LAW: Justice Department opens criminal probe into Uber

Authorities are investigating the ride-hailing company's use of "greyballing" software

May 05, 2017
Authorities are investigating the ride-hailing company's use of "greyballing" software
Authorities are investigating the ride-hailing company's use of "greyballing" software

The Justice Department has launched a criminal investigation into Uber's use of a secret software that was used to evade authorities in places where its ride-hailing service was banned or restricted, according to a person familiar with the government's probe, the Washington Post reported.

The investigation, in its early stages, deepens the crisis for the embattled company and its chief executive and founder, Travis Kalanick, who has faced a barrage of negative press this year in the wake of high-profile sexual harassment complaints, a slew of executive departures, and a consequential trade-secrets lawsuit from Google's parent company.

The federal criminal probe, first reported by Reuters, focuses on software developed by Uber called "Greyball." The program helped the company evade officials in cities where Uber was not yet approved. The software identified and blocked rides to transportation regulators who were posing as Uber customers in an effort to prove that the company was operating illegally.

In a letter last week to Portland, Ore., authorities, who had requested information about the program as part of a civil probe, Uber said greyballing refers to the practice of showing some customers a different version of the app than most customers see. Uber's attorneys said the program was used "exceedingly sparingly" in Portland, and that the company had not used it since April 2015, when Portland adopted preliminary rules allowing Uber to operate.

The investigation launches just a few months after the company was slammed with a massive trade secrets lawsuit from its competitor in self-driving cars, Waymo. Waymo, which is the self-driving car division of Google’s parent company, charged Uber and a former Google employee of stealing 14,000 documents detailing Waymo’s proprietary technology. Waymo has requested that a judge temporarily block Uber’s self-driving program for the duration of the lawsuit.