Uber Feared It Fell Behind in Driverless-Car Technology, Kalanick Testifies

02/06/18 06:57 PM EST
By Greg Bensinger 

SAN FRANCISCO -- Former Uber Technologies Inc. chief Travis Kalanick testified Tuesday the ride-hailing company grew concerned in 2015 it was falling behind on developing self-driving vehicles seen as critical to its future, prompting it to go into business with a star Google engineer.

That decision opened up Uber to a blockbuster lawsuit from Alphabet Inc.'s Waymo now under way in federal court over allegedly stolen autonomous-car trade secrets. Waymo executives had grown increasingly concerned about Uber poaching more executives as both technology firms raced to build the first robot car, according to evidence in the case.

Mr. Kalanick's appearance was the highlight on a day of mostly technical evidence and video testimony. The trial began Monday in U.S. District Court for the Northern District of California.

The Uber chief said he began discussing a deal with Anthony Levandowski while the engineer was still working at Waymo and before he created an autonomous-truck company at the center of the suit.

"He was adamant about starting a company and we were very adamant about hiring him," Mr. Kalanick said.

The showdown pits Waymo, an offshoot of Google, against the most highly valued U.S. startup over the future of autonomous vehicles. Both companies are vying for a stake in the auto industry, which claims some $2 trillion in annual revenue, according to Deloitte Consulting.

The outcome could result in Uber being blocked from further developing aspects of its robot cars and having to pay billions of dollars in damages.

Waymo alleges Uber, as part of paying around $680 million to acquire the Levandowski company later known as Otto, obtained and used trade secrets related to technology known as lidar, or light detection and ranging systems, used to guide self-driving vehicles.

Uber conspired with Mr. Levandowski to download and bring it sensitive Google files to get a leg up in developing lidar, Waymo alleges. Uber denies the allegations.

"A great many things have been said about Anthony over the last two days, but we are optimistic that he will eventually be vindicated," a spokesman for Mr. Levandowski said.

Mr. Levandowski previously has indicated he will invoke his Fifth Amendment right against self-incrimination. Mr. Kalanick has denied any theft in depositions.

Waymo attorney Charles Verhoeven showed December 2015 meeting notes from former Uber executive John Bares, then the head of the self-driving program, in which Mr. Kalanick appeared to be singularly focused on lidar, as well as intellectual property. Uber closed its deal for Otto in August 2017.

Mr. Kalanick said he didn't recall saying anything about intellectual property.

"I wanted to hire Anthony and he wanted to start a company," said Mr. Kalanick. "So I tried to come up with a situation where he could feel like he started a company and I could feel like I hired him."

Mr. Bares said the company was burning through about $20 million a month trying to develop reliable autonomous vehicles. Relying on Mr. Levandowski's assistance would help pare the costs by speeding up development, Mr. Bares said in his testimony.

The executive, who left Uber in summer 2017, said he felt pressured to keep up with Mr. Kalanick's goal of getting 100,000 driverless cars on the road by 2020. Autonomous vehicles are essential to Uber's business, Mr. Bares said, given human drivers account for 70% to 80% of the cost of operating a vehicle in ride-hailing.

"The people that can do that are going to win in the business," Mr. Bares said.

It was Mr. Kalanick's testimony, though, that perked up the trial's second day, which was marked mostly by technical testimony from a Google forensics expert who described how he determined Mr. Levandowski had downloaded 14,107 sensitive files before quitting the company.

Mr. Kalanick, who will continue his testimony on Wednesday, appeared calm during rapid-fire questioning by Waymo's lead attorney, offering mostly single-word responses while sipping on small bottles of water.

Still, he acknowledged Google was and remains the leader in self-driving vehicle technology. "That's the general perception right now," he said.

Write to Greg Bensinger at greg.bensinger@wsj.com

 

(END) Dow Jones Newswires

February 06, 2018 18:57 ET (23:57 GMT)

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