The *Waymo v. Uber* Settlement Marks a New Era for Self-Driving Cars: Reality

The sun had only just come up Friday, but the young self-driving car industry had already moved into a new era. From the bench, federal Judge William Alsup, recovering from a sore throat, called it: “This case is now ancient history.”

Waymo v. Uber, the first great legal fight over autonomous vehicles, ended in a peace treaty Friday morning: Uber gave Google’s sister company a 0.34 percent stake in its business (worth $245 million or $163 million, depending on how you count Uber’s worth), and pledged not to use any of Waymo’s software or hardware in its vehicles. “I want to express regret for the actions that have caused me to write this letter,” Uber CEO Dara Khosrowshahi wrote in a statement posted on the ride-hailing company’s website.

Waymo had alleged that when longtime Google engineer Anthony Levandowski resigned to start his own company, he took thousands of vital technical documents with him, including blueprints for the lidar laser sensor he had helped develop. Uber bought Levandowski’s startup a few months later for almost $600 million in equity and put Levandowski in charge of its struggling self-driving R&D effort. In Waymo’s telling, Levandowski and Uber used Waymo trade secrets to accelerate their efforts.

In large part, the lawsuit encapsulated the stakes in the early days of an industry that’s now booming. Back then, a good lidar system was so rare and coveted that it might be worth stealing. A single engineer like Levandowski, who helped found Google’s self-driving car team a decade ago, could merit a palace coup. And just two companies—Google, the progenitor of self-driving tech, and Uber, the virile challenger eager to convert its millions of human-operated cars into much more profitable robots—command nearly all the headlines and attention of anyone eager for a world where human drivers are a lol-worthy memory.

That world looks different now. More than 20 companies are currently developing lidar, making the sensor more necessary commodity than secret sauce. A pedigree like Levandowski’s loses its luster as a new generation of engineers, trained in robotics and machine learning, emerges. At least half a dozen companies not involved in this brouhaha have proven they can make cars drive about without human help. Waymo v. Uber was a fight over a once jealously guarded technology that today verges on commonplace. And now that the suit is settled, everyone can turn to the next chapter in the textbook, the one where all the companies grow up and figure out how to deploy the thing they’ve all created.

“This is evidence that the autonomous driving problem is not going to be solved by a single silver bullet,” says Shahin Farshchi, a partner at the venture capital firm Lux. “It’s a matter of building many things and getting many things to work together.”

As any good historian will tell you, a moment like the Visigoth-induced fall of Rome in 476 or Judge Alsup’s decree that “there’s nothing more for me to do here” doesn’t really trigger an epochal shift. It’s just a convenient marker. The transition from developing self-driving technology to actually deploying it happened independent of this case. Even before Waymo filed its lawsuit, others were turning a horse race into a stampede: General Motors acquired self-driving startup Cruise. The mysterious startup Zoox started testing in San Francisco. Waymo alum Bryan Salesky decamped for Argo AI and partnered with Ford. Former Google self-driving chief Chris Urmson founded Aurora and is now working with Volkswagen, Hyundai, and Chinese automaker Byton.

Of course, the settlement has tangible effects. First, Uber lives. The threat of a billion-dollar penalty or an injunction that could shut down its entire self-driving program has evaporated. As Uber co-founder and former CEO Travis Kalanick testified, the company sees autonomous vehicle tech as vital to its existence. If someone else figures out how to run a taxi service without a driver before Uber does, then Uber loses.

Uber wins that second life pretty cheaply, too. No money changes hands as part of this deal; Waymo receives a mere 0.34 percent stake in the ride-hailing company. Each party in the lawsuit will pay its own lawyers. And with that, Khosrowshahi ticks another box off his lengthy Fix Uber list, which also included a house cleaning after the company revealed it had paid off hackers following a 54-million-account security breach and an apology tour in London for safety infractions.

Waymo, meanwhile, maintains its position at the head of the self-driving pack, and shows competitors it’s willing to bleed a bit to stay there. “It was great from Waymo’s perspective to put everyone on notice: ‘We take our leadership position seriously and we will go hammer and tong after anyone who will upset that,”’ says Reilly Brennan, cofounder of the transportation-focused venture capital firm Trucks.

That goes for its own engineers, too. Pierre-Yves Droz, Waymo’s current lidar technical head, testified Thursday that, OK, yes, he had taken an outdated version of one lidar setup to Burning Man. And yes, he had taken two other versions home (with his bosses’ permission). Uber lawyers seemed prepared to argue that this wanton toting-about of self-driving tech proved that Waymo’s lidar wasn’t a trade secret after all. You have to hide stuff for it to be a secret.

So expect no more lidar shows at Burning Man, and no more carelessly protected servers. It’s time for the self-driving space, Waymo included, to grow up and be diligent about keeping their tech in-house. This is a real industry now. The money is still theoretical, but the autonomous vehicle market could be worth $7 trillion by 2050, according to a 2017 Intel report.

Protecting intellectual property means telling employees what is and what isn’t secret—especially if they’re about to leave. “The critical juncture to reinforce those expectations is in the exit interview,” says John Marsh, a lawyer with the firm Bailey Cavalieri. “The employer says, “Hey, by the way, you signed this agreement about trade secrets when you started here; if you have questions, come see me. I expect you’re going to abide by this.’”

In the abridged trial, an Uber lawyer asked Waymo hardware engineer Sasha Zbrozek whether anyone at Google looked for activity that signaled someone was downloading huge numbers of files.

“No,” Zbrozek responded. “But nobody monitors when you get water from the fridge either.”

The time for such freedom could be ending. As autonomous driving technology approaches reality—the you give someone money to ride in this thing kind of reality—expect better defined policies and lots more rules. And maybe a camera watching the water dispenser, too.

Waymo’ Autonomy

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Paul Rosen