Daniel Compton

The personal blog of Daniel Compton - Projects

The Uber Bombshell About to Drop

If you’ve been following tech news over the last few weeks, you have probably seen several stories about Uber, all negative (bar this one about flying cars). I suspect that what is coming next will prove to be a far bigger story than all of the other incidents so far.

N.B. all of this article is sourced from filings and allegations that Alphabet has made, as well as reading between the lines. Uber will probably contest these claims in court.

Update: I’ve published some updates on the lawsuit. You can keep track of all the posts related to the Alphabet lawsuit here.

In the last few weeks Alphabet filed a lawsuit against Uber. Alphabet and Waymo (Alphabet’s self-driving car company) allege that Anthony Levandowski, an ex-Waymo manager, stole confidential and proprietary information from Waymo, then used it in his own self-driving truck startup, Otto. Uber acquired Otto in August 2016, so the suit was filed against Uber, not Otto.

This alone is a fairly explosive claim, but the subtext of Alphabet’s filing is an even bigger bombshell. Reading between the lines, (in my opinion) Alphabet is implying that Mr Levandowski arranged with Uber to:

  1. Steal LiDAR and other self-driving component designs from Waymo
  2. Start Otto as a plausible corporate vehicle for developing the self-driving technology
  3. Acquire Otto for $680 million

Below, I’ll present the timeline of events, my interpretation, and some speculation on a possible (bad) outcome for Uber. The timeline references section numbers from Waymo’s amended filing, so you can read the full context yourself. You can also read the original filing.

Timeline of events

The main timeline of important events is as follows:


From Waymo’s filings, it seems that they have Levandowski dead to rights on stealing their LiDAR designs. That alone should be enough to bring Uber’s self-driving car program to a halt and cause some big problems for Levandowski. California’s Trade Secrets law is weaker than other states, but if successful, Waymo will be able to seek an injunction, damages, and attorney’s fees. Because all law is securities law, the SEC may also be able to bring a case against Uber (similarly to their case against Theranos).

I’m guessing, but I think the reason that Alphabet hasn’t directly accused Uber of conspiring with Levandowski is that they don’t have enough evidence. When they get to discovery, they will be looking for it. You would think that no-one would be dumb enough to send emails like that, but you would be wrong.

Several things suggest Otto’s intent to be acquired by Uber:

There is no smoking gun email (yet), but there is a strong implication that Uber and Otto planned this from the start.

(Possible) Consequences

If this is true and can be proved in court, then it would be a massive blow to Uber. The worst case for Uber would be:

This is admittedly the very worst case scenario for Uber, and there are lots of places along this downward trajectory that they could pull up from. If it’s proven that Uber intended to acquire Otto while Levandowski was at Google (this might be established more concretely in discovery), then it’s hard to see how Uber’s CEO Travis Kalanick could keep his job. Uber has had a bad month, and it doesn’t look like things are going to be getting better any time soon.


This post is made up of a mix of filings from Waymo, reading between the lines, and some speculation. Keep in mind these are all allegations and haven’t been proven in court. Please let me know if I’ve made any mistakes, and I’ll correct them.

I’d encourage you to go over the filings yourself, as they are very readable, and give a lot more context to the story than I was able to here.


I originally posted that Uber was only charging 41% of the cost of the trips, based on this article which I misread. The 41% number is the total cost of the trip including driver compensation as well as corporate expenses.

Alyssa Vance sent me the calculations you would make to work out the farebox ratio:

Farebox ratio = fares / total cost of operations Total cost of operations = fares - profits Farebox ratio = fares / (fares - profits)

For 1H2015: Farebox ratio = 3,661 / (3,661 - -987) = 3661 / 4648 = 78.8%.