Technology

Uber is reportedly under criminal investigation for evading regulators

Troubled ride-hailing startup Uber has another big headache to deal with: a federal probe reported to be criminal in nature.

A Portland Board of Transportation audit released last week says that the city has been contacted by federal investigators over Uber’s use of its “Greyball” program, specialized software that allowed the service to evade local regulators. The Justice Department probe is a “criminal investigation,” according to Reuters.

“After PBOT initiated this investigation, the City of Portland was notified by the United States Attorney of the Northern District of California that Uber is the subject of a federal inquiry,” the Portland audit report states. “The City of Portland is cooperating with this ongoing probe.”

Neither representatives for the Justice Department nor Uber immediately responded to a request for comment.

The New York Times first reported on the Greyball program in early March, and the software was used to prevent regulators from hailing rides by identifying them as city officials using the app. Greyball was part of a larger program called VTOS (Violation of Terms of Service) that was developed in 2014 for purposes like fraud prevention, in addition to deceiving regulators. Greyball was used primarily outside the U.S. until the program was revealed in March, and the Portland audit report says it hasn’t been used in Portland since April 2015.

A few days after the Times’ March story, Uber Chief Security Officer Joe Sullivan said, “We are expressly prohibiting its use to target action by local regulators going forward.”

The latest news heaps more problems on CEO Travis Kalanick, who has pledged to reform the hard-charging culture at the world’s most valuable startup.

In addition to the federal inquiry, the company is trying to fend off a lawsuit from Waymo, Google’s self-driving unit, alleging that an ex-Waymo executive who later joined Uber stole reams of proprietary information before doing so.

There’s also the investigation into the Uber workplace culture, being led by outside lawyers (including former U.S. Attorney General Eric Holder), that was initiated after a viral February blog post detailing an ex-employee’s experience of sexual harassment at the company. The details of that investigation are expected to be made public sometime later this month.

 

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