An investigation by the Portland Bureau of Transportation (PBOT) has found Uber Technologies guilty of using a software tool to intentionally evade 16 government officials whose job it was to regulate the San Francisco-based company.
Portland launched its investigation after the New York Times reported that Uber had been engaged in a worldwide program to deceive the authorities in areas where its service had not yet been approved, including China, France, South Korea and several U.S. states.
The Global Ride Hailing Market is forecast to be worth $276 billion by 2025. This growth is being driven by the growing need for personal mobility in wake of rising urbanization and fall in car ownership. Uber are one of the leading players in this market and have been rapidly expanding as they attempt to reshape the auto industry.
The investigation found that Uber did not have the required permits when it entered the Portland market in December 2014. The Greyball software allowed the company to ignore or cancel ride requests from locations near enforcement agencies and from accounts with credit cards believed to belong to government workers.
In total, the report discovered that the company had used Greyball to block 17 rider accounts, 16 of which belonged to government officials, and deny 29 ride requests by city transportation enforcement officers.
The report says the ride hailing company stopped using the software after it received approval in Portland in April 2015.
“In using Greyball, Uber has sullied its own reputation,” the Portland Bureau of Transportation said in its report.
Uber has not been penalised for its actions. However, the PBOT said it was cooperating with a federal inquiry from the Northern District of California which may carry criminal penalties. The U.S. Department of Justice also opened a criminal investigation into Greyball, according to Reuters.
“As regulators, it is our job to ensure these companies [like Uber] play by the rules, keep passengers safe, and act ethically,” Dan Saltzman, Portland city commissioner, said. “Moving forward, we have ensured that no attempts to evade regulators or deny service to riders in violation of city code or law will be allowed in the future.”
Fellow ride-hailing company Lyft was also investigated, but regulators found no evidence they had engaged in similar tactics.
Interestingly, the WSJ recently reported that federal law-enforcement authorities in New York were investigating whether Uber used software to interfere illegally with competitors and track their activities, including main rival Lyft.
Stay up-to-date with the latest trending news stories and industry advances with the Research and Markets blog. Don’t forget to connect with us on LinkedIn and Twitter for the latest blog plus information about new products.