Lyft Was in Talks to Buy Self-driving Truck Startup Otto at Center of Google Lawsuit Before Uber Acquired It

The self-driving truck startup Otto sold to Uber in August 2016 in a deal valued at nearly $600 million. The deal set Uber on a collision course with Google: Google is currently suing Uber, claiming that Uber acquired trade secrets stolen by Anthony Levandowski, an Otto co-founder and former Google employee.

But it could easily have been another ridesharing company in Google’s crosshairs.

Otto co-founder Lior Ron testified in court today that he also negotiated with Lyft about selling the startup to them. The negotiations were serious, according to Ron. Lyft proposed a dollar amount that it would offer for Otto, as well as technical milestones that the acquired Otto team would be expected to achieve. However, Lyft didn’t offer a term sheet, Ron said, and the discussions never solidified into a deal.

Ultimately, Levandowski and Ron decided to sell to Uber instead because Uber supported the pair’s vision of building self-driving trucks. Lyft was disinterested in the trucking business, Ron testified.

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.

Uber’s then-CEO Travis Kalanick moved quickly to form a partnership with Levandowski, according to court testimony. In a hearing yesterday, Kalanick explained that he met with Levandowski in December 2015 to discuss a deal. Otto finalized its sale to Uber in April 2016, court records show.

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.

Uber stands to be dealt a major setback if it loses the trial. Waymo estimated its damages at $1.9 billion.

If self-driving car pioneer Waymo succeeds in convincing the jury Uber stole its trade secrets and used them to jump-start its autonomous vehicle program, it could stop Uber in its tracks, along with demanding as much as $1.86 billion in damages.

If Uber wins, it’s a blow to Alphabet and Google and  a green light to Uber to move full steam ahead with its plans for transportation hegemony. 

A Lyft spokesperson did not respond to a request for comment on the negotiations.

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