2017-05-04 22:32:02
Uber Faces Federal Inquiry Over Use of Greyball Tool to Evade Authorities

SAN FRANCISCO — Uber is the subject of a United States Department of Justice inquiry over a program that it used to deceive regulators who were trying to shut down its ride-hailing service.

The inquiry concerns Uber’s use of a software tool called Greyball, which the company developed in part to aid entrance into new markets where its service was not permitted. The tool allowed Uber to serve up what was essentially a fake version of its app to evade law enforcement trying to crack down on its service.

The New York Times reported on Greyball in March, raising questions about the legality of the practice. After the report, Uber said it would prohibit employees from using the software to thwart regulators.

The federal inquiry was disclosed in a transportation audit conducted by the City of Portland, Oregon, published this week. In the audit, Portland officials said they were notified by the United States Attorney of the Northern District of California about the existence of the inquiry. The City of Portland said it was cooperating with the inquiry.

Reuters on Thursday reported that the nature of the inquiry was a criminal investigation. The United States Attorney of the Northern District of California generally conducts criminal investigations, and some of the laws that Uber may have broken carry criminal penalties. A federal inquiry often does not result in any charges being filed.

Press officers for Uber and the United States attorney, as well as the City of Portland, declined to comment on Thursday.

Uber has recently been grappling with a flurry of scandals. Apart from Greyball, Uber has come under fire for its at times raucous internal culture, sexual harassment claims and the aggressive, no-holds-barred approach to business espoused by Travis Kalanick, Uber’s chief executive.

Greyball was part of a larger program at Uber known as VTOS — short for Violation of Terms of Service — which was deployed in the United States and in countries like Brazil, South Korea and France. The program, Uber argued, had legitimate uses to obfuscate the location of its drivers from competitors or would-be attackers.

But officials are concerned with the program’s use in evading law enforcement. After using a series of techniques to identify and tag city officials, Uber would turn to the Greyball tool to show a false version of its app to officers who tried to hail an Uber car using their smartphones. Uber deployed the practice in cities where it faced opposition from local regulators or rival taxi and transportation companies.

In a letter dated April 21 to the City of Portland, which was included in the audit, Uber said it had not used the Greyball tool in the city after April 2015, when Portland officials put in place a set of regulations and a pilot program around ride-hailing companies. The Times reported that Uber used the Greyball tool there in late 2014, when the company’s service first entered Portland without the permission of city regulators.