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Confident of victory, Google sought $1 billion settlement from Uber

Confident that it would prevail in trade secret litigation alleging that Uber stole Google information, Google proposed that Uber pay $1 billion of damages, issue a public apology, and appoint an independent monitor to assure that Uber does not use Google technology in the future.

Reuters interpreted Google’s proposal: “Waymo’s tough negotiating stance, which has not been previously reported, reflects the company’s confidence in its legal position after months of pretrial victories in a case which may help to determine who emerges in the forefront of the fast-growing field of self-driving cars. The aggressive settlement demands also suggest that Waymo is not in a hurry to resolve the lawsuit, in part because of its value as a distraction for Uber leadership.”

Uber rejected the proposal.

Waymo v. Uber litigation docket

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London Employment Tribunal determined that Uber drivers are employees

In response to a complaint from trade union GMB, the London Employment Tribunal determined that Uber drivers are employees.

Remarking “the lady doth protest too much, methinks” at Uber’s numerous contractual provisions insisting that drivers are not employees, the LET simultaneously looked at Uber’s various “unguarded moments” in which the company used terminology most consistent with employment status. Ultimately the LET said it is “unreal” to deny the “practical reality” that Uber provides transportation services, and in that context the LET found that the drivers must be employees.

The LET rejected as “ridiculous” the suggestion that Uber is “a mosaic of 30,000 small businesses linked by a common ‘platform.'” The LET rejected Uber’s claim of only providing driver with “leads.” For one, drivers have no opportunity to negotiate or bargain with passengers. The LET also examined the interaction between drivers and passengers, including when drivers learn the route and how payment occurs. The LET said all these factors indicate an employment relationship.

In a 13-item list, LET gathered factors indicating that drivers are employees, including those detailed above as well as Uber’s practice of interviewing and recruiting drivers, instructing drivers in various respects, setting routes, collecting ratings and imposing penalties, handling complaints, and having the power to amend the contract provisions of the relationship.

Informed by the finding that drivers are employees, the LET went on to analyze their rights as employees and Uber’s violations of those rights.

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Due diligence report on Otto and Anthony Levandowski revealed copying of Google information

Forensics firm Stroz Friedberg investigated the information Anthony Levandowski allegedly took from Google and whether or how it was destroyed. Stroz’s report conveys Levandowski’s admission that he had five discs of Google information which he says he destroyed (a claim Stroz was unable to verify).

Stroz found about 50,000 Google work emails on Levandowski’s personal computer, and there was evidence that he accessed some of the emails at about the same time he left Google, making it “difficult to believe” that he could not remember having those emails, as he claimed when interviewed.

Stroz found that Levandowski accessed certain Google files after his departure, then deleted them. Stroz also found evidence of Levandowski searching for instructions on secure file deletions, and telling coworkers to delete messages from him. These deletions are consistent with an attempt to destroy confidential Google information that Levandowski should not have had, but also consistent with a cover-up of information previously received and used.

A Google spokesperson said in a statement: “The Stroz Report unequivocally shows that, before it acquired his company, Uber knew Anthony Levandowski had a massive trove of confidential Waymo source code, design files, technical plans and other materials after leaving Google; that he stole information deliberately, and repeatedly accessed it after leaving Waymo; and that he tried to destroy the evidence of what he had done. In addition, Mr. Levandowski used his smartphone to take thousands of covert photographs of computer screens displaying Google confidential files. Knowing all of this, Uber paid $680 million for Mr. Levandowski’s company, protected him from legal action, and installed him as the head of their self-driving vehicle program.”

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Uber Executive invoked Fifth Amendment; company fired him

Accused of stealing driverless car technology from Google (his former employer), Uber executive Anthony Levandowski invoked the Fifth Amendment and refused to testify.

In response to Levandowski’s refusal to cooperate in Uber’s response to Google (Waymo) litigation alleging that Uber stole Google/Waymo secrets, Uber fired Levandowski.

In a letter to Levandowski, Uber terminated him for cause. Uber noted its requirement that he cooperate with the litigation, which he did not do. Uber also noted that his employment agreement warranted that he had returned or destroyed all property and confidential information from any prior employer, but said that Levandowski’s actions gave Uber grounds to allege breach of these commitments.

See also Uber’s May 15, 2017 letter to Levandowski demanding that he comply with a court order, waive his Fifth Amendment protections, and cooperate with Uber’s defense of Google’s lawsuit. See also Levandowski’s May 18, 2017 motion asking the court to modify its order to avoid compelling Levandowski to waive his Fifth Amendment rights.

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Specal iPhone permission let Uber app see iPhone screen even when app not running

Security researcher Will Strafach found Uber’s app enjoying an unusual Apple iOS security permission not used by any other app. Called com.apple.private.allow-explicit-graphics-priority, this permission allowed Uber’s app to see what was on the user’s screen even if the Uber app was not active.

