While the likelihood of Uber CEO Travis Kalanick doing the perp walk in cuffs still seems pretty remote, the latest scandalous development with the rideshare company we love to hate puts Uber squarely in the hottest water it’s been in yet. Reuters broke the news Thursday night that the U.S. Department of Justice has opened a criminal probe into Uber’s use of Greyball technology that helped them allegedly deceive and evade local authorities in cities like Boston and Portland when Uber was not yet approved to operate.
We first learned of Greyball back in March, thanks to the New York Times expose How Uber Deceives the Authorities Worldwide. Greyball is not to be confused with Uber’s also sketchy top-secret program nicknamed “Hell” that created fake Lyft accounts to monitor the whereabouts of Lyft drivers. (Protip: If you’re going to create software programs that blatantly violate laws, give them innocuous-sounding names like “InfoPoint” or “MapRabbit”. It might arouse less suspicion!)
Bloomberg reported last week that the Justice Department was probing Uber over its internal use of Greyball, but did not know the investigation was criminal. But Reuters found that a grand jury was demanding documents — a strong indication of a criminal investigation — and confirmed with a second source that the probe is indeed criminal in nature.
“Uber received a subpoena from a Northern California grand jury seeking documents concerning how the software tool functioned and where it was deployed,” Reuters reports. “That indicates a criminal investigation is underway.”
“The nature of any potential federal criminal violation, and the likelihood of anyone being charged, is unclear,” note authors Dan Levine and Joseph Menn. “The investigation is still in its early stages.”
In the case of Greyball, authorities and local regulators in cities where Uber had not yet received permission to operate conducted sting operations to see if Uber drivers would pick them up anyway. Wary of this oversight, Uber used in-app data, scraped ride hailers’ social media profiles, and evaluated their credit card information (to see, say, whether the account holder was with a police credit union) to identify whether the ride hailer was involved with law enforcement or city regulation.
If the ride hailer met this criteria, they were shown no available cars or ghost cars that did not exist. In the lingo of Uber, the rider was “greyballed” — which given Uber’s corporate culture, is almost certainly meant as a double-entendre.
Uber admits using the Greyball technology since 2014 but , but their attorneys claimed they used it “exceedingly sparingly” in letters made public last week. Uber stopped Greyballing in March after the Times expose was published.
How much trouble this causes for Uber and Travis Kalanick remains to be seen, but the Uber CEO canceled his live onstage interview with Recode’s Kara Swisher scheduled for later this month because of this accumulation of scandals. Now that he may be under criminal investigation by the feds, Kalanick might wish he hadn’t stepped down from Trump’s advisory council because he could probably use some shady friends in high places right about now.
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