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Encrypted texts, untraceable phones, late night secret meetings and self-deleting messages: ordinarily these are the stuff of spy novels.

But a former Uber employee this week electrified a San Francisco courtroom with allegations that a unit in the ride-hailing app routinely employed such tactics and sought to steal information from its competitors.

The testimony from Richard Jacobs, a former Uber manager for global security, has upended the company’s efforts to fend off a $1.8bn lawsuit claiming that it stole trade secrets from Waymo, Alphabet’s self-driving car unit.

US District Judge William Alsup, who is presiding over the case, was so enraged by the way Mr Jacob’s information came to light that he has delayed the trial, which was due to start next week, and accused Uber of “withholding” evidence in what looked like a “cover-up”.

The allegations also come at a critical time for Uber and its new chief executive Dara Khosrowshahi, who is seeking to distance the company from the aggressive course it charted under co-founder Travis Kalanick.

The ride-hailing app is struggling with widening losses as it tries to sell a large tranche of its shares to a consortium of investors led by SoftBank, the Japanese company, while coming under fire for failing to disclose a major data breach last week.

Waymo and Uber have been sparring in court since February, when the Google sibling alleged that Uber stole and used its trade secrets when it acquired Otto, a self-driving truck company founded by former Waymo employee Anthony Levandowski.

The claims not only damaged the reputation of Uber’s autonomous vehicle research unit, but also prompted the firing of Mr Levandowski, who downloaded thousands of Waymo documents before leaving his former employer.

Uber has denied the allegations, arguing that Waymo trade secrets never appeared in its servers.

But that defence was undercut when federal prosecutors wrote to Judge Alsup this week and included a 37-page letter from Mr Jacobs’s lawyer to Uber’s deputy general counsel.

The letter, which dates back to April or May, alleged that an Uber business unit dedicated to “stealing trade secrets” was using a sophisticated system of encrypted and ephemeral messaging designed to avoid a paper trail.

Judge Alsup was outraged that Uber’s lawyers had not disclosed the letter to Waymo, in violation of legal rules. Instead prosecutors had uncovered the document as part of a separate criminal probe, which is not public.

The trial was postponed indefinitely and Judge Alsup called Mr Jacobs and two Uber employees to testify about the allegations. He was particularly outraged by Mr Jacobs’s references to a separate messaging protocol, allegedly isolated from the rest of Uber’s records so that the information would be harder to find in case of an investigation or legal case.

“It turns out that the server is only for the dummies and the real stuff goes on the shadow system, ”Judge Alsup railed.

Uber and Waymo have held talks over a possible settlement, but never reached an agreement. Waymo previously estimated in court hearings that the damages allegedly inflicted by Uber could be as high as $1.8bn.

Now the ride-hailing app will face fresh pressure to settle the case.

Uber “have so destroyed their reputation with the judge”, said Carl Tobias, a professor at the University of Richmond law school. “I can’t see how they can avoid settling the underlying litigation . . . you just don’t want to be going in front of a judge who is already leaning against you.”

During court testimony, Mr Jacobs explained that he wanted the letter to raise concerns about business intelligence practices that, to him, “felt overly aggressive and invasive and inappropriate”.

“I did not believe it was patently illegal, I had questions about the ethics of it,” he said.

He also repeated many of the letter’s allegations, including claims that Uber was deliberating trying to “impede, obstruct and influence” ongoing lawsuits by using auto-deleting messaging systems, including an app called Wickr.

Mr Jacobs also described an internal Uber presentation from last December in which Ed Russo, who still works for the company, instructed employees on good information security practices. Mr Russo is said to have described a company chief executive who was seeking to woo a tech whizz, who had previously worked for a rival.

While negotiating for the chief executive to buy a new company run by the potential recruit, the pair were said to have kept conversations off devices and out of emails and snuck out for late night walks through San Francisco to discuss their plans.

The presentation used 10 slides, which have since been deleted.

Lawyers said it is not illegal for companies to routinely destroy documents after a reasonable amount of time. But when the information is related to an ongoing lawsuit or government investigation, companies are required to preserve it and produce it if a court requires.

Arturo Gonzalez, the company’s lawyer, argued in court that a small group of employees had “legitimate” reasons for using disappearing messages, and pointed out that the letter at the centre of the controversy was written after Mr Jacobs had been fired and was seeking a financial settlement.

Uber gave Mr Jacobs a $4.5m settlement package following their split last April, a sum that included payment for retaining his services while he helped with an internal investigation. Uber paid about $1,000 in travel expenses for him to appear at the pre-trial hearing, he said.

Uber is embroiled in dozens of courtroom battles with plaintiffs ranging from its own drivers and passengers to governments.

Additional reporting by Hannah Kuchler

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