Various news organizations are reporting that ride-hailing service Uber has come under federal investigation for possible use of secret software used to evade authorities in places where it lacked the authority to operate.
The federal criminal probe, reported by Reuters and The Washington Post, focuses on so-called “Greyball” software used to evade officials in cities where Uber was not yet approved to match riders and drivers. It aimed to identify regulators working undercover as riders trying to prove that the company was operating illegally.
Uber has been operating under shifting municipal rules in Kansas City in recent years. New legislation passed by the Missouri General Assembly and signed into law by Gov. Eric Greitens takes effect later this year, replacing tighter city regulations with looser state rules. In response, the dominant local taxi company plans to shift its business model to operate as “transportation network company” like Uber and Lyft.
News of a federal criminal investigation comes on the heels of other bad publicity for Uber, which pairs drivers in their own cars with customers using smartphone apps to arrange rides.
In recent months, Uber CEO and founder Travis Kalanick has seen the firm accused of sexual harassment at company headquarters, watched several top executives leave the company and become tied up in a trade-secrets lawsuit from Google’s parent company.
Uber has declined to comment to media on the criminal investigation. So has the Justice Department, which typically doesn’t concede the existence of ongoing investigations.
In a letter last week to Portland, Oregon, authorities, the Post reported, 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, according to the Post.