Uber tried defying one government authority too many when it started messing with the police.
In March, the New York Times broke the underlying story regarding the software program designed to defy government investigators and regulators, including police. Uber said it would stop using the program after it received a barrage of negative press. From a more recent New York Times account:
The program, involving a tool called Greyball, uses data collected from the Uber app and other techniques to identify and circumvent officials who were trying to clamp down on the ride-hailing service. Uber used these methods to evade the authorities in cities like Boston, Paris and Las Vegas, and in countries like Australia, China and South Korea.
Greyball was part of a program called VTOS, short for “violation of terms of service,” which Uber created to root out people it thought were using or targeting its service improperly. The program, including Greyball, began as early as 2014 and remains in use, predominantly outside the United States. Greyball was approved by Uber’s legal team.
Uber’s use of Greyball was recorded on video in late 2014, when Erich England, a code enforcement inspector in Portland, Ore., tried to hail an Uber car downtown in a sting operation against the company.
At the time, Uber had just started its ride-hailing service in Portland without seeking permission from the city, which later declared the service illegal. To build a case against the company, officers like Mr. England posed as riders, opening the Uber app to hail a car and watching as miniature vehicles on the screen made their way toward the potential fares.
But unknown to Mr. England and other authorities, some of the digital cars they saw in the app did not represent actual vehicles. And the Uber drivers they were able to hail also quickly canceled. That was because Uber had tagged Mr. England and his colleagues — essentially Greyballing them as city officials — based on data collected from the app and in other ways. The company then served up a fake version of the app, populated with ghost cars, to evade capture.
Uber, in its characteristic self-aggrandizing way, tried to justify its use of the program as a necessary competitive move, to defend itself against evil forces that were manipulating police (listen to the video in the linked New York Times story to hear the spin). Help me.
The criminal investigation is in its early stages. Reuters broke the story. The gloves are off:
The U.S. Department of Justice has begun a criminal investigation into Uber Technologies Inc’s use of a software tool that helped its drivers evade local transportation regulators…
An Uber spokesman and the Justice Department declined to comment. Uber lawyers said in letters to Portland authorities, which Portland made public in a report last week, that the Greyball technology was used ”exceedingly sparingly” in that city, before the service was approved there in 2015.
The nature of any potential federal criminal violation, and the likelihood of anyone being charged, is unclear. The investigation is still in its early stages, the sources said.
Bloomberg news service reported the existence of a federal probe last week, but did not identify it as criminal
Uber received a subpoena from a Northern California grand jury seeking documents concerning how the software tool functioned and where it was deployed…
A subpoena from a grand jury is a formal request for documents or testimony concerning a potential crime.
Reuters intimates that a grand jury has actually been empaneled. Note that confusingly, there are also “grand jury subpoenas” that are issued at earlier stages of investigations. However, a Wall Street Journal source did say a grand jury had been convened: “A federal grand jury recently sent Uber a subpoena requesting records related to the software, this person said.”. This is a big deal.
Here is an overview from Reuters of some of the key issues:
The program was part of a broader Uber system, called Violation of Terms of Service, that analyzed credit card, device identification, location data and other factors to predict whether a request for a ride was legitimate, current and former employees said.
The technology was used partly to prevent fraud and protect drivers from harm, the company blog post said. If a ride request was deemed illegitimate, Uber’s app showed bogus information and the requester would not be picked up, the employees told Reuters.
However, the Greyball technique was also used against suspected local officials who could have been looking to fine drivers, impound cars or otherwise prevent Uber from operating, the employees said.
The system might have gone farther than suggested by Uber’s terms of service for app users. For example, it mined credit card information to see if the owner was affiliated with a credit union used by police and checked social media profiles to assess the likelihood that the person was in law enforcement.
After the Times exposed the program in March, regulators who had been unable to catch Uber in places where it was banned accused the company of obstructing their inquiries
It is also not a good sign that Uber has hired a big name law firm, Shearman & Sterling, to conduct an internal investigation. That says the integrity of management is in doubt. A move like this is almost certain to have come from the board, not the CEO Travis Kalanick.
