Uber under fire from new letter alleging corporate espionage, theft of trade secrets

Uber under fire from new letter alleging corporate espionage, theft of trade secrets
A new letter details allegations about Uber's tactics against competitors. (Leon Neal/Getty Images)

A letter written by a former Uber manager alleges that the ride-sharing company committed corporate espionage, stole trade secrets, and spied on foreign executives, according to published reports.

The letter, unsealed by a federal judge on Friday, reveals new details about Uber’s alleged surveillance of its competitors, CBS News reported. Uber allegedly used a team of spies to steal trade secrets from rivals and employed other tactics to undercut competitors, according to the letter written by Richard Jacobs, a former manager of Uber’s global intelligence unit.

Why is this important?

The information is important because of an ongoing $1.86 billion legal battle between Uber and Alphabet’s self-driving unit Waymo, CBS News stated. The letter is also now evidence in a criminal investigation by the U.S. Justice Department. The Justice Department has not said why it is investigating Uber, according to recent reports.

What are the specific allegations?

In the letter, Jacobs alleges that Uber  “used undercover agents to collect intelligence against the taxi groups and local political figures. The agents gathered intelligence by taking rides in local taxis, loitering in locations where taxi drivers congregate, and leveraging a local network of contacts with connections to police and regulatory authorities,” TechCrunch reported.

Other allegations maintain that Uber spied on “executives of overseas rivals, tracking their movements and who they were meeting with,” according to CBS News. Parts of the letter were redacted to protect the identities of former CIA agents who assisted in the operation.

According to reports, Joe Sullivan and Craig Clark, former Uber security executives, were central in developing the company’s clandestine operations. The two allegedly targeted overseas rivals and Waymo in the U.S. “while creating a network of secret communications channels and alternate devices designed to cover their digital tracks and avoid legal trouble,” according to CBS News.

Sullivan and Clark were reportedly fired by Uber for allegedly paying two hackers $100,000 to steal information from drivers and passengers and then cover it up. The alleged cover-up involved hacking personal information for a total of 57 million passengers and drivers, CBS News reported.

How has Uber responded to these allegations?

In an email obtained by CBS News, Uber spokesman Matt Kallman responded to the claims made in the letter:

“While we haven’t substantiated all the claims in this letter — and, importantly, any related to Waymo — our new leadership has made clear that going forward we will compete honestly and fairly, on the strength of our ideas and technology.”

Jacobs worked as Uber’s manager of global intelligence before being fired in April, according to reports. Uber negotiated a $7.5 million settlement with Jacobs and his lawyer, Clayton Halunen. The deal was reached even though a top Uber attorney called Jacobs’ letter “little more than blackmail,” CBS News reported.

In a statement to TechCrunch, a Waymo spokesperson stated: “Uber improperly withheld the Jacobs Letter, which exposes the extreme lengths it was willing to go both to get a leg up on competition and hide evidence of bad acts. Separate and apart from the letter, Waymo has accumulated significant evidence that Uber is using stolen Waymo trade secrets, including copying aspects of Waymo’s LiDAR designs down to the micron, and we look forward to trial.”

Are there any other allegations?

Uber is no stranger to controversy. Within the past year, the ride-sharing company has endured allegations of sexual harassment within the company and allegations that it used technology used to sidestep regulators.