Ride-hailing service Uber is facing a Department of Justice inquiry over its use of its “Greyball” program to evade regulators. The company used the tool, essentially a fake version of the Uber app, to operate in areas where it was not permitted to do so. A New York Times report called attention to Greyball in March. Uber responded by saying it would no longer allow employees to use the program to evade authorities.
A transportation audit by the city of Portland disclosed the inquiry when it was published last week. City officials said in the audit that the United States attorney’s office for the Northern District of California had notified them of the inquiry. Portland officials said they are cooperating with the Department of Justice.
On Thursday, Reuters reported that the inquiry was a criminal investigation.
The Greyball inquiry adds to a long list of recent scandals related to Uber, including accusations of a corporate culture of sexual harassment and newfound attention to CEO Travis Kalanick’s aggressive, risk-taking style of doing business. Kalanick is looking for a chief operating officer to help him with leading the company.
Uber is also being sued by Waymo, Google’s self-driving car outfit, for theft of intellectual property. Uber has been accused of stealing trade secrets it has used to develop autonomous vehicles. The judge in that case could order Uber to stop its development of autonomous vehicles.
The Greyball program was one element of a larger program called VTOS, standing for Violation of Terms of Service, used in the US as well as other countries such as South Korea, Brazil, and France. Uber has argued that the program, in use since 2014, has legitimate uses, such as hiding the location of drivers from competitors. However, officials are concerned that the program was also used to evade law enforcement. After tagging law enforcement, Uber used Greyball to show a fake version of the Uber app to officers attempting to hail a ride. The tool was approved by Uber’s legal team.
The tool was used in cities like Portland, where Uber faced competition from local taxi companies and local regulators enforcing rules against the service. Uber began operating there in 2014, without permission from city regulators.
When Uber’s use of Greyball was first disclosed, Portland mayor Ted Wheeler said “I am very concerned that Uber may have purposefully worked to thwart the city’s job to protect the public.”
In a letter to the city of Portland, dated April 21st, Uber said it had not used Greyball there since April of 2015, when Portland instituted a set of regulations for ride-hailing services.