I guarantee that Uber has a bogus metric to justify its use of the “exceedingly sparingly” claim, which it made in response to a Portland civil lawsuit, like number of hours of misleading information shown relative to total hours available by Uber registered drivers. Marketwatch said Uber stated it used the program 17 times in December 2014 in Portland in a letter to the city. Given Uber’s track record, I wouldn’t trust anything it says outside a formal legal process where it is liable for the accuracy of its information. Not surprisingly, Reuters suggests the numbers are larger:
Transportation officials in Portland investigated and reported last week that Uber had used Greyball to evade 16 Portland Bureau of Transportation officials, denying them dozens of rides, in December 2014…
Let’s hope the Feds keep the hot lights on Uber. Couldn’t happen to a nicer bunch.
And 150 years from now, the feds might actually try pressing charges. Sorry, I have seen this particular screen play before. The tobacco industry, pharmaceuticals, CAPERS, mortgages, credit rating firms… hell, it would be easier to list the corporations that weren’t corrupt. Wall Streets’ business model IS fraud.
While the hat must be tipped to the front line officers who put this together. But we already know the courts will get the run around from here to dooms day. And once their are findings of fraud found, Uber will appeal the results and the whole thing starts over for another 15 years, over and over and over again until they run out of things to appeal. And once the hammer DOES fall? It will be for a poultry hundred thousand dollars. And then yet another round of appeals, delays, and fee reductions (the court never seems to charge interest for some reason). And EVEN THEN, then findings are never recorded to the record. So when they go right on violating the law, the whole thing starts all over again.
The whole thing is a pathetic joke, just another cost of doing business.
I’ve been thinking that morality now seems to be regarded as merely an emergent property of capitalism. That is, if you do something to make money it can’t be wrong. In that way Uber’s heart was in the right place and indeed it will be let off with a wrist slap. But perhaps some will not see this bankrupt philosophy to its logical end.
“emergent property of capitalism” emergent ?????? WTF!
Given the long history of capitalists I can’t believe anyone here could believe that. Perhaps childhood delusions that the official narrative is true? I know that delusion had me for a long time.
Where do you get YOUR morality from?
I am asking rhetorically of course. But Dirk is right, neo-liberalism, at its heart is the philosophy that markets are perfect and by definition can do no wrong, while governments are by definition, corrupted and inefficient and can do no right.
When the government spies on us, even the libertarians freak out, and rightfully so. But when the media companies spy on us, literally recording every step we take, it’s okay because – markets. Hell, its even better than okay because the market will innovate new “solutions” to problems we didn’t even knew we had (And that can always be solved for just twenty easy payments of just $19.95. Operators are standing by.)
For neo-liberalism, morality is an emergent property of free market capitalism. And that is entirely the problem with neo-liberalism.
Ed, as Code Name was implying, I was just generalizing what Lambert often snarcs about with his “because markets” quip. It explains a lot don’t you think?
It worked for the Sacklers, America’s first family of drug peddlers.
Noam Chomsky reports that paint manufacturers knew lead was toxic since the 1920s….but it took them until a Federal suit in 1978 to stop making lead paint. The civil suits following netted a $2 billion judgment against Sherwinn-Williams. The Roberts court recently vacated the judgment.
Best court money can buy!
“And 150 years from now, the feds might actually try pressing charges.”
I boycott UBER. I think all of you should too.
It doesn’t require a government to clean up a corrupt business. The real power is wielded by the customers. When it becomes shameful to be seen in an UBER, or to drive for them, they are toast.
Hasn’the worked that way so far.
For every one of us who boycotts them, there are 100, no probably 1000, enthusiastically using them because (short term) price and (short term) convenience are the only things that matter for most consumers, at least most that I know.
On top of that, there are still many, many people who believe that Uber and the other brave Disrupters are rescuing us from stuffy old job-killing regulations. I work with a young engineer who, when I described the Greyball system to him, only replied that it was a clever use of technology.
“The program was part of a broader Uber system, called Violation of Terms of Service, that analyzed credit card, device identification, location data and other factors to predict whether a request for a ride was legitimate, current and former employees said.”
