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Uber used fake app to confuse regulators and rivals

Uber on Friday confirmed the existence of a controversial programme that used a fake version of its app to confuse unwitting regulators and competitors trying to order cars.

The secret weapon — codenamed Greyball — has been used during the ride-hailing company’s battles with regulatory authorities and rivals around the world over several years.

It operates by displaying car icons in random locations and automatically cancelling rides requested by ‘passengers’ believed to be regulatory officials or competitors.

News of Greyball’s existence is the latest blow to Uber after a series of mis-steps has shaken the company over the past two weeks. The crises include allegations of sexual harassment from employees, a lawsuit from Google, as well as a video that showed Uber’s chief executive berating a driver.

Uber said on Friday that it believed Greyball was fully legal. “This programme denies ride requests to users who are violating our terms of service — 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,” the company said in a statement on Friday after the programme was reported by the New York Times.

The company’s terms of service maintain that passengers must present accurate information in their account, and can use Uber only for personal, non-commercial use.

To make Greyball effective, Uber employees researched police officers, local regulators and rivals in each new market, and added them to the Greyball list. The programme began in 2014, and has mostly been phased out in the US where Uber has made peace with regulators in most of its key markets.

This programme denies ride requests to users who are violating our terms of service . . .

However, the revelation sparked concern in several US states and could add a fresh strain to the relationship between Uber and local regulators. In Portland, Oregon, where Uber has successfully used Greyball to dodge authorities, a spokesman for the mayor’s office said it was “very disturbing” and had caused “shock and disappointment” among city officials.

Spokesman Michael Cox said the city was gathering information from other US cities as it weighed its options.

A spokesperson for Massachusetts attorney-general Maura Healey said her office was concerned, and was looking into the matter.

Uber’s method of expanding into new markets is typically to launch first and ask permission later, an approach that has often put it in conflict with regulators who say the company needs to register with transportation authorities.

In Uber’s home market in the US many of these fights with regulators have been settled, but the company is still grappling with regulatory crackdowns in several newer markets.

On Tuesday the publication of a video of Uber chief executive Travis Kalanick berating a driver prompted Mr Kalanick to apologise and say that he needed to “grow up”.

The company has also lost two senior managers over the past week. Amit Singhal, senior vice-president of engineering, was asked to resign on Monday. Ed Baker, a vice-president who drove much of Uber’s growth in the past three years, resigned on Friday.

Additional reporting by Kara Scannell.

Via FT