Uber stole trade secrets, bribed foreign officials and spied on rivals, filing says

Document by former Uber security manager details company’s alleged ‘unethical, unlawful’ practices amid legal battle with self-driving car company Waymo

Uber allegedly engaged in a range of “unethical and unlawful intelligence collections”, including the theft of competitive trade secrets, bribery of foreign officials and spying on competitors and politicians, according to an explosive legal document published on Friday.

It’s the latest chapter in the discovery process for the company’s messy legal squabble with Waymo, Google’s driverless car spin-off, which has accused Uber of stealing trade secrets.

The details were outlined in a 37-page demand letter filed by the ex-Uber security manager Richard Jacobs, who left the company earlier this year. The document paints a picture of a team of employees dedicated to spying on rivals and “impeding” legal investigations into the company.

Jacobs alleges that when he raised concerns over the techniques being used, he was given a poor performance review and demoted as “pure retaliation” for refusing to buy into the culture of “achieving business goals through illegal conduct even though equally aggressive legal means were available”.

He had sent the letter to Uber’s in-house counsel with his allegations about possible criminal activity carried out by the special group in May this year, threatening to sue the company. Uber did not provide the letter to Waymo as part of legal discovery before the trial started.

An Uber spokeswoman said in a statement: “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.”

Jacobs worked at the ride-hailing company from March 2016 until April 2017. After his attorney sent the demand letter to Uber outlining potentially criminal activities within Uber’s “strategic services group” and “marketplace analytics” teams, he and Uber reached a $4.5m settlement. This included a non-disparagement clause and a one-year consulting contract to help Uber “root out bad behaviour”, Jacobs said when he testified in federal court last month.

The letter alleges, among other things, that Uber planned to use certain hardware devices and software to conceal the creation and destruction of corporate records so they “would never be subject to legal discovery”. Such records would, the letter states, “implicate ongoing discovery disputes such as those in Uber’s litigation with Waymo”.

The letter also outlines a range of intrusive techniques that Uber allegedly used to extract intelligence from politicians, regulators, competitors, taxi organisations and activists.

Uber’s intelligence team allegedly infiltrated private event spaces at hotel and conference facilities that a group of competing executives used during their stay. Jacobs claimed that Uber recorded and observed private conversations among the executives including their real-time reactions to the news that Uber would receive $3.4bn from the Saudi government.

Live updates, photos and videos were then allegedly transmitted back to the “War Room” at Uber’s headquarters, where the company’s former CEO, Travis Kalanick, along with other members of Uber’s executive team, could observe.

Uber operatives also impersonated taxi drivers, Jacobs said, to infiltrate private Facebook groups and WhatsApp groups of opponents.

Matthew Umhofer, an attorney representing four members of Uber’s security team mentioned in the letter, added: “The competitive information gathering that was done at the explicit request of management was unremarkable and no different than what’s done by law-abiding companies across the country and Uber’s own competitors.”

Umhofer also described the letter as “character assassination for cash” and said that Jacobs “is nothing more than a failed Uber employee who underperformed and got demoted, and then retaliated against his supervisors”.

During his testimony last month, Jacobs repudiated some of the allegations made in his demand letter, saying that he had only reviewed it for 20 minutes before his lawyer had sent it. Among those was the allegation that “Uber used the marketplace analytics team to steal trade secrets at least from Waymo in the United States”. Jacobs said that the team primarily worked overseas, but in the US had researched “protest and threat groups targeting Uber”.

Waymo sued Uber in February, alleging that the ride-hail company’s acquisition of the self-driving startup Otto, founded by the former Waymo employee Anthony Levandowski, was actually a scheme to acquire secrets stolen from Waymo.

The federal judge William Alsup, who is overseeing the trade secrets case, was only alerted to the existence of the explosive demand letter by federal prosecutors on 22 November in a separate letter in which they confirmed that there was an open criminal investigation into Uber. “You should have come clean with this long ago,” he subsequently told Uber’s lawyers in court.

Because such a key piece of evidence had been withheld, Alsup delayed the start of the trial.

“If even half of what’s in that letter is true, it would be a huge injustice to force Waymo to go to trial” as scheduled, he said.

At the time, a spokeswoman for Waymo called the new evidence “significant and troubling” and welcomed the trial delay as an “opportunity to fully investigate this new, highly relevant information”.

But an Uber spokeswoman, Chelsea Kohler, said in a statement then: “None of the testimony today changes the merits of the case. Jacobs himself said on the stand today that he was not aware of any Waymo trade secrets being stolen.”

Uber maintained that it did not withhold information because the letter was outside of Waymo’s discovery demands. The special master, a court official helping out with the trial, did not agree, concluding in a report filed on Friday that “Uber should have produced” the Jacobs demand letter in response to Waymo’s discovery requests.

Source: The Guardian

Uber’s new legal chief warns staff not to spy on rivals

Uber’s new legal chief warns staff not to spy on rivals

Message comes as ride-hailing app faces allegations of aggressive competitive practices


Uber’s new chief legal officer has told the ride-hailing app’s security staff to stop spying on the company’s competitors, after allegations of the aggressive competitive business practices were revealed in court this week.

The ultimatum from Tony West comes as Uber’s new leadership struggles to break with the company’s scandal-hit past amid damaging new revelations that have raised questions over its business ethics and overshadowed the closing stages of a SoftBank-led investment deal.

“I’m learning about practices we followed here in the past that are simply unacceptable,” wrote Mr West, who took up the post last week. “The data breach and human surveillance are the two biggest issues I’ve learnt about in my short time here.”

If “anyone is working on any kind of competitive intelligence project that involves the surveillance of individuals, stop it now”, read the email, first reported by Recode. Mr West added he had not yet seen evidence the tactics were illegal.

Mr West’s email was sent to staff the day after a San Francisco courtroom heard explosive allegations from Richard Jacobs, a former Uber manager for global intelligence. Mr Jacobs testified that he found Uber’s approach to collecting data on competitors “overly aggressive and invasive and inappropriate”.

Dara Khosrowshahi, Uber’s new chief executive who took over in September, is trying to reshape the company’s culture under the slogan “we do the right thing, period”. This follows a run of scandals including the ouster in June of Uber’s former chief executive Travis Kalanick.

Mr Khosrowshahi forwarded Mr West’s memo to Uber’s entire staff on Wednesday. “The news that we failed to disclose a significant data breach, and that we showed poor judgment in our approach to competitors and our use of ephemeral communication for business purposes, has hurt the company just when we are beginning to turn the page,” Mr Khosrowshahi wrote.

The legal battles have also hit the company’s bottom line, and Uber’s losses widened to $1.5bn in the third quarter on generally accepted accounting principles.

A letter to Uber sent by the lawyer of Mr Jacobs this May alleges that the company’s intelligence unit “conducted unauthorised surveillance, including unauthorised recording of private conversations against executives from competitor firms, such as Didi Chuxing . . . and against its own employees and contractors at the Autonomous Technologies Group in Pittsburgh”.

The letter came to light as part of a lawsuit in which Waymo, the self-driving unit of Alphabet, has accused Uber of stealing trade secrets. Uber denies that allegation.

Although Nicholas Gicinto, manager of the intelligence-gathering Strategic Services Group, testified this week there was “very little truth” in the Jacobs letter, he admitted that Uber had conducted surveillance “that the people [they] were surveilling didn’t know about”.

Angela Padilla, Uber’s deputy general counsel, also argued in court that Mr Jacobs was a disgruntled former employee who had made “extortionist” demands for money.