What vendors are they using for these programs? This can’t just be in house, they don’t have enough information within uber. Who are the vendors? Google? Facebook?
The “social media” moniker being attached to what is very likely Facebook seems to indicate that Uber has superuser access within facebook. They probably pay a lot for this service. How much, and for how much access?
Location histories would be the easiest way to track cops. Who’s selling that info to Uber? Are they also selling it to the cops they are trying to evade? Did the vendor just FUBAR any chain of custody claim it might have ever had?
Questions for the ages….Interesting twists.
Data, you mean? Uber could have made an HTTP request to Google just like the rest of us and scraped the server output and links for info. If a user, for whatever ungodly reason, decides to link their Uber account with their Facebook/Google/Twitter/LinkedIn account instead of using email like grownups, then it is the user themselves who allowed Uber to rummage through their histories. There are services like Spokeo which compile “social” information obtained by scraping into dossiers.
The user. (NPR)
Using only e-mail won’t solve the problem. Google will only be too happy to sell the e-mail info to the highest bidder including location history!
There are numerous 3rd party vendors involved in this, at the very least. It’s the gilded Silicon Valley/ Nat Sec back door. No wait, or warrant required- Just a large payment.
“Data, you mean? Uber could have made an HTTP request to Google just like the rest of us and scraped the server output and links for info.”
No, I mean who are they buying the data from. Your supposition of HTTP queries is a hand wave. Uber needed the ability to look at connections within facebook.
It does fit the narrative of blame the victim well though.
Facebook is a walled garden. One to one, access to a phone might be of some value. One to many, as is the case in where they were looking at who the LE people were “friends” with required facebook cooperation from the inside, and access to other users “privacy controlled” profiles.
Yes, Uber could possibly scape those facts together in other ways. But it would be a lot easier to simply pay facebook for this information.
Uber’s Terms of Service, among other things, allows it to download your contacts. I cannot for the life of me fathom why anyone would agree to that.
It would not be hard to figure out if someone was a cop based on his contacts. He’d have a ton of other cops as contacts, which is not a normal profile.
Assuming you even have the option any more.
Most people keep their employer’s number in their contact list, and probably their union hall’s too (where applicable). Law or code enforcers are thereby trivial to spot.
Apps are a scam. Avoid them and use the open web instead (where applicable).
Apparently drug dealers are now putting Uber emblems on their cars, so it looks like they have a legitimate reason (i.e. passenger) to be driving in a poor or druggy neighborhood where unfamiliar cars would otherwise be considered suspicious. Lol, I manage to not feel sad for Uber.
Saw that very thing the other day. An Uber car outside of a house that, shall we say, doesn’t have the most reputable and law-abiding of residents.
If I see that sort of thing again, I’m dialing the magic number, 911.
” to be driving in a poor or druggy neighborhood where unfamiliar cars would otherwise be considered suspicious”
Wow. Suspicious to be driving?
What’s worse, a poor, or druggy neighborhood?
Druggy neighborhood is say SOHO nyc, while say Inwood might be a poor neighborhood.
Why is anybody surprised?
The UBER swindle mechanics designed it all to deceive investors, riders, drivers, and the public (not to mention cops and local authorities). This is a carefully planned criminal enterprise pure and simple!
Thanks for the post. Interesting.
I agree with Code Name D, above, in that I’m skeptical anything much will happen to hamper Uber’s, uh, business model. Good to have the information, though.
I don’t use either Uber or Lyft. Don’t want them collecting data on me (not that it’s readily available, I’m sure, but why make it easy for these crooks?), plus I disagree with their, uh, “business” model.
This just further reinforces my sense that what Uber “investors” are actually paying for is regulatory arbitrage.
Worth a look for a rather optimistic take on what promises to be enormous social impacts of Uber and more: Clean Disruption – Why Energy & Transportation will be Obsolete by 2030 – Oslo, March 2016
Mark Blyth (Austerity: The History of a Dangerous Idea) concludes that democracy makes a the deflationary bias of gold standard currency unsustainable. My question: Will the lack of a job guarantee be unsustainable too, given the disruptions discussed in the video above?