Uber faces criminal investigation over use of secret Greyball tool to deceive regulators

The latest revelation comes as Uber grapples with a series of scandals since the beginning of 2017.

The US Justice Department has launched a criminal investigation into the use of Uber's Greyball tool to evade authorities. Reuters

The US Justice Department has launched a criminal investigation into Uber's secret "Greyball" tool, which was used to deceive authorities in markets where the company faced restrictions, Reuters reported on Thursday (4 May). Uber admitted the use of the elaborate tool that allowed the firm to serve up a fake version of its app that was either filled with "ghost" Uber cars or no cars at all.

The technology was used to avoid officials who tried to ticket or apprehend drivers in sting operations in multiple cities and countries around the world where the service was not yet permitted such as Portland, Las Vegas, Boston and even China, South Korea, France, Italy and Australia.

After the New York Times revealed Greyball's existence in March, Uber vowed to stop using it to evade authorities.

Advertisement

However, the company said the tool was used for various purposes including "the testing of new features by employees, marketing promotions, fraud prevention, to protect our partners from physical harm and to deter riders using the app in violation of our terms of service".

The city of Portland launched its own investigation into the secret software shortly after NYT's report and requested the company to turn over details about the program.

Portland authorities reported that Uber's Greyball was used to evade 16 Portland Bureau of Transportation officials and denied them dozens of rides back in December 2014, before Uber was legally approved in the city. However, the city said no evidence was found to suggest that Uber continued using the tool after it gained legal approval in Portland.

In letters sent to Portland authorities, Uber's legal team said the Greyball tool was used "exceedingly sparingly" in the Rose City before the ride-hailing service was authorized in 2015.

Sources have told Reuters that the federal investigation is still in its early stages. The embattled ride-hailing company received a subpoena from a Northern California grand jury requesting documents detailing how Greyball worked and where it was used. However, a subpoena does not necessarily indicate any wrongdoing or mean charges will be brought against the company.

The latest revelation comes as Uber continues to grapple with a series of scandals.

These include an internal investigation into sexism and sexual harassment claims, a damaging #UberDelete campaign, use various tools to gain a competitive edge and a fierce legal battle with Alphabet's self-driving unit Waymo.

Advertisement

An embarassing video of CEO Travis Kalanick that showed him berating an Uber driver prompted the executive to admit he needs "leadership help."

Uber has also seen an executive exodus as multiple high-ranking managers have left the troubled firm over the past few months.

© Copyright 2017 IBTimes Co., Ltd. All Rights Reserved.