- Reuters Staff
If you’re to believe Uber’s lawyers, the fate of the $69 billion company is tied up in one bid from an opponent trying to stop its work on self-driving cars.
Waymo, a subsidiary of Google-parent company Alphabet, sued Uber in February claiming it stole trade secrets. Weeks later, it filed a preliminary injunction to try to stop Uber’s work on self-driving cars until the case resolves.
Uber obviously doesn’t want that to happen, but not because it may just slow down its research. A stop to the self-driving car work would apparently threaten to topple Uber’s entire business.
In its response to court on Friday, Uber said stopping its work on self-driving cars would threaten its future as a “a viable business.”
“To hinder Uber’s continued progress in its independent development of an in-house lidar that is fundamentally different than Waymo’s, when Uber has not used any of Waymo’s trade secrets, would impede Uber’s efforts to remain a viable business, stifle the talent and ingenuity that are the primary drivers of this emerging industry, and risk delaying the implementation of technology that could prevent car accidents,” Uber said (emphasis ours).
Of course, many people question whether a company that’s believed to be losing billions of dollars a year is a “viable” business to begin with. The six-year-old company hasn’t yet figured out how to make humans in the drivers seat work as a profitable business, and it’s also tackling everything from food delivery to vertical take off planes.
Discussions about the current viability aside, Uber continues to repeat that self-driving cars are “existential” to its future even though internally the company crowned 2017 the year of the driver (the human kind).
Even when it comes to its bottomline, Uber hasn’t bet the house, based on its own internal calculations. In March, The Information revealed that removing the driver from the equation would “only increase Uber’s projected long-term net profit margin by as much as 5 percentage points,” according to the report.
So if a robocar fleet is the El Dorado of profitability, why does it consider self-driving cars the only way it can remain viable? It’s because its CEO Travis Kalanick has a great fear of his entire business being left behind and has already bet that autonomous cars are the future.
Take this interview with Business Insider in August 2016 right after it purchased Otto, the company at the heart of the lawsuit (emphasis ours):
Biz Carson: You called the development of autonomous vehicles existential to the company, and you’ve also called buying Otto another existential move. So what is so existential about it and where is that threat really coming from?
Kalanick: I think it starts with understanding that the world is going to go self-driving and autonomous. Because, well, a million fewer people are going to die a year. Traffic in all cities will be gone. Significantly reduced pollution and trillions of hours will be given back to people – quality of life goes way up. Once you go, “All right, there’s a lot of upsides there” and you have folks like the folks in Mountain View, [California,] a few different companies working hard on this problem, this thing is going to happen. So if that’s happening, what would happen if we weren’t a part of that future? If we weren’t part of the autonomy thing? Then the future passes us by, basically, in a very expeditious and efficient way.
Carson: How soon will self-driving cars realistically be a significant portion of Uber’s fleet?
Kalanick: That is the trillion-dollar question, and I wish I had an answer for you on that one, but I don’t. What I know is that I can’t be wrong. Right? I have to make sure that I’m ready when it’s ready or that I’m making it ready. So, I have to be tied for first at the least.
Calling a single injunction a threat to Uber’s future may be a bit of hyperbole on the behalf of Uber’s lawyers, but it does match the paranoia of Uber’s CEO.
Kalanick strongly believes that Uber needs to be among the leaders of the self-driving car revolution, even if internally the company doesn’t think it’ll radically change the business. Uber’s already behind the mark in multiple ways, especially when compared with Waymo, which is trying to impede its development. Uber may sound hysterical that its future could really be up in smoke if a preliminary injunction goes through, but in the mind of its CEO, self-driving cars are one thing that it has to have before the future passes it by.