Bloomberg reported this Friday that Uber and Google’s Waymo have finally resolved their differences. Uber Technologies has agreed to pay Waymo $245 million in closely held equities, which will give Google’s Waymo autonomous car unit a 0.34% stake in the ride hailing company.
How much these stocks will be actually worth will depend on how the company fares when it goes public. Uber is looking at launching its IPO in late 2019. However, considering the fact that the ride-hailing startup just closed a deal with SoftBank Group Corporation worth $9.3 billion in which the company’s shares were valuated at $54 billion, it gives a ball park figure for how much Waymo’s shares would be worth. Based on the SoftBank deal, Waymo’s shares will be worth about $184 million.
Google was one of the first investors in Uber, way back when it started, so this settlement will increase the search giant’s stake in the company.
The last one year has been tumultuous for Uber, with the scandal after scandal finally leading to the expulsion of co-founder and CEO Travis Kalanick. The Uber – Waymo lawsuit is one of those scandals the company got embroiled in due to Kalanick’s contentious behavior.
Google and Uber were friendly rivals in the driverless-car industry, which is expected to grow to billions of dollars a year. The problem started when Kalanick, against the advice and pleas of his own team, went ahead with a deal with one of Waymo’s ex-senior engineers – Anthony Levandowski – to acquire autonomous driving technology.
Waymo’s allegation was that this technology had been stolen by Levandowski. The theft consisted of more than 14,000 proprietary files – including the critical lidar tech (which helps these autonomous cars “see” their surroundings) – that Waymo said Levandowski stole when he left the company to launch his own startup – Otto.
Kalanick acquired Otto and Levandowski was offered the role of head of Uber’s self-driving project by Kalanick, but was demoted and then finally fired as the contention between Uber and Google got more and more acrimonious.
As part of the trial proceedings, Kalanick spent more than 3 hours on the witness stand giving his testimony. However, it just became clearer that it would be very difficult for Google to prove its allegations.
According to Fortune, this settlement was negotiated by Kalanick’s successor Dara Khosrowshahi, and, while not exactly a win, is definitely the next best option. This lawsuit had already brought a lot of Uber’s skeletons out of its closet and, had the ride hailing company lost the case, it would have meant heavy restrictions on how it would be allowed to conduct its research into new technologies, not to mention the huge compensation that Waymo was demanding. Waymo was looking for $1.86 billion in damages in this lawsuit as well as a court order that would prohibit Uber from using the disputed technology.
Thanks to the negotiation, Uber now only pays $245 million worth of equities to Google. The settlement also means that Uber no longer as to admit to guilt on any matter.
Since Khosrowshahi took over as CEO of Uber, he has been busy rebuilding the company that Kalanick founded but also almost destroyed. By reaching this settlement with Google, he has actually opened avenues to future collaborations between the two companies. And having Google’s support will only increase Uber’s value when it launches its IPO late next year.
Google released a statement that it was happy with the deal and would partner with Uber so that it could develop its own autonomous technology.