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Uber Under Criminal Investigation For Avoiding Regulators

By  |  May 5, 2017, 01:30pm  |  @captainkudzu

Uber, the popular ridesharing app that has become the bane of taxi companies and car services, is in trouble again. What has already been a bad year for the company is getting worse as Reuters reports that the US Justice Department has begun a criminal investigation over software that allowed Uber drivers to avoid regulators and law enforcement in areas where the service had not been approved.

The investigation centers around “Greyball,” a program that used the Uber app and other techniques to identify and avoid government officials. The New York Times first reported the existence of Greyball in March. According to the Times, Greyball was approved by Uber’s legal team.

Uber says that Greyball, which showed some users an alternate version of the Uber app that replaced the location of Uber vehicles on the map with fake ones, was used to protect drivers from harm and fraud. The program was part of a system that analyzed credit card data, device identification and location to determine whether a ride request was legitimate. In some cases, drivers allegedly canceled pickup requests after fares were flagged by Greyball.

Uber, which is valued at $68 million, is accused of using Greyball to evade transportation officials in Portland, Oregon in 2014 before the city granted the company approval to operate. Reuters says that Uber admitted to using the technology in Portland because it was “deeply concerned that its driver-partners would be penalized financially.”

It is not clear what potential charges Uber might face, but a Northern California grand jury has issued a subpoena for documents detailing how Greyball works and where it was deployed. Uber has retained an external law firm to conduct its own investigation into the matter. Reuters suggests that some aspects of Greyball might have extended beyond the Terms of Service agreement for Uber users.

Uber is no stranger to controversy. Earlier this year the company’s CEO got into a heated argument with a driver and was forced to apologize. A division of Google sued the company over similarities in self-driving car technology between the two companies. Uber was also the subject of a sexual harassment scandal at its main office and boycotts on social media.