September 18, 2019
Does Uber Have Another Communications Crisis on its Hands?
Earlier this month, Uber was forced to confront some grim —and very public — news: the ride-hailing giant had lost $5.24 billion in the last three months, Uber’s largest-ever quarterly loss. Uber shares plunged by 10% in response.
Uber’s underwhelming financial performance has long disappointed investors, and last month the company was forced to announce cuts of 400 jobs from its marketing team in a bid to get costs under control.
This latest loss was largely due to stock-based compensation off the back of a huge charge related to Uber’s Wall Street listing in May and was just more piece of bad press for the car service firm amid years of recurring PR crises. News this week, then, that a star Uber engineer has been charged for theft of trade secrets, is likely nothing short of devastating for Uber’s already overloaded crisis communications team.
Once one of Silicon Valley’s most sought-after engineers and technologists, Anthony Levandowski was a pioneer of self-driving technology. While still a graduate student, he designed a self-driving motorcycle that was entered in the Pentagon’s first-ever autonomous vehicles contest.
Levandowski quickly became a confidant of Google co-founder Larry Page and was key to developing the internet giant’s first autonomous vehicles. Soon thereafter, Uber successfully wooed the engineer to help the firm develop its own self-driving techniques, and venture capitalists were all but writing blank cheques for the University of California graduate.
This week marked Levandowski’s very public fall from grace. Federal prosecutors have charged him with 33 counts of theft and attempted theft of trade secrets from Google. According to the indictment, Levandowski is guilty of downloading more than 14,000 files containing vital information about Google’s autonomous-vehicle research before he left the company in 2016.
Following this, Levandowski transferred the files to his personal laptop before joining Uber later that year when the ride-hailing platform bought his new self-driving trucking start-up, Otto.
“Silicon Valley is not the Wild West,” said John Bennett, the F.B.I. special agent in charge of the San Francisco Division, “The fast-paced and competitive environment does not mean federal laws do not apply.”
Indeed, it is not uncommon for technology companies to sue former employees or their new firms in a fierce bid to guard their intellectual property. But the raising of criminal charges against a senior executive for theft is nothing short of unusual.
“There have always been disputes between companies…they have often defined the Valley,” said Margaret O’Mara, a professor at the University of Washington, “But this is an extreme example.”
For Uber, the decision to work with Levandowski remains a sore spot. “Uber regrets ever bringing Anthony Levandowski on board,” one of Uber’s lawyers said during a separate trial last year, “All Uber has to show for Anthony Levandowski is this lawsuit.”
With the ride-hailing company already fighting a series of crisis communications’ fires, this week’s ruling is sure to put a dampener on the otherwise exciting news of Uber’s expansion into Canada’s Vancouver city.