Uber and Waymo have reached a $245 million settlement in their massive legal fight over self-driving-car technology

Former Uber CEO Travis Kalanick leaves the Philip Burton Federal Building after testifying on day two of the trial between Waymo and Uber Technologies on February 6, 2018 in San Francisco, California.Elijah Nouvelage/Getty Images

• Uber and Google have settled a high-profile legal battle over self-driving car trade secrets. 
• As part of the settlement, Waymo will receive $245 million of equity in Uber. 
• The settlement comes days before Alphabet CEO Larry Page was scheduled to testify in open court.

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SAN FRANCISCO — Uber and Waymo have settled their high-stakes legal battle over self-driving car technology — with Uber agreeing to pay Waymo $245 million in equity.

On Friday morning, as the first week of testimony in the explosive trial was drawing to a close, the two companies announced a settlement over the allegations that Uber had misappropriated trade secrets of Waymo, a self-driving car unit owned by Google’s parent company Alphabet.

Uber will pay Waymo a package that includes 0.34% of Uber equity, according to a person familiar with the settlement. That equals about $245 million at Uber’s current private valuation of $72 billion.

Uber's CEO Dara Khosrowshahi "expressed regret for the actions" that led to the lawsuit in a statement posted online. "We agree that Uber’s acquisition of Otto could and should have been handled differently," he wrote.

Khosrowshahi also said Uber was committed to ensure that self-driving car hardware it develops "represents just our good work," and does not include any intellectual property from Waymo. 

The closely-watched trial started earlier this week, and had already seen former Uber CEO Travis Kalanick testify.

At issue in the case was Uber's 2016 purchase of Otto, a company founded by Anthony Levandowski, a former senior Google engineering manager and a world-class expert in self-driving cars. Waymo alleged that he had taken gigabytes of files from Google when he left the company, including schematics and designs for self-driving car hardware, that Uber intended to use in its own self-driving car program. 

The dispute has produced explosive headlines over the past year about the accusations against Uber and has sparked debate about the appropriateness of the “move fast and break things” Silicon Valley ethos epitomized (though not coined) by the ride-hailing firm.

One of Waymo's self-driving Chrysler Pacifica minivans navigates autonomously around its testing facility at the decommissioned Castle Air Force base in Merced County, California, on Monday, October 30, 2017.Waymo

The trial so far: 'Greed is good'

The Hollywood-perfect storyline pitted two tech behemoths against each other and the drama and revelations leading up to the trial have created such a stir that William Alsup, the federal judge in San Francisco overseeing the case, had to reiterate that this was still, at its heart, a dispute over intellectual property.

"The central issues in this case remains whether or not Uber misappropriated Uber’s trade secrets, not whether Uber is an evil corporation," he said in one pre-trial hearing. 

The trial itself veered from the serious to the surreal, with a key moment coming when ousted CEO Kalanick took the stand to testify. Journalists lined up for hours in advance to hear him speak, and he was pressed on his confidential communications with Levandowski, from cryptic messages telling the then-Google employee to “burn the village” to a clip of the legendary “greed is good” speech from 1987 film “Wall Street” — which was played to the jury and the public in the surreal high-water-mark of the trial.

The two sides each had 16 hours to present their case, starting with the plaintiff, and the settlement comes as Waymo was drawing towards the end of its argument. Its curtailment means the court will no longer hear from several expected high-profile witnesses, including Google cofounder Larry Page and Anthony Levandowski, who was expected to invoke his Fifth Amendment right against self-incrimination rather than testify.

Travis Kalanick and Anthony Levandowski.Associated Press

Here are the announcements from Uber and Waymo: 

The full blog post from Uber CEO Khosrowshahi:

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. In doing so, I want to express regret for the actions that have caused me to write this letter.

To our friends at Alphabet: we are partners, you are an important investor in Uber, and we share a deep belief in the power of technology to change people’s lives for the better. Of course, we are also competitors. And while we won’t agree on everything going forward, we agree that Uber’s acquisition of Otto could and should have been handled differently.

To our employees, in particular the great and talented people of Uber’s Advanced Technologies Group: I am inspired by your passion and commitment to bringing self-driving vehicles to life. Over the last year, you’ve been distracted from your mission. For that I am sorry.

There is no question that self-driving technology is crucial to the future of transportation—a future in which Uber intends to play an important role. Through that lens, the acquisition of Otto made good business sense.

But the prospect that a couple of Waymo employees may have inappropriately solicited others to join Otto, and that they may have potentially left with Google files in their possession, in retrospect, raised some hard questions.

To be clear, while we do not believe that any trade secrets made their way from Waymo to Uber, nor do we believe that Uber has used any of Waymo’s proprietary information in its self-driving technology, we are taking steps with Waymo to ensure our Lidar and software represents just our good work.

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. I’ve told Alphabet that the incredible people at Uber ATG are focused on ensuring that our development represents the very best of Uber’s innovation and experience in self-driving technology.

As we change the way we operate and put integrity at the core of every decision we make, we look forward to the great race to build the future. We believe that race should be fair—and one whose ultimate winners are people, cities and our environment.

Dara

Here's Waymo on the settlement, provided by a spokesperson:

“We have reached an agreement with Uber that we believe will protect Waymo’s intellectual property now and into the future. We are committed to working with Uber to make sure that each company develops its own technology. This includes an agreement to ensure that any Waymo confidential information is not being incorporated in Uber Advanced Technologies Group hardware and software. We have always believed competition should be fueled by innovation in the labs and on the roads and we look forward to bringing fully self-driving cars to the world.”

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