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Uber to pay Waymo $245M in stock to settle self-driving trade secrets clash

| Friday, Feb. 9, 2018, 3:45 p.m.
FILE- This Sept. 12, 2016, file photo, shows group of self driving Uber vehicles position themselves to take journalists on rides during a media preview at Uber's Advanced Technologies Center in Pittsburgh. Uber is settling a lawsuit filed by Google’s autonomous car unit alleging that the ride-hailing service ripped off self-driving car technology. Both sides in the case issued statements confirming the settlement Friday, Feb. 9, 2018, morning in the midst of a federal court trial in the case. (AP Photo/Gene J. Puskar, File)
FILE- This Sept. 12, 2016, file photo, shows group of self driving Uber vehicles position themselves to take journalists on rides during a media preview at Uber's Advanced Technologies Center in Pittsburgh. Uber is settling a lawsuit filed by Google’s autonomous car unit alleging that the ride-hailing service ripped off self-driving car technology. Both sides in the case issued statements confirming the settlement Friday, Feb. 9, 2018, morning in the midst of a federal court trial in the case. (AP Photo/Gene J. Puskar, File)

SAN FRANCISCO — Uber has settled a lawsuit alleging that it ripped off self-driving car technology from Google's autonomous vehicle division.

Under the surprise deal, the ride-hailing service will pay Waymo, which is part of Alphabet Inc., a stock settlement valued by Waymo at $245 million.

Both confirmed the settlement early Friday, four days into a federal court trial in the case. Waymo said it accepted an offer from Uber that included Uber agreeing to ensure Waymo technology isn't used in Uber's autonomous vehicles.

Uber CEO Dara Khosrowshahi said in a printed statement that the company doesn't believe trade secrets made their way from Waymo to Uber. He also says Uber is making sure its self-driving vehicle research represents only Uber's work, though he expressed “regret” for his company's actions.

“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,” Khosrowshahi wrote in the statement.

Uber based its Advanced Technologies Group in Pittsburgh in 2015 to work on self-driving cars. The company now employs about 750 people in the city. Uber operates a fleet of self-driving cars in Pittsburgh. The fleet provides rides to Uber customers in a limited geographic area. Friday's settlement appeared not to affect Uber's operations on the roads in Pittsburgh.

Uber also operates test fleets in San Francisco and Tempe, Arizona.

Waymo charged in its lawsuit that former Uber CEO Travis Kalanick teamed up with ex-Google engineer Anthony Levandowski to steal lidar laser sensor technology, which serves as the eyes of self-driving vehicles.

Waymo alleges that Levandowski heisted eight trade secrets from Google before he departed from the company in January 2016. He founded his own startup, Otto, which Uber bought a few months later for $680 million. Kalanick has acknowledged discussing plans for Otto with Levandowski before he started it, though both he and Uber deny using any Google technology to build a fleet of self-driving cars.

Levandowski apologized to Uber employees for any distraction arising from the clash with Google.

“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,” Khosrowshahi wrote.

Levandowski was at Uber's ATG office in Pittsburgh's Strip District in September 2016 to speak to the media ahead of the company allowing users to hail a self-driving car.

According to Waymo, the settlement will be paid in Uber stock and is equal to 0.34 percent of the company's value, which was $72 billion after its most recent fund-raising effort led by Japanese tech conglomerate Softbank. The value of the settlement could be less, however, because Softbank and Dragoneer Investment Group bought some shares at a discount that valued the company as low as $48 billion.

Stock in the privately held Uber would be transferred immediately to Alphabet, which was an early Uber investor and remains as one of its largest shareholders. Uber has plans to sell stock to the public sometime next year.

In pretrial evidence gathering, a Waymo expert witness valued the alleged theft at nearly $2 billion. The judge in the case didn't allow that figure into the trial.

Kalanick was pressured by investors to step down as CEO last year, partly because of concerns about Waymo's lawsuit.

In a statement Friday, Kalanick said Uber would have won had the trial continued. The company simply wanted to hire talented scientists and engineers to help lead Uber into a future of driverless cars, the statement said. “The evidence at trial overwhelmingly proved that, and had the trial proceeded to its conclusion, it is clear Uber would have prevailed,” the statement said.

Waymo said in a statement that the agreement will protect its intellectual property. “We are committed to working with Uber to make sure that each company develops its own technology,” the statement said.

Tribune-Review reporter Aaron Aupperlee contributed to this report.

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