Market Watch: Uber's Questionable Practices

In another complication within the company, Uber has recently been exposed for having a secret software called Greyball. It is used to identify and deny services to riders who violated their terms of services, local authorities, and law enforcement within areas where Uber can’t operate legally. This software has been helping to allow Uber drivers evade local government regulations while trying to provide services to its customers in more shadowy areas since 2014. 

Besides upsetting taxi driver unions, one of the reasons why Uber is banned in many cities is UberX. UberX is the cheaper version of Uber, and its background checks are much looser in comparison to the regular Uber service. UberX It allows their drivers to pass the inspection easily. The vehicle, criminal history, and even the driver license can be neglected. For the safety of their local residents, some cities simply banned UberX’s possibly unlicensed and unregistered commercial vehicles operating in their area. Although the legal status of UberX may not be opened in every city, Uber won’t let their business opportunity slip away because some local law denied them.

For locations where Uber is banned, whenever local law enforcement and authorities try to download the Uber app, they will receive a fake version of the Uber app while other residents are using the real one. This situation is known as being “greyballed.” When the grayballed users opened the fake Uber app, they will see no cars available in nearby areas. Thus, the grayballed user might fall under the illusion that there is no Uber cars around when in reality, Uber is operating in the dark. In addition, Uber used Greyball to collect data from the greyballed users, and learn about how they open, use, and to what degree they frequent the app. Uber is continuously looking forward to “innovate” - finding better ways to get their drivers to avoid picking up local law enforcements. It is almost as if the local law enforcements downloaded a keylogger malware in their smart phone. The method of how Uber obtained information as to whether or not someone is a government officer remains questionable legally and ethically. Nevertheless, Uber admitted such software’s existence but deny its extensive usage. The spokesperson of Uber said the following regarding the scandal and the two week usage time of the software: 

“This program 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.”

On March 3, 2017, The New York Times revealed such software existed and has been being used for a long period of time. Greyball was part of the program called VTOS, shorthanded for violation of terms of services. The purpose of its existence is to forbid people who would use the service improperly - anywhere from not passing regulations to assaulting the driver. Grayball was used mostly outside of the US, where it was being approved by Uber’s legal team. According to the report by the Times, four current and former anonymous Uber employees provided the documents of Greyball and VTOS’s existence and usage.

Although this software is protecting Uber drivers in locations with high crime rates, in the meantime it is violating local laws and regulations. No authority would tolerant a banned service operating in the shadow while evading any inspection. In addition, such action could be a violation to the Federal Computer Fraud and Abuse Act. The Department of Justice recently launched a criminal investigation into Uber’s usage of this secretive software during operations while deceiving local regulators.

Uber getting into legal trouble and scandals isn’t news to the public anymore. Besides the conflicts with the local taxi drivers and their unions all around the world, along with the copyright claim lawsuit of automated vehicles from Google, internal conflicts within Uber are on the rise too. This is due to Uber’s consistently vague policy to their contract drivers; it’s hard to tell whether Uber drivers are contract workers or direct employees of Uber. Uber drivers are working long hours like full time employees but only signed contract work agreements with Uber. In addition, the video of Uber CEO Travis Kalanick get caught arguing with an Uber driver over the issue of dropping fares was only released two months ago. That Uber driver was dissatisfied with Travis’s occasion changes in payment policies; this Uber driver’s opinion may represent many of the other Uber drivers as well.

In addition, the usage of Greyball is not the first time Uber is allegedly manipulating software in business practice. Recently, there has been a lawsuit regarding Uber’s manipulation of the fare of their driving services within the official Uber app. The app displays different money amounts to the driver and the passenger. Meanwhile, Uber keeps the differences of the two numbers. This lawsuit was filed by April 3, 2017 in the Central District of the State of California. Uber was being sued for breach of contract, unjust enrichment/restitution, fraud by concealment, unfair competition, and independent contractor misclassification and failure to pay wages.

The idea that anyone with a car is able to be a taxi driver can very convenient for those who need a cab services and is able to create jobs. At the same time, Uber’s questionable business practices are bringing them more than $70 billion worth of lawsuits for avoiding and fighting governmental regulations. It’s issues like Greyball that makes one contemplate whether Uber is the end all of accessible transportation, or just another step in getting there.