Uber’s ‘Greyball’ Draws Ire for Blocking Government Stings

(Bloomberg) -- An Uber Technologies Inc. program used to counteract government officials attempting to conduct “sting” operations is drawing scrutiny amid a flurry of scandals plaguing the ride-hailing company.

Uber said the effort is meant to enforce violations of its terms of service agreement that customers accept when they sign up to use the app. The company said its prevention program, known as Violation of Terms of Service or Greyball, can be used to block officials.

“This program denies ride requests to fraudulent 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,” Uber said in an emailed statement.

The tool allows the San Francisco-based company to show enforcement officers worldwide a fake version of its application in an effort to make it more difficult for authorities to apprehend potentially lawbreaking Uber drivers, according to the New York Times, which reported on Greyball earlier Friday.

Uber has been a near-constant target of regulatory scrutiny since its inception in 2009. The Greyball program has been in place for years. Bloomberg Businessweek reported in 2015 on Uber's contentious battle with officials in Portland, including that the company turned off the accounts of city staff during a sting operation.

However, Uber's every move is under a microscope now that it's grown into a behemoth valued at $69 billion. In the last few months, the scandals have piled up. The company pulled a small fleet of self-driving cars off San Francisco roads