Uber probed for thwarting regulators

Uber is under investigation by the US Department of Justice over a program it used to deceive regulators who were trying to shut down its ride-hailing service.

The inquiry concerned the company's use of a software tool called Greyball, which it developed partly to aid entrance into new markets where its service  was not permitted.

With the tool, which was essentially a fake version of its app, Uber was able to evade law enforcement agencies that were cracking down on its service.

The New York Times raised questions about the legality of the practices in a report on Greyball in March. After the report, Uber said it would prohibit employees from using the software to thwart regulators (See: After expose, Uber says it has ended 'Greyball' use).

The federal inquiry came to light in a transportation audit conducted by the City of Portland, Oregon, published last week. In the audit, Portland officials  said they had been notified by the US attorney's office for the Northern District of California about the existence of the inquiry. The City of Portland is cooperating with the inquiry.

Reuters reported yesterday that the inquiry was a criminal investigation.

The US attorney's office for the Northern District of California generally conducted criminal investigations, and some of the laws that Uber might have broken could have carried criminal penalties.

With the program, Uber engineers could take over a user's app and send them a map that did not accurately reflect which drivers were in the area.

Uber admitted that Greyball was used partly to track and avoid regulators who might be hailing rides to scrutinise the company's business practices. The company discontinued the practice five days after a 3 March New York Times report exposed the program.

According to commentators, the investigation will add to the troubles the world's most valuable startup was facing. It is already dealing with an internal probe about a sexist work environment and a lawsuit from Waymo over allegedly stolen self-driving car technology.