Waymo’s staggering settlement demand for Uber: $1 billion

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Alphabet’s self-driving car company Waymo wants at least $1 billion—and a public apology—to end its trade secrets lawsuit against Uber, according to a report from Reuters this morning. The report cites sources “familiar with the proposal,” and it doesn’t specify the exact dollar amount or when the proposal was tendered. Waymo (and Google) parent Alphabet also sought independent oversight to be sure that Uber doesn’t use its technology.

Uber rejected the demands, and no further settlement talks are currently scheduled, according to the story.

The lawsuit began in February, when Waymo accused Anthony Levandowski, the chief of Uber’s self-driving car project, of stealing more than 14,000 files shortly before he resigned from Google. Levandowski, who is not a defendant in the case, has pleaded the Fifth Amendment and avoided answering questions about the accusations. Uber denies that any secrets ended up on the company’s servers and says its lidar technology was built independently.

Waymo insists that its trade secrets are in fact being used by Uber. Earlier this week, Waymo filed a motion seeking to force Uber to produce its lidar source code so that Waymo lawyers could scour it and compare it to Waymo’s code. The judge overseeing the case hasn’t ruled on that motion. The case is currently scheduled for trial in December.

Waymo lawyers have stated in court that they intend to seek up to $1.86 billion if a trial takes place. Still, the reported $1 billion settlement demand contrasts with Waymo’s public statements about the case, which have downplayed the money at stake. Waymo has emphasized that it simply wants Uber to stop using its trade secrets. A Waymo attorney made that point again to Reuters, saying that “Waymo had one goal: to stop Uber from using its trade secrets.”

Not letting Uber off the hook for less than $1 billion suggests that Alphabet perceives itself as being in a superior litigation position and wants to take advantage of that to deliver a serious blow to Uber. An extra $1 billion won’t change the fortunes of Alphabet, which holds more than $90 billion in cash and marketable securities. But it’s real money to Uber, and such a massive payout could lengthen the company’s path to profitability.

Unless it finds a way to make money, Uber doesn’t have an endless lifespan. The company raised around $11 billion in venture capital, and in January, Uber said it had $7 billion on hand and could tap into a $2.3 billion credit line. But the company lost a remarkable $2.8 billion last year. If those losses continue, that would give it just a couple years before going broke.

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