Uber being
ride-sharing, which is not really the case.

Compared to other services in this market, e.g. taxis or buses, Uber has a
significant portion operation costs implicitly discounted and/or indirectly
subsidised. Uber drivers are self-employed, which in many parts of the world
has lower tax rate as opposed to employment contracts (which is pretty common
for bus drivers). Uber cars are registered as non-commercial vehicles with
less restrictions inherently increasing utility value (a family can have one
car used for Uber and weekend driving, but having a Taxi car may very likely
result in the need for another car) and non-commercial insurance rate despite
increased accident risk, which results in elevated overall risk of non-
commercial vehicles which all (non Uber) drivers must share.

Bad press for Uber may result in law changes that level the playing field and
either increase operation costs for Uber significantly increasing their burn
rate or lower operation costs for their competitors decreasing Uber's
attractiveness and revenue thus increasing burn rate.

------
Havoc
>Uber passengers only pay 41% of the cost of trips, with investor capital
making up the difference.

Holy hell. That's not exactly a sound business model.

~~~
vkou
It's 41% of the driver's cut of the ride (So closer to 12% of the trip cost).

~~~
harryh
That is also not correct. Uber's cut of the ride (which is a bit under 20% of
the fare) is covering 41% of their total corporate expenses (which are not the
costs of delivering rides).

~~~
vkou
So, they are losing 12%/ride, but some of these costs will scale with the
number of rides, and some will not.

~~~
harryh
That is also not correct. TBH I have no idea where you are even getting that
12% number.

------
hossbeast
The most horrifying aspect of this story is people using SVN in 2016.

~~~
emcq
SVN is popular for hardware groups. Why? Better sparse checkout than git when
you are dealing with large binary design files. It's not what git is optimized
for.

------
coleca
What happened with Uber's Pittsburgh research facility? I thought that was the
hub for their self-driving car program?

[http://fortune.com/2016/03/21/uber-carnegie-mellon-
partnersh...](http://fortune.com/2016/03/21/uber-carnegie-mellon-partnership/)

~~~
cdolan
It's still chugging along. Volvos and Ford Focus with LiDAR scoot around town
daily. The ATC (advanced technology center) is fully staffed and operational.
Pittsburgh also recently got some sort of certification/designation as a sort
of "robotic testing ground" for autonomous driving, I think by the US
government?

------
jgalt212
Was the Otto sale the quickest $680MM ever made? Has anyone gone from zero
that amount (exit price, mind you) in that short a period of time?

For those reasons alone, I think there is definitely something fishy going on.
Perhaps not as fishy as Daniel claims, but something just does not smell right
here.

------
olegious
"the information" had a great article on Uber's finances recently. One of the
stats cited was from an internal Uber study that said moving to a fleet of
self driving cars would only achieve a 5-10% profit margin for the company.

------
pyb
Hmm, he got the name of one of the main protagonists wrong. Pierre Yves =>
Pierre-Yves Droz.

You need to demonstrate some attention to detail, if you're going to claim an
ability to 'read between the lines' in this dossier.

~~~
dantiberian
Thanks, I've fixed this.

------
Apocryphon
Would an implosion of Uber be the first step of the end of this tech bubble?

~~~
muninn_
No. It would definitely lead to a torrent of click-bait headlines though. So
we have that to look forward to....

------
quickConclusion
If all of this is true, the logical end to me, not suggested by the author, is
that Google buys Uber. For less money than anyone could. Travis is out.

Makes industrial sense for Google to be in that business too.

~~~
eridius
Why? Uber's technology is literally stolen from Google. What would Google gain
by buying them?

~~~
andrewflnr
The userbase and momentum.

------
ryandrake
> By the time Otto was acquired, they had 91 employees. This seems like a lot
> of salary commitment to take on via self-funding by Otto’s four co-founders
> (all ex-Google).

Were these founders previously Google executives or "9th engineer from the
left" individual contributors? If you were getting exec pay, it might be semi-
believable that you could come out of it and be able to self-fund salaries for
91 employees, but if the latter, I can't see how. Sure, Google pays engineers
a lot but come on...

~~~
ghughes
According to Bloomberg, veteran Waymo employees were paid "F-you money".
[https://www.bloomberg.com/news/articles/2017-02-13/one-
reaso...](https://www.bloomberg.com/news/articles/2017-02-13/one-reason-
staffers-quit-google-s-car-project-the-company-paid-them-so-much)

~~~
ryandrake
Thanks for the link. And they self-funded a startup, wow. Waymo money than
I'll ever see...

