The $1.9 billion legal battle between ride-hailing giant Uber and Alphabet’s self-driving unit Waymo reached a pivotal moment today as the judge in the case released a damning letter regarding a former Uber employee whose allegations saying that a special division within the company was responsible for acts of corporate espionage, the theft of trade secrets, the bribery of foreign officials and various means of unlawful surveillance.
The “Jacobs letter” was written by the attorney for Richard Jacobs, who previously worked as Uber’s manager of global intelligence before being fired in April. The highly detailed account brings about accusations of systematic illegal activity inside Uber’s Strategic Services Group (SSG) which allegedly sought to surface other companies’ trade secrets through eavesdropping and data collection. The letter alleges that some of the information gathered was relayed to then-CEO Travis Kalanick.
In a statement to TechCrunch, an Uber spokesperson said, “While we haven’t substantiated all the claims in this letter—and, importantly, any related to Waymo—our new leadership has made clear that going forward we will compete honestly and fairly, on the strength of our ideas and technology.”
The 37-page letter details the actions of the SSG and the Marketplace Analytics (MA) group which it claims “exists expressly for the purpose of acquiring trade secrets, codebase, and competitive
intelligence… from major ride-sharing competitors globally.” The Jacobs letter also alleges that the group used ephemeral encrypted chat apps and “non-attributable” devices to keep evidence of their actions hidden.
The heavily-redacted letter lays out the alleged processes with clear and unrelenting detail.
Uber worked to unlawfully obtain trade secrets from [redacted]. MA I) remotely accessed confidential [redacted] corporate communications and data, 2) impersonated riders and drivers on [redacted] platform to derive key functions of [redacted] rider and driver apps, 3) stole supply data by identifying possible drivers to boost Uber’s market position, and 4) acquired codebase which allowed MA to identify code used by [redacted] to understand in greater detail how [redacted] app functioned.
A report in Gizmodo earlier this week says just as much, highlighting Uber’s systematic data scraping of competitors’ platforms via automated collection systems that were running constantly, amassing millions of records.
While much of the “hacking” or other forms of surveillance seemed to rely on these types of automated systems, the company also allegedly engaged in physical surveillance, including wiretaps, in order to discover competitors’ advantages or weaknesses.
The company “used undercover agents to collect intelligence against the taxi groups and local political figures. The agents took rides in local taxis, loitered around locations where taxi drivers congregated, and leveraged a local network of contacts with connections to police and regulatory authorities,” the letter alleges.
In a November 29 email to employees regarding Jacobs’ accusations of human surveillance, Uber GC Tony West wrote, “there is no place for such practices or that kind of behavior at Uber. We don’t need to be following folks around in order to gain some competitive advantage. We’re better than that. We will compete and we will win because our technology is better, our ideas are better, and our people are better. Period.”
These allegations are sure to complicate Uber’s case in the already-messy trade secrets theft case with Waymo.
In late November, U.S. District Judge William Alsup postponed the trial just a day before jury selection was set to begin after being informed of the existence of the Jacobs letter. Uber’s legal team has referred to the letter as “extortionist” in nature; the company paid a $4.5 million settlement to Jacobs over his claims about the company’s operations. Judge Alsup disagreed with this characterization, harshly criticizing the Uber legal team for not disclosing the letter in the first place.
The trial has been delayed until February 2018 to give the Waymo legal team more time to investigate claims from Jacobs.
In a statement, a Waymo spokesperson told TechCrunch, “Uber improperly withheld the Jacobs Letter, which exposes the extreme lengths it was willing to go both to get a leg up on competition and hide evidence of bad acts. Separate and apart from the letter, Waymo has accumulated significant evidence that Uber is using stolen Waymo trade secrets, including copying aspects of Waymo’s LiDAR designs down to the micron, and we look forward to trial.”
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