Uber Investor Sues Over Self-Driving Car Firm Acquisition

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  • Directors accused of failing to properly vet 2016 purchase
  • Uber accused of stealing self-drive technology by Google unit

Uber's New CEO Faces Some Big Challenges

Uber Technologies Inc. directors were accused of failing to properly review the ride-sharing company’s $680 million acquisition of a self-driving technology firm that wound up being accused of stealing trade secrets from a unit of Alphabet Inc.

Uber’s board recklessly approved the purchase of a company owned by former Google engineer Anthony Levandowski, who has been accused of stealing seven years of research material about self-driving cars from his former employer, according to an investor’s lawsuit in Delaware Chancery Court.

The suit, filed Wednesday by Uber investor Lenza McElrath III, comes as a California judge delayed until Jan. 31 a trial over trade-secret theft claims brought against Uber by Alphabet unit Waymo.

McElrath accuses directors of ignoring “red flags” about the 2016 acquisition of Levandowski’s firm that amounted to “an improper and potentially criminal raiding of Google’s assets,” according to the complaint.

Matt Kallman, an Uber spokesman, said executives were reviewing the suit and declined to comment on it. He noted that Elrath, a former Uber engineer, has sued the company in the past about misleading employees about compensation issues.

Access Technology

Waymo accuses Uber of hiring Levandowski to get access to technology that would help develop a laser-scanner system, known as LiDAR. That system uses laser-beam reflections to sense a vehicle’s surroundings so the car can avoid pedestrians, obstacles and other vehicles. The technology is key for Waymo, Uber and other companies looking to move into the autonomous-vehicle market.

The directors’ failure to oversee the purchase of Levandowski’s company is another example of the company’s renegade approach to business tied to founder Travis Kalanick, McElrath said in the suit. Kalanick, ousted as the company’s CEO in June after a series of allegations of misconduct, is having an arbitrator decide whether he still controls some of the firm’s board seats. Kalanick and other Uber directors are named as defendants in McElrath’s suit.

The case is McElrath v. Kalanick, No. 2017-0888, Delaware Chancery Court (Wilmington).

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