8/9/2017
Uber Faces Federal Inquiry Over Use of Greyball Tool to Evade Authorities - The New York Times
https://nyti.ms/2pMKxrL
TECHNOLOGY
Uber Faces Federal Inquiry Over Use of
Greyball Tool to Evade Authorities
By MIKE ISAAC MAY 4, 2017
SAN FRANCISCO — Uber is the subject of a United States Department of Justice
inquiry over a program that it used to deceive regulators who were trying to shut
down its ride-hailing service.
The inquiry concerns Uber’s use of a software tool called Greyball, which the
company developed in part to aid entrance into new markets where its service was
not permitted. The tool allowed Uber to deploy what was essentially a fake version of
its app to evade law enforcement agencies that were cracking down on its service.
The New York Times reported on Greyball in March, raising questions about the
legality of the practice. After the report, Uber said it would prohibit employees from
using the software to thwart regulators.
The federal inquiry was disclosed in a transportation audit conducted by the
City of Portland, Ore., published last week. In the audit, Portland officials said they
had been notified by the United States attorney’s office for the Northern District of
California about the existence of the inquiry. The City of Portland said it was
cooperating with the inquiry.
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8/9/2017
Uber Faces Federal Inquiry Over Use of Greyball Tool to Evade Authorities - The New York Times
Reuters reported on Thursday that the inquiry was a criminal investigation. The
United States attorney’s office for the Northern District of California generally
conducts criminal investigations, and some of the laws that Uber may have broken
carry criminal penalties. A federal inquiry often does not result in any charges being
filed.
Press officers for Uber and the United States attorney’s office, as well as the City of
Portland, declined to comment on Thursday.
Uber has been grappling with a number of scandals. Apart from Greyball, Uber
has come under fire for its at times raucous internal culture, sexual harassment
claims and the aggressive, no-holds-barred approach to business espoused by Travis
Kalanick, Uber’s chief executive.
The company is in the midst of an internal investigation into its workplace
culture, with a report on the findings expected at the end of this month. Mr. Kalanick
has said he needs help with his leadership of the company and is searching for a
chief operating officer to join Uber.
Uber is also facing a lawsuit filed by Waymo, the self-driving car unit spun out
from Google’s parent company, Alphabet, in a high-stakes intellectual property theft
case. Waymo has accused Uber of using stolen trade secrets to develop its
autonomous vehicles. The judge presiding over the case is expected to make a
decision soon on whether Uber must temporarily halt work on its autonomousvehicle research.
Greyball was part of a larger program at Uber known as VTOS — short for
Violation of Terms of Service — which was used in the United States and in countries
including Brazil, South Korea and France. The program began as early as 2014, and
Uber has argued it had legitimate uses, such as concealing the locations of drivers
from competitors or would-be attackers.
But officials are concerned with the program’s use in evading law enforcement
personnel. After using a series of techniques to identify and tag officials, Uber would
turn to the Greyball tool to show a false version of its app to officers who tried to hail
an Uber car using their smartphones.
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8/9/2017
Uber Faces Federal Inquiry Over Use of Greyball Tool to Evade Authorities - The New York Times
Greyball was approved by Uber’s legal team, though some inside the company
had qualms about it.
Uber made a particular effort to deploy the tool in cities where it faced
opposition from local regulators or rival taxi and transportation companies. One of
those cities was Portland. The Times reported that Uber used the Greyball tool there
in late 2014, when the company began service without permission from city
regulators.
After the use of Greyball was revealed, the mayor of Portland, Ted Wheeler, said
in a statement at the time, “I am very concerned that Uber may have purposefully
worked to thwart the city’s job to protect the public.”
In a letter dated April 21 to the City of Portland, which was included in the
audit, Uber said it had not used the Greyball tool in the city after April 2015, when
Portland officials put in place a set of regulations and a pilot program for ride-hailing
companies.
Correction: May 4, 2017
An earlier version of this article misstated when the City of Portland published a
transportation audit. It was published last week, not this week.
Ben Protess contributed reporting from New York and Rebecca R. Ruiz from
Washington.
Follow Mike Isaac on Twitter @MikeIsaac.
A version of this article appears in print on May 5, 2017, on Page B3 of the New York edition with the
headline: Uber’s Use of ‘Greyball’ Tool to Evade Authorities Spurs U.S. Inquiry.
© 2017 The New York Times Company
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