Uber’s usage of Greyball continues to haunt it

While a sweeping investigation by Portland officials has not resulted in any fines and/or penalties, a criminal investigation by the DoJ is still on.

As per officials from the city of Portland, Oregon, a sweeping investigation into Uber Technologies Inc’s conduct revealed that it had used a software tool to intentionally evade 16 government officials whose job it was to regulate the ride-services company

In December 2014, when Uber began operating in Portland it did not have any valid permit. It then created a software application named Greyball which its drivers to use to block regulators from booking rides.

In April 2015, when it was granted approval for operating its services in the city, it stopped using the application.

While Portland has not imposed any fines or penalties on Uber, the city’s transportation officials have recommended that Portland better ramp its enforcement efforts.

“We have ensured that no attempts to evade regulators or deny service to riders” will be allowed in the future, said Portland City Commissioner Dan Saltzman.

Earlier this year in March, Portland city officials had launched an investigation into Uber’s behavior after the New York Times reported the usage of Greyball in areas, including Portland, Paris, Boston, and Las Vegas, where Uber didn’t have regulatory approval.

The investigation also found that Uber used the same strategy in countries such as Australia, South Korea, Italy and China.

Uber designed Greyball such that it would ignore and cancel ride requests from locations that are near enforcement agencies; the same strategy was also adopted for credit cards accounts which were linked to government workers.

“In using Greyball, Uber has sullied its own reputation,” reads the report from the Portland Bureau of Transportation.

Uber’s spokesperson said, the company was “pleased the investigation was closed” and “will continue working in partnership with the City of Portland.”

Following the NYT’s report, Uber has acknowledged the existence of Greyball and has stated it would stop using the technology to target regulators.

Significantly, the U.S. Department of Justice has also opened a criminal investigation into the usage of Greyball, said sources in May 2017.

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Categories: Creativity, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy, Sustainability

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