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Federal investigators probe Uber over ‘Greyball’

The US Department of Justice is investigating Greyball, a software tool used by Uber to show a misleading version of the app to regulators, adding to the company’s woes.

While still preliminary, the investigation could embroil the San Francisco-based transportation company in another legal battle, at a time when Uber is already fighting accusations of patent infringement in court.

Valued at $62.5bn by investors, Uber has been hit by a series of crises over the past three months. Travis Kalanick, chief executive, is trying to hire a chief operating officer to help him stabilise the business.

Controversy over Greyball has been mounting since the existence of the programme, which shows a different version of the app to certain users, was revealed in early March.

Uber said Greyball was sometimes used to mislead regulators in markets where Uber drivers were operating without official permission, and the app showed regulators the wrong locations for cars. Uber said that it was trying to protect drivers from harm, and has subsequently banned employees from using Greyball on regulators’ accounts.

The federal investigation into Greyball was revealed in a report from the city of Portland, which started conducting its own audit of the programme shortly after it was discovered. Uber and the Department of Justice both declined to comment on the probe.

In correspondence with Portland, Uber acknowledged that it applied Greyball to 17 accounts while operating in the city without permission in December 2014. Uber stopped using Greyball in Portland once the city legalised ride-hailing services.

Other cities have also started investigating the use of Greyball, including San Francisco, but none has pressed formal charges.

Uber’s recent troubles, which include allegations of sexual harassment inside the company, the Waymo lawsuit over intellectual property, and an embarrassing video of Mr Kalanick berating a driver, have prompted several senior executives to leave the company.

In the intellectual property lawsuit, a judge is soon expected to decide whether to issue a preliminary injunction that could limit Uber’s self-driving research while the case proceeds.

This week, Uber has been under fire from drivers after a new study found a consistent discrepancy between the upfront fares Uber charges to passengers and the metered fares the company reports to drivers.

Via FT