Y’all. I don’t even know where to begin.

Have you ever had one of those weeks, or maybe even long weekends, when you genuinely disconnect from or simply don’t have as much time to pay attention to tech news?

But then, you come back from that brief reprieve, only for things to look kind of like this:

ETRUEL Affiliate program

Source: Giphy

I was going to write a full news recap for you this week. Even when limited to the tech realm, there was a lot that went on, from Snapchat’s bungled “surprise” partnership with Jeff Koons, to product announcements from Sonos, to even more struggles from major tech companies– like Google, Facebook, and Twitter — to curb the distribution and promotion of false content.

But as I reviewed all of the week’s developments, there was one main news item that really caught my eye, besides Google’s major product event on Wednesday (which I covered here): what’s going on with Uber.

Because this item is rather complex and in-depth, I’ve chosen to focus exclusively on Uber this week. It’s intricate, has evolved quickly, and is a lot for anyone to sort through.

That’s why I’ve synthesized what’s happening here, in what I hope is a cohesive, easy-to-digest manner, to help you catch up on things.

With that said: on your mark — get set — drive.

Spoiler Alert: This Kind of Has a Happy Ending

Over in London

Like most weeks, it seems, this was not a good one for Uber. There’s been a bit of a rollercoaster of events since Transport for London revoked its license to operate in that U.K. city, including the departure of Uber’s chief of northern Europe affairs, Jo Bertram.

Uber’s new CEO Dara Khosrowshahi has spent much of his recent time in London to meet with Mike Brown, commissioner of Transport for London. While both parties suggested that these discussions have been mutually beneficial, no formal decision has been made — nor will it be, it seems, until October 13, when a judge is due to issue a decision on the ride-sharing company’s appeal.

Until that process has reached a conclusion, Uber can continue operating in London, where it has roughly 40,000 drivers.

But as interesting a development as that might be, things were even more amplified for Uber in two other categories: its ongoing legal woes with Alphabet, and continuous drama over its board.

The Alphabet Lawsuit

To recap: When we last left off, Alphabet had obtained a significant document called the Stroz Report: a due diligence report named for the firm that prepared it, Stroz Friedberg, ordered by Uber when controversial self-driving technology engineer Anthony Levandowski would be joining its team. Levandowski is accused of stealing trade secrets from Waymo, Alphabet’s autonomous vehicle division, and no longer works for Uber. He has firmly exercised his fifth amendment rights throughout these proceedings.

Earlier this week, the Stroz report became public — and those with the intestinal fortitude to sift through all 34 pages can do so here:

1928-24 by Johana Bhuiyan on Scribd

But for those who don’t find poring over a due diligence report as much fun as we do, there are quick-acting transportation writers like Recode‘s Johana Bhuiyan, who managed to dissect the document before most of us were thinking about getting ready for bed.

Here are the highlights:

  • First, after seeing the amount of information disclosed in the report, it’s clear why Alphabet requested more time to review it prior to appearing in court — it’s a lot to get through, even if you don’t have to prepare a legal case. Earlier this week, a judge granted that request, and the trial date has been pushed to December 6th.
  • Stroz Friedberg discovered during its investigation that Levandowski was, in fact, in possession of “highly confidential” information from Waymo “stored on five disks on his personal Drobo 50,” which he later destroyed — things like “source code, files, and software pertaining to self-driving cars.”
  • The report also found that Levandowski met with Uber executives while he was still employed by Google (owned by Alphabet). Additionally, text messages exchanged with former Uber CEO Travis Kalanick were discovered to have taken place shortly after Levandowski left his post with Google.
  • Stroz Friedberg also discovered that Lior Ron, Levandowski’s co-founder of Otto (the company he launched prior to joining Uber), was in possession of similarly proprietary information. Shortly before leaving Google, it was found that he made efforts to destroy digital files, or at least learn how to do so.

While Alphabet maintains that this new information aids its case, Uber has claimed the opposite and says that these efforts to destroy files, for example, prove Kalanick’s insistence that Levandowski and his partners rid themselves of any proprietary data from Google.

It’s worth noting that before the Otto co-founders agreed to join Uber, they required indemnity from any potential legal action involving Google. According to a Recode report from July, that indemnity was “negotiated,” which could explain why neither has been named in the lawsuit. However, the reason why Levandowski was fired from Uber in May largely had to do with his lack of cooperation on the case. As the proceedings progress and the court date more closely approaches, it will be interesting to see if he and Ron remain legally unscathed.

The Board Drama

If you can believe it, this item might be even more complex and difficult to dissect than the Stroz report — so to simplify matters, events have been compiled into a timeline.

September 29, 2017

Former Uber CEO Travis Kalanick appointed two new members to its board of directors: former Xerox CEO Ursula Burns and former Merrill Lynch CEO John Thain. Each director filled one of two seats of which Kalanick previously had control — however, given Kalanick’s diminished role within the company, these appointments came as a surprise.

Some have suggested that this move by Kalanick was largely a power play among Khosrowshahi’s proposal to restructure the current model that allows those with more shares in the company to also have greater voting power. The new model would enact a one share = one vote formula.

That would also mean the removal of shares held by those to whom they were issued in the company’s earliest days — the same people, therefore, with the highest voting power. Under this proposal, those individuals stand to lose something potentially highly lucrative — including Kalanick, Benchmark (a venture capital firm and investor in Uber that is actually suing the former CEO), and certain employees.

Uber, for its part, later responded to Kalanick’s move with this official statement:

“The appointments of Ms. Burns and Mr. Thain to Uber’s Board of Directors came as a complete surprise to Uber and its Board. That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of.”

September 30, 2017

Khosrowshahi issued a short letter to Uber employees, expressing his disappointment and surprise by Kalanick’s board appointments. He reiterated the official statement from above, calling the move “highly unusual.”

October 3, 2017

The board met, primarily to vote on Khosrowshahi’s restructuring proposal, and essentially figure out who would have the most voting and significant decision-making power — and how much of that power would remain in Kalanick’s possession.

The overall goal that would hopefully emerge from what had thus far been a heaping pile of contention was what Recode‘s Kara Swisher called “obvious: To clear the way for a big, new $10 billion stock deal by SoftBank and, eventually, a smooth public offering for Uber next year that will top its current $70 billion valuation.”

In the end, the board voted in favor of moves that would largely continue to diminish Kalanick’s power. Here’s a summary of what emerged:

  • The one share = one vote model was approved. That reduces the voting power of both Kalanick and Benchmark, as well as others, who had strong opinions on the matter:

shervin pishevar has a colorful statement for you pic.twitter.com/F7YneqFDDA — ಠ_ಠ (@MikeIsaac)
October 3, 2017

  • The company will proceed with its efforts to ink an investment deal with Softbank, which has been in talks to buy a significant portion of the company’s shares. However, in order for that to happen, Softbank required some modification to Uber’s corporate governance — and with the aforementioned approved changes, that leaves more room for the deal to move forward.
  • The board approved plans for a 2019 IPO.
  • Six new board seats will be added, leading to a total of 17 directors.

A Symbolically Overheating Engine

All of this, of course, makes for quite a story — one that some might say is stranger than fiction. Perhaps that’s why New York Times reporter Mike Isaac has been commissioned to write an extensive book about Uber, and personally, the “pre-order” button can’t appear soon enough.

But it’s an ongoing story, and the book is expected to be released in 2019: right around the time that massive IPO is slated to take effect. Only more questions will arise — including my own, “Who will play all the major characters in the movie version?” — and we’ll be here to monitor, track, and digest the latest developments for you.


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