The Friday conclusion of a long-running lawsuit between Uber and Alphabet’s Waymo autonomous car unit is being described by industry watchers as, if not exactly a victory for Uber, then at least something close to the best possible outcome. More specifically, it looks like another step forward for CEO Dara Khosrowshahi as he attempts to salvage Uber’s battered image and chart a path forward.
The settlement gives Alphabet 0.34% of Uber’s equity, worth around $244.8 million. Uber also agreed to not incorporate any Waymo technology into its future products. That’s a sizable financial hit, but Khosrowshahi said he doesn’t believe Waymo technology had been in use at Uber, so the agreement may not further hamper Uber’s self-driving efforts.
In other ways, the settlement is great for Uber. As Johana Bhuiyan points out at Recode, the discovery process of the suit had already aired damaging dirty laundry about Uber’s behavior under Khosrowshahi’s predecessor as CEO, Uber founder Travis Kalanick. The settlement stopped any further revelations on that front, and didn’t require Uber to make a specific admission of guilt about the theft of trade secrets. And a loss at trial could have led to much tighter restrictions on Uber’s research process.
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Because it involves equity rather than cash, the settlement also, ironically, leaves Alphabet in a position to benefit from Uber’s long-term success. TechCrunch’s Jonathan Shieber argues that the settlement actually opens the door to potential collaboration down the road, and leaves Khrosrowshahi looking both reasonable and savvy.
That’s particularly important as Uber continues forging a path towards an IPO, possibly as soon as early 2019. By appearing, in Shieber’s words, “nothing short of magnanimous,” Khosrowshahi is further drawing a line between himself and Kalanick, who was ousted last June following a string of tactical, legal, and PR disasters.
Many of those setbacks were triggered by Kalanick’s juvenile impulsiveness, which arguably helped the company grow in its early years. But as it seeks sustainability – and maybe even some profits – Khosrowshahi’s steadier hand, willingness to compromise, and recognition of past mistakes is shaping up as a better approach.