SAN FRANCISCO -- A criminal investigation of Uber Technologies Inc. has turned up revelations that the ride-hailing company used encrypted messaging to hide its tracks while spying on rivals, evading authorities and fighting off lawsuits.
Richard Jacobs, who was a manager on a corporate surveillance team at Uber, privately told federal prosecutors about the secret messaging system and publicly testified about it Tuesday. He provided details on how Uber employees were trained to "destroy communications that might be considered sensitive."
The San Francisco-based company is embroiled in multiple scandals. As of October, Uber was facing at least five criminal investigations by the U.S. Justice Department, Bloomberg News reported.
The revelations stem from and further complicate an already labyrinthine plot in Waymo's lawsuit accusing Uber of trade-secret theft. Jacobs was put on the witness stand Tuesday after U.S. District Judge William Alsup learned from prosecutors last week that Jacobs had communicated with them.
Jacobs became the star attraction at a hearing that was meant to cover final preparations for a much-anticipated trial over allegations that Uber stole self-driving technology from Waymo. The trial, which was set to begin today with jury selection, was indefinitely postponed over the judge's concern that relevant information that Jacobs shared with prosecutors may have been withheld from Waymo.
"I would look like a fool if Uber were to fool me," Alsup said, rejecting an Uber lawyer's attempt to push forward with the trial. The judge said he'd been burned enough times by Uber's promises that it had scoured its servers for key evidence it was required to turn over.
Alsup said that he takes Jacobs's allegations seriously because prosecutors found the ex-employee to be credible in his account of Uber relying on nontraceable devices and automatically-deleting messaging systems.
On the other hand, the judge forced Jacobs to reveal that he reached a $4.5 million settlement with Uber that Alsup said could mean he's been "bought off."
Under intense questioning from both Waymo and the judge, Jacobs softened and recanted some of the most sensational criticism of Uber contained in a 37-page letter his lawyer wrote to prosecutors. The letter is sealed, but the judge said he intends to make it public after hearing any objections.
Uber said none of Tuesday's testimony "changes the merits" of Waymo's lawsuit. The ride-hailing company has denied wrongdoing.
"Jacobs himself said on the stand today that he was not aware of any Waymo trade secrets being stolen," Uber said in an emailed statement.
Arturo Gonzalez, a lawyer for Uber, sought to put Jacobs' assertions about the company's practices in context, saying his attorney conveyed them while "seeking money" from Uber.
"There's no there there," Gonzalez said. He convinced Alsup that Waymo needs to reveal whether it, too, relies on self-deleting technology.
Over the course of the hearing it became unclear whether the seemingly bombshell revelations about Uber's corporate surveillance tactics will be of much help to Waymo's case.
Alsup said there's a 50-50 chance the information revealed by Jacobs will prove damaging to Uber or a "dry hole."
Business on 11/29/2017