Former Uber CEO Travis Kalanick was deposed for seven hours in late July as part of the legal battle over allegedly stolen trade secrets concerning self-driving car technology.
Uber’s lawyers released a lightly-redacted copy of the transcript on Friday afternoon in the latest update to the sprawling legal battle between the world’s most valuable startup and the Alphabet self-driving subsidiary, Waymo.
Much of the transcript focuses on whether, and when, Kalanick knew that Anthony Levandowski, a talented engineer, took files about laser sensors called lidar from Waymo.
In 2016, Uber bought the startup Levandowski founded after he left Waymo for a reported sum of $680 million.
That’s a lot of money for a startup that was less than a year old. But in his deposition, Kalanick gives a rousing defense of the “acqui-hire,” or the practice of big tech companies buying young startups for talent, and also explains why the 25-person company may have been worth that much.
Waymo: Why wasn’t the decision just to hire Mr. Levandowski straightaway?
Kalanick: I mean, I would say though this was technically an acquisition, it was very much like hiring him.
Waymo: Okay, so it was just structured as an acquisition.
Kalanick: Yeah. It was like – it was – there are different things on acquisition. You have this thing called an acquihire. Then you have like an acquisition of a very mature company. And there’s lots of stuff in between.
We basically were hiring him and his team but getting some – like a sort of small acquisition along with it. It was sort of – it was a – it was a hybrid of the two.
Waymo: And what was the small acquisition?
Kalanick: Well, I mean, he’d set up the company. He had, of course, recruited a team. He had – he had, you know, he had trucks that were – you know, let’s call them self-driving trucks, of course, with a safety driver.
I was in one of them. Glad there was a safety driver.
You know, so he was getting down that path and building something that he had a team that was passionate about, but it was early, you know.
Waymo: What was the — what was the benefit of doing a structure where you hired him and his team through an acquisition as opposed to just hiring them directly?
Kalanick: Well, I mean, one was because he wanted to — he was — he was — he was building something. Like we didn’t come up with an agreement until, I think, April of ’16. He was building one way or the other. Right?
So I would have loved to have hired him for $100,000 a year — that would have been amazing — and been able to recruit lots of wonderful engineers as well. But it’s a two-way street. Right? The other side, of course, has to be excited about what they’re doing.
You know, they have to feel like they’re being valued at what they’re worth.
You know, a lot of – my understanding is a lot of Google employees had gotten very huge bonuses. So you’re just going to have a tougher time just recruiting in a situation like that.
Waymo: Why would it make any sense to do a structure where you agree that first Mr. Levandowski and his team would form a company and then later Uber would buy that company versus just hiring Mr. Levandowski and – and his team?
Kalanick: I mean, you would have to – I think there’s a couple of reasons.
One is you – you would have to come up with some kind of – some kind of structure to bring those employees in if you wanted to.
And if you didn’t – if they didn’t – if – if there are a group of people who wanted to come across, but they wanted to prevent us from hiring each individual, I could imagine wanting to structure a company they were all a part of , and then requiring us to buy that structure in order to get all of them.
So it was almost like – kind of collective bargaining almost.
Experts in autonomous vehicles and self-driving cars are known in Silicon Valley for being some of the most high-paid talent. Levandowski was paid a $120 million bonus by Google before he started Waymo, for example.
It’s evident that Kalanick and Uber’s top leadership were concerned that they were ultimately paying a lot of money for a handful of engineers, at one point calling the talks to buy Otto “Project Dollar Sign.”
The prices discussed for Otto in the transcript are redacted, but Uber reportedly paid $680 million in stock as well as other considerations for the young company.
“But that’s a LOT of money for 25 people,” says one email mentioned in the transcript. The email was purportedly sent by Emil Michael, one of Kalanick’s top lieutenants.
The final reported sale price for Otto would work out to about $27 million per employee.
“Jeff, I think we need to do some quick work on per capita equity for these guys versus other recent hires to show them their math is wrong on not getting a sufficient premium to off-the-street folks,” another Uber leader wrote in an email mentioned in the transcript.
Later in the deposition, Kalanick says that the price Uber paid for the 25 Otto employees was in-line with the industry.
Kalanick: I don’t know if that’s clear, but certainly, getting a team of people together that’s worked – that’s some of the best experts in the world, and get them on board, working as a team as quickly as possible, is incredibly valuable.
I mean, you look at the deals that were going on at this time. You have, like a Cruise deal that was in, like, the billion-dollar range. You have companies like Amazon, Apple, others sort of sniffing around, bringing on talent at, like, exorbitant rates.
And to be honest, if you just look at any scan of AV acquisitions or machine learning or other types that are related, the kinds of acquisitions and the kind of premium that the talent is getting right now, it’s not really disputable that that’s just normal.
Levandowski has been fired from Uber and Kalanick is no longer CEO of the embattled startup.
A Waymo spokesperson referred us to this statement:
“We believe these actions were part of a concerted plan to steal Waymo’s trade secrets and intellectual property. Months before the mass download of files, Mr. Levandowski told colleagues that he had plans to ‘replicate’ Waymo’s technology at a competitor.”
Read the entire transcript: