Alphabet (GOOGL) Executive Resigns From Uber's Board

The conflict of interest between Alphabet Inc. (NASDAQ:GOOGL) and Uber Technologies is now more evident with Alphabet executive David Drummond departing from Uber’s board.

He stated that "I recently stepped down from Uber's board given the overlap between the two companies."

The conflict of interest is clearly surrounding self driving cars, a technology Alphabet has been very publicly testing and attempting to commercialize. Uber has taken some steps in the same direction while also working on indigeneous maps that might one day replace Google Maps.

The Information's Amir Efrati reported that Uber CEO Travis Kalanick had prevented Drummond from attending board meetings. Even if he hadn’t, the director would have had to recuse himself, given his relationship with Alphabet.

Drummond currently serves as Alphabet’s senior vice president of corporate development and chief legal officer.

Past Alliance

Google and Uber worked closely in the past. Drummond joined Uber’s board in 2013 when Alphabet’s venture capital arm GV, then Google Ventures, invested $258 million in the company and planned to include Uber rides in the Google Maps app. It is GV’s largest investment to date.

All’s Not Well Now

Things started to go wrong when Uber decided to develop its own mapping and driverless car technology. The company has opened a technology center in Pittsburgh and hired some robotics specialists from Carnegie Mellon University. It has also collaborated with automakers such as Volvo and acquired Otto, a self-driving truck company created by former Google employees. The company is planning to roll out semi-autonomous cars by the end of this month.

Google on the other hand has launched a pilot project that enables carpooling in San Francisco Bay Area. Available through Google-owned maps app Waze, the service is presently under beta testing with a handful of Bay Area companies including Adobe and Google itself.

History Repeats Itself

The incident reminds us of Google co-founder Eric Schmidt’s resignation from Apple Inc.’s (NASDAQ:AAPL) board after Google started developing the Android operating system. The basic reason behind both these resignations appears to be the same - to avoid conflict of interest.

Zacks Rank and Stocks to Consider

Currently, Alphabet has a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering are Facebook, Inc. (NASDAQ:FB) and LinkedIn Corporation (NYSE:LNKD) , each sporting a Zacks Rank #1 (Strong Buy).

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