Two tech heavyweights gathered in a San Francisco courtroom last week for what was supposed to be a truly epic battle. Waymo, the self-driving car project of Google parent company Alphabet, had initially sued Uber over the alleged theft of more than 100 trade secrets. According to Waymo, the deed went down when one of its star engineers, Anthony Levandowski, quit and founded an autonomous truck company called Otto, which was acqui-hired by Uber, which like Alphabet wants to be first to market with a self-driving car. At the time, Uber was steered by Travis Kalanick, who last year was forced to step down from the $70 billion ride-hail startup following a series of embarrassing revelations about his leadership style and the sexist, alienating workplace culture that metastasized during his tenure.
After just four days of fairly juicy testimony, however, the fight between the two companies fizzled. Both sides agreed to a settlement with no clear victors, though Uber will pay Alphabet the equivalent of $245 million in equity. While that may seem like a rather dull end to what was supposed to be the rare public Silicon Valley smackdown, the truth is that had the case played out to the end, neither side would have had much to gain. At least on the surface.
By the time the suit, filed more than a year ago, made it to court, the list of potentially stolen trade secrets had dwindled to eight. Though it’s not clear what those secrets are—that’s the whole point of secrets—we know they have to do with LiDAR, or “Light Detection and Ranging,” which allows self-driving cars to measure the distance between objects and detect them. If Uber had lost, it could have had to pay around $1 billion in damages. Had Uber won, Waymo would have looked petty. While $1 billion isn’t nothing, Uber could easily have afforded the hit. Putting aside the paltry list of thefts, advances in autonomous driving technologies are happening so fast that these trade secrets were probably already outdated or were just about to be. And it’s not like either side is losing business yet: Self-driving cars haven’t hit the road beyond a few highly controlled tests, and right now the money is primarily from capital investment with no return.
So what were these two tech superpowers actually arguing about? And does the settlement actually signal a cessation of hostilities between the two companies? The answer to the second question is definitely no—everyone racing to build a self-driving car assumes it’s a winner-take-all contest. Which is why the answer to the first question is a lot bigger than those eight supposed trade secrets would suggest.
For Uber, which has said it hopes to eventually replace the human drivers on its platform with a fleet of self-driving cars, “losing is not an option,” according to a text message Kalanick, then still Uber’s CEO, sent Levandowski in 2016. (The text messages emerged as evidence during the trial.) “The golden time is over. It is war time,” went another message from Kalanick to Levandowski, who was also drunk on the possibilities of how powerful this new technology could be. That year he texted Kalanick, “I just see this as a race and we need to win, second place is first loser.” So great were the rewards of perfecting self-driving tech, the two believed, that the first to do so stood to potentially remake how humans move around—and of course make gobs of money in the process.
And they weren’t wrong. “This technology will have a massive impact on human existence,” says Karl Brauer, an industry analyst and the executive publisher at Autotrader and Kelly Blue Book. “It will mean pure mobility and freedom when people can go wherever or whenever they want. I don’t think the stakes of the Uber–Waymo case were super high. I think the stakes of the race are super high.” The trial may not have been about much, but it was a proxy skirmish in a war that, to Uber and Alphabet, is about everything.
Think about how Apple’s iPhone changed how we communicate and interface with the world, or Google’s search product changed how we consume information. By perfecting those technologies, Apple and Google sparked whole industries that were once near-impossible to imagine. Telephones once changed the world, and then smartphones changed it again. The internet was revolutionary before it was easily searchable, and Google came in and revolutionized it again. Waymo and Uber are sure that something similar, but different in one crucial way, will happen with the automobile: Unlike phones and search, there’s no room for almost good enough when it comes to cars. If it’s not totally safe, no one is getting in it. And that means that with this race, the first thing a company puts out there that people actually start to use has to be flawless. Sure, there’s always room for improvement, but there’s no room for mistakes.
Right now, it’s extremely unclear who is winning the fight. One of the pieces of evidence that came out in the trial was a 2015 internal presentation from Google’s self-driving car project that showed how it wanted to “consume” all of Uber’s profits, as well as a memo from Chris Urmson, a former Google self-driving car engineer, about how Uber was hiring people he suggested Google hire but didn’t. That evidence and Kalanick’s texts to Levandowski about how “going slower is NOT an option anymore” offer a portrait of two companies that weren’t exactly confident in their standing as leaders of a driverless tomorrow. And since 2015, Waymo has lost a plenty of talent from its self-driving team, including early engineer Chris Urmson, who started his own self-driving car company, Aurora, as well as Levandowski, who left for Uber only to be subsequently fired as the Waymo lawsuit gained heat. There’s also Bryan Salesky, another Google self-driving car engineer, who is now the CEO at Argo, an autonomous vehicle company backed by $1 billion from Ford, and Dave Ferguson, another Waymo engineering alum who is behind the wheel of yet another self-driving transportation startup called Nuro. It’s not a stretch to imagine that Waymo—which got years of adoring press for the self-driving Google cars it had tooling around Northern California—feels it is losing or has even lost its advantage in the self-driving race. Meanwhile, with Uber still cleaning up the mess its former CEO made, the company might not be on top of its game with self-driving technology right now, either.
To really understand why a huge company like Alphabet would want to take on Uber in court, it’s important to consider how messy the birth of autonomous driving tech was. When the U.S. military’s innovation arm, DARPA, held a self-driving car competition more than a decade ago, many of the people who are now set against each other at rival companies were on the same team. “There were lots of overlaps and informal sharing and all kinds of personalities early on,” says Bryant Walker Smith, a law professor at Stanford who specializes in automated driving technology. The Uber–Waymo case can be seen, he says, as “tidying up loose ends dealing with the remnant messiness from the beginning,” said Smith. Still, just because the case is settled doesn’t mean the road that lies ahead for automated driving is any less rocky.
Complicating things further, almost every player in this race has some kind of financial tie to another one. Before the lawsuit Google Ventures, Alphabet’s venture capital arm, had already invested nearly $300 million in Uber. Then there’s GM, which has partnered with Uber but is heavily invested in Uber’s rival Lyft. Alphabet is also deeply invested in Lyft. What’s more, Apple has poured $1 billion into Didi Chuxing, Uber’s rival in China that’s also working on a self-driving car project. Both Uber and Waymo have conceded that they can’t make all the tech that goes into the cars on their own. Waymo uses Chrysler vans and Uber’s self-driving tech is hosted on Volvo SUVs. And if the talent and money continues to swirl like it has been before robot cars are actually ready to hit the road, don’t expect this to be the last legal battle between runners in the self-driving race. “I don’t think people have figured out what form everything will take,” Smith told me. “That explains the willingness to hedge your bets or learn from your partners, and throw lots of stuff at the wall to see what sticks.”
This may seem like nothing but palace intrigue to anyone who doesn’t make a habit or profession out of watching the tech industry. But if the prognosticators are correct, the proliferation of self-driving cars will reshape communities, transportation patterns, and how we spend our time while getting from here to there—if we can still afford to get from here to there. That has consequences for all of us, not just the people who will get even richer through their dominance of the technology. Don’t be surprised if the race to perfect it takes another detour through a courtroom before one of these companies reaches the finish line.