An Uber spokesperson explained the purpose of this security permission: “It was used for an old version of the Apple Watch app, specifically to run the heavy lifting of rendering maps on your phone & then send the rendering to the Watch app.” The spokesperson continued: “Apple gave us this permission years because Apple Watch couldn’t handle our maps rendering.”

Uber indicated that it used the entitlement only in version 8.2 of its app, and that a subsequent update from Apple fixed the memory issue for Apple Watch and made this workaround unnecessary.

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London Employment Tribunal determined that Uber unlawfully denied basic workers’ rights

Having determined that Uber drivers are employees, the London Employment Tribunal further determined that Uber unlawfully denied drivers certain basic rights guaranteed to all employees.

Among other rights, GMB alleged that Uber drivers were entitled to holiday pay, a guaranteed minimum wage, and breaks.

GMB specifically challenged the amount that drivers are paid. After deducting costs and fees, GMB found that members could make as little as 5 GBP per hour, well below the national minimum wage of 7.20 GBP. They also challenged Uber’s practice of deducting sums from drivers’ pay including in response to customer complaints.

LET also found that, contrary to Uber’s insistence that Netherlands law governs the relationship between Uber and its London drivers, in fact British law governs because the relationship “relevant to the situation” was the UK.

Uber appealed the decision. A judgment of the appeal is expected in late 2017.

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Fuel Card duplicate charges

Uber provided some drivers with “fuel cards” usable for gasoline, carwashes, and other services, at a discount, with charges deducted from future Uber earnings. Multiple drivers reported duplicate charges. Representative quotes:

“Double charged for gas with Uber card. Same transaction. Exact same time and date stamp. You took double from my earnings…The rep last night said they have had multiple calls for this same issue. That it would be cleared up by midnight. Today it’s still not fixed and the rep said he couldn’t do anything about it! Uber this is unacceptable” (September 6, Facebook, Florida driver).

“Gas card is very funny…Something is fishy about how this card works. Once I was triple charged and no one caught on until I bought it to Uber attention and the fixed it. I no longer want to use card” (September 2017, YouTube, Curtis J.).

“I was looking over my transaction history and there is two gas card purchases. Same amounts/ days. I was charged twice for 1” (June 28, Twitter).

“Hey my uber gas card was charge 3 times at the same time and day, but different days each” (June 28, Twitter, Oregon driver).

“It’s been 4 days since I wrote to customer care to review my fuel card charges, there were duplicate charges on it and I was overcharged, I have sent screenshots of duplicate charges but so far I got only one reply yesterday with copy pasted text that has nothing to do with what I asked for.” (April 4, Facebook, New York driver).

Drivers reported heightened difficulty resolving the problems because Uber told them to contact FleetCor, which operated the fuel card program. FleetCor in turn told them to contact Uber.

Drivers also reported that Uber and FleetCor suggested that the drivers conduct their own investigations into the disputed transactions such as interviewing merchants and requesting refunds from merchants. Most drivers found these approaches untenable, particularly because the fraudulent charges could occur at distant merchants far from where the drivers lived.

A further challenge for drivers is that many did not know how to contact FleetCor. The Uber-provided FleetCor card does not include a customer service phone number. Drivers would need to find the number in the original card materials that provided in an envelope along with the card — easily overlooked or discarded.

An October 5, 2017 report from The Capitol Forum (paid subscription required) analyzed these concerns and tabulated these and numerous additional driver complaints.

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Uber investors challenged board decision

In October 2017, Uber’s board voted to end the benefit that let early employees and investors get 10 votes per share, a benefit which had given those groups disproportionate control. In response, early Uber investors Shervin Pishevar and Steve Russell said they would sue to block the change. Their statement:

Today’s action by the board was the culmination of a blatant bait and switch, essentially robbing loyal employees, including the more than 200 early founding Uber employees and advisors, of their hard earned shareholder rights.

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Former CEO Travis Kalanick unilaterally appointed two board members

Former Uber CEO Travis Kalanick appointed two new members to the Uber board. Kalanick explained in a statement:

“I am appointing these seats now in light of a recent Board proposal to dramatically restructure the Board and significantly alter the company’s voting rights. … It is therefore essential that the full Board be in place for proper deliberation to occur.”

Kalanick was responding to a proposal from Benchmark Capital, a large shareholder in Uber, seeking to eliminate super-voting power of shares held by Kalanick, other early executives, and investors. With two more board members receptive to Kalanick’s perspective, Benchmark’s proposal is correspondingly less likely to proceed. (Forbes called the appointees “presumed allies” to Kalanick.)

An Uber spokesperson indicated that Kalanick’s appointment of two new board members “came as a complete surprise to Uber and its board.” The New York Times reported that new Uber CEO Dara Khosrowshahi called Kalanick’s move “disappointing” in an internal memo to employees. Bloomberg reported that the appointment was contrary to a prior agreement associated with Kalanick’s resignation.

The New York Times called Kalanick’s approach a “power move.” Former Uber adviser David Plouffe indicated that events at Uber were crazy and that the Trump white house “seems sane by comparison.”

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