Otto co-founder Lior Ron said selling to Uber was not guaranteed.
The timeline of events leading up to Uber’s acquisition of self-driving trucking startup Otto has always been a bit muddled.
But Alphabet’s lawsuit against Uber, which centers on that acquisition, has yielded more information about that deal.
Today, on the third day of trial in the U.S. district court for the Northern District of California, Otto co-founder Lior Ron took the stand and testified that selling to Uber was not a guarantee. In fact, he said the startup he created with former Uber and Waymo self-driving engineer Anthony Levandowski was fielding offers from Uber competitor Lyft.
Lyft declined to comment for the story.
Alphabet is suing Uber because the company claims that Levandowski stole files to bring to Uber when he left to start Otto — which Uber later acquired.
As Uber’s former CEO Travis Kalanick testified, he wanted to hire Levandowski and his team to help accelerate Uber’s slow-to-develop self-driving arm. But Levandowski wanted to start his own company. So eventually acquiring Otto would be a solution that achieved both aims.
But leaving Alphabet’s self-driving arm wasn’t always the plan, at least according to Ron’s testimony. According to Ron, both he and Levandowski wanted to help accelerate Alphabet’s self-driving project, later called Waymo. The two decided that the best way was to explore creating autonomous solutions for commercial transportation, in this case driverless trucks.
Email evidence shows that the two drafted a letter to Alphabet CEO Larry Page, signed only by Levandowski, saying that Waymo was broken and the team wasn’t moving fast enough. They advocated for the creation of a second team that would work in parallel on driverless trucks.
But Alphabet wasn’t interested in driverless trucks, Ron said during his testimony. That’s when Ron said he and Levandowski started talking to other players, namely Uber and Lyft. While Levandowski was negotiating with Kalanick, writing in a text that Uber’s then-CEO needed to agree to hard terms or he would “destroy him,” the duo was also talking to Lyft about acquiring Otto.
“We had a lot of options on the table,” Ron said during his testimony on Wednesday. “We just weren’t sure what the right option was. My concern was we were very complementary to Google. If we were to partner with Uber … would it be seen as competitive.”
That meant having discussions with Lyft about different milestones the company would want Otto to meet, as well as prices, even though those conversations did not result in a full term-sheet agreement.
Ultimately, Lyft wasn’t interested in developing self-driving trucks — something Ron said was very important to him.
In the months since Uber acquired Otto, Lyft has ramped up its own self-driving efforts, partnering up with players like Waymo and Ford and opening up its own driverless research and development center.
While neither Lyft nor Alphabet appeared to be interested in the commercial freight space, Ron claimed that he and Levandowski negotiated hard with Uber. In fact, because Otto never reached the technical milestones it agreed to with Uber, he has only amassed $20,000 from that initial transaction to date.
Ultimately, it sold to Uber, sparking what would eventually become the current legal saga that Uber and Alphabet are embroiled in.
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