------
spikels
I just hope this doesn't somehow delay the deployment of much safer driving
technology. The death, injury and property damage statistic are staggering:

    
    
      Global Annual Estimates:
      Deaths: 1.25 million
      Injuries: 20-50 million
      Cost: $580 billion
    

[https://www.cdc.gov/features/globalroadsafety/](https://www.cdc.gov/features/globalroadsafety/)

------
dustinmoris
When it comes to the self driving car business I really hope Alphabet kicks
Uber's ass, because as a consumer I must trust the car to do the best in my
interest and safety and I don't trust Uber for a second. This company would do
every dodgy thing to become quickly profitable. I rather trust Alphabet or
Tesla.

------
gesman
More interesting version:

Google will let Levandowdki off the hook for testifying against Uber.

Mission accomplished.

------
Aissen
Just a thought… Isn't it one of those things where Google has access to so
much data, they could acquire (illegally) some of it from their servers, and
then use parallel construction for finding other evidence ?

------
achikin
Where is my confidential and proprietary information, Levandowski? Where is
it?

------
hossbeast
Does Levandowski go to prison if this all bears out in court?

------
stefek99
That is gross.

Uber - all the recent examples - it must be truly exceptional environment.

Stellar growth, massive burn rate... I would imagine they are profitable,
cashing 25% of the total fee?

------
tylercubell
This looks like a bunch of circumstantial evidence. The two LiDAR boards need
to be compared to prove that Otto stole Waymo's IP.

~~~
cdolan
Did you miss the part where the schematic was shared from a 3rd party vendor?
Seems like all the comparison you'd need to file a lawsuit

~~~
londons_explore
The boards are presented side by side in the documents, but redacted.

I assume they must look similar enough to a non-technical judge for them to be
presented in that form, or they would be presented with an expert analysis of
the similarities.

My guess is they are identical except the logos. The dimensions of the
redaction boxes is very similar.

------
vfclists
Does Daniel Compton live in the Far East, like Japan, New Zealand or
something?

The date of the blog post is March 14th. Is his calendar a day ahead?

~~~
dantiberian
New Zealand.

------
cft
Sounds terrible but probably Uber will pay $200mm confidential settlement and
have the know how. Sounds like a win for Uber...

~~~
fullshark
Google doesn't want or need only $200 million dollars.

------
drdre2001
Why didn't Uber hire Levandowski, instead of having him build a startup they
could buy for hundreds of millions?

~~~
elsewhen
hiring a guy for tens or hundreds of millions of dollars might look strange to
future investors, but buying a company for that much is commonplace.
alternatively, they could have done it in the attempt to limit any potential
liability (like this waymo lawsuit) to otto without risking the mothership
(uber).

------
arzt
If this goes to a jury, could the damages shut uber down?

~~~
tyingq
Hard to say. If I were Uber, and we seemed likely to lose, I would try to
convey the following...

The only thing truly gained by stealing Waymos's LiDAR designs was a temporary
period of lower cost , but high quality, LiDAR unit. Effectively, a short term
discount. You can buy high quality today...It's just expensive. More
affordable LiDAR is coming, for everyone, regardless of what Waymo does. They
are not the only entity using innovation to drive the cost down.

I would try to have the punishment match that gain, versus something more
catastrophic.

Of course, IANAL, and have been mystified by judgements in the past. Some were
immensely lower, some higher than what seemed to make sense.

Also, who knows what else was stolen? The LiDAR stuff might just be the one
Waymo could most easily demonstrate before filing suit...perhaps there's more.

~~~
londons_explore
One might imagine them saying:

This LIDAR costs $10k. Other LIDAR costs $100k. At the time of this lawsuit,
we had 25 test cars on the road. Therefore triple damages are $90k * 25 * 3,
so we'll pay you $7 million.

------
nuggien
if it plays out that Lewandowski did intentionally steal trade secrets, the
way he went about it was pretty boneheaded.

------
tmsldd
Fumus boni iuris

------
eternalban
The bombshell is that Google uses SVN.

------
beering
TL;DR: The "Bombshell" is Alphabet/Waymo's lawsuit against Lewandowski and
Uber for stealing trade secrets, and an interpretation that Lewandowski formed
Otto basically as a cover to get a big payday from Uber in exchange for the
secrets.

~~~
dantiberian
The bombshell part specifically would be Levandowski arranging with Uber to
steal Waymo tech, form Otto, and Uber would acquire Otto. In all of the
reporting I read about this after the first filing, this was missed.

~~~
thrill
Yes, I think this could be a very big deal.

As someone who several years ago "managed" to take over a publicly traded
company (via a federal judge's order once certain evidence was presented) and
gather and present evidence of massive fraud, etc., and working entirely as an
amateur in this effort, managed to aid in recovering assets and capturing the
former CEO and sending him to prison for several years, I find stories of
(allegedly) fraudulent action (and solid response) like this heartwarming.

If Uber had no self-driving car program to speak of before talking with
Levandowski, and discovery shows they basically started from that
conversation, then that would seem to open up all of Uber to any discovery
process - they can't justifiably claim "it's the self driving car division
that did all this". This seems much more than a civil process from my reading
of it. It could be great theater.

If I was on Uber's BOD, I'd immediately relieve the CEO simply based on the
allegations here, and if I didn't have the votes to do that, I'd immediately
resign my seat.

~~~
ptero
Removing a CEO based simply on allegations sounds to me as a pretty extreme
response.

Would you feel the same if the company in question would not be Uber (whose
CEO may be a liability for Uber ATM anyway) but, say, IBM? This is an honest
question.

~~~
st3v3r
To be honest, given the history of Uber's CEO, I think he's no longer afforded
the benefit of the doubt. The onus would be on him to prove to the board that
these accusations are not true.

~~~
sauronlord
What crimes or violations was he convicted of?

Enough accusations and then you are guilty until proven innocent?

Wtf

~~~
bigiain
Having not been convicted of a crime (with the assistance of one of the
world's largest legal budgets) is not the usual measure of being the sort of
respected and trusted person you'd want at the helm of your corporation.

The man is unquestionably toxic - it's entirely possible the entire company is
toxic.

~~~
sauronlord
Innocent until proven guilty as a legal prescription has nothing to do with
respect and trust and some peoples (filtered) opinions.

~~~
bigiain
Exactly.

Board members and shareholders aren't responsible or particularly concerned
with innocence or guilt, but are very concerned with trust and respect that
customers (or potential-investors/business-partners/governments) have in their
company's leadership.

They're not deciding whether to put him in jail or not, but board members are
legally obligated to determine whether or not he's adding or detracting from
shareholder value.

Even if every single accusation against him and the culture he's built is
false - the public perception needs addressing. Perhaps "remove" is the wrong
wording, but if you're an insider/board member who thinks every single
accusation and report is false - you'd at least have to seriously consider
asking Travis to publicly "recuse" himself while the investigations are under
way - without that anything coming out of the investigation is going to be
about as believable as the Police Union guy announcing "We've investigated the
matter and cleared ourselves of any wrongdoing!".

------
multinglets
The notion that these companies are meaningfully suing each other over "trade
secrets" as opposed to "government help" is rather laughable to me. Fuck
Google and their attempted U.S.-sanctioned digital monopoly on Earth.

------
pfarnsworth
Another big bombshell is that apparently Google laptops store every single
thing you do on it, including whether you attach a USB drive, etc. That's
pretty scary if you're an employee.

~~~
apetresc
Everyone at Google knows about that. There's nothing scary about it, it's a
work laptop.

------
randyrand
I still love Uber and will continue to use them. They provide a great service:
point A to B at a good price and no hassles. That's why I use them.

I don't care at all about the rest of the drama. It's hard to even keep up
with it. I suspect most people are the same.

~~~
c_r_w
It is easy to love a company that is tossing free money at you to use their
service. It will be harder to love them if/when they are a de facto monopoly
on public transportation and are limiting service and raising fees to recoup
their years of investor subsidies.

Enjoy your cheap rides!

~~~
randyrand
thanks!

------
transfire
Entitled "The Witch Hunt Continues" or "Why Americans can't have Nice things".

------
transfire
> _August 2016 - Levandowski received his final multi-million dollar payment
> from Google (presumably a bonus?)_

That's a pretty fat check for someone who just ran away with the crown jewels.
How do we know Google didn't have Lavandowski do all this on purpose to lure
Uber into a compromised position by buying Otto? Unless the courts are rigged,
doesn't Google have to prove Uber acquired Otto with full knowledge that they
were buying stolen property?

------
temp246810
Not related - but I do find it ironic that google is up in arms about stolen
tech given Steve Jobs' vendetta against google over stolen smart phone ideas.
And yes I realize that the gravity of the situation here is different but it's
still an amusing thought - not sure why everyone is so offended by this
comment.

Regarding the lawsuit - I've learned that we have no clue what is going on
behind the scenes, so why stress over it. For all I know this is a power play
by google or some evil scheme by Uber. Let's just wait and see how it plays
out.

~~~
sfeng
Given the context provided in this post, it seems pretty blatant and obvious.
Stealing a design is one thing, stealing the circuit board design from an
unreleased product is espionage.

~~~
erikpukinskis
Out of curiosity, what is it about a user interface and a circuit board that
makes you consider the design of one to be protected but not the other?

