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Uber under criminal probe for its software "Greyball"

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【Summary】Two sources told Reuters today that the US Department of Justice has begun a criminal investigation into Uber Technologies on its software tool. And that tool is used by Uber drivers to avoid transportation regulators.

Original Claire    May 05, 2017 4:34 PM PT
Uber under criminal probe for its software

Bad news just keeps coming for Uber. This time, Uber is facing another serious investigation. Two sources told Reuters today that the US Department of Justice has begun a criminal investigation into Uber Technologies on its software tool "Greyball", which was used by Uber drivers to avoid transportation regulators.

The software "Greyball", was revealed by New York Times in March. The program can help Uber drivers hide their cars from regulators in cities where Uber has not received approval to operate, such as in Portland, Oregon.

After the discovery, Uber quickly halted the program and claimed the software was only created to check ride requests, prevent fraud, and safeguard drivers.

"Whether that's people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings' meant to entrap drivers."Uber said in a statement in March.

Meanwhile, transportation officials in Portland investigated and reported last week that Uber had used Greyball to avoid sixteen Portland transportation officials who were trying to use the app by denying them dozens of rides back in December 2014, before Uber was granted permission to operate there. The city said it found no evidence that the behaviour was repeated when Uber re-entered the market in April of 2015.

At the time, Uber lawyers said in letters to Portland authorities, that its Greyball technology was used "exceedingly sparingly" in that city, before the service was approved in 2015. It acknowledged that it used the Greyball technology in December 2014, while it was operating without approval, because it was "deeply concerned that its driver-partners would be penalized financially".

Currently, both Uber and the Justice Department declined to comment on the probe issue. The insider that Reuters interviewed said the investigation is still in its early stages, and the nature of any federal violation or any individual being charged remains unclear.

The criminal probe is another reputation damaging incident the company is facing, including Waymo's lawsuit, sexual harassment scandals, and other crisis. The company backed by venture capital is now valued at $68 billion, and famous for being aggressive in expanding businesses and challenging the norm. Whether or not Uber can clean up the mess it's in is anyone's guess.

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