Uber, the popular ride-sharing app, puts users worldwide in touch with everyday drivers looking to make some money. But the City of Portland and the U.S. Justice Department say the company’s “Greyball” software might have crossed a line, singling out regulators and taking them on a different kind of ride.
The Long Road to Ride-Sharing for Uber
Ride-sharing companies like Uber and Lyft have emerged over the past several years as useful tools for people looking for alternatives to driving. Uber drivers can provide mobility to the elderly and the disabled, offer designated drivers when people plan to go out drinking, and relieve parking congestion in big commuter cities like Detroit.
But in the late 2000s, there were considerable objections to this new company model. Taxi drivers’ unions and regulators often opposed Uber coming into their cities. They raised concerns that Uber drivers usually do not have the same commercial drivers’ licenses or liability insurance as other professional drivers. Because of this, many local governments resisted, or even banned the use of the app.
Greyball Software and Driver Safety
Sometimes this resistance turned ugly. In France, India, Kenya, and other places, taxi workers targeted and attacked new Uber drivers, sometimes beating their cars with metal bats.
In response, Uber developed a system called Violation of Terms of Service (VTOS) including the Greyball software. The system allowed the company to screen out fake users and protect their drivers. An Uber manager would draw a digital perimeter, or “geofence” around at-risk areas to warn drivers from accepting fares there. The company would watch for people “eyeballing”, frequently opening and closing the app. They would also track credit cards and social media accounts of suspicious users.
These users are flagged in the system. When they opened the app they would see fictitious “ghost vehicles” that did not have real-world counterparts. Drivers were also warned not accept rides from these users for their protection.
Did Uber Use Greyball to Dodge Regulators?
The City of Portland says that Uber was doing more than just protecting drivers with its software. It is accusing the company of using the software to dodge regulators and operate in the city illegally. Regulatory officials say they were “Greyballed” in ways that frustrated sting operations. The mayor of Portland, Ted Wheeler, issued a statement reported by the New York Times:
“I am very concerned that Uber may have purposefully worked to thwart the city’s job to protect the public.”
Now Portland has gotten the Department of Justice involved. The federal agency has issued a grand jury subpoena to investigate the claims and determine whether Uber’s Greyball software crossed the line into criminal fraud.
Dani K. Liblang of The Liblang Law Firm, P.C., in Birmingham, Michigan is a consumer protection and personal injury attorney. She can help injured ride-share passengers get compensated for their injuries even when regulatory questions exist. Contact The Liblang Law Firm, P.C. today for a free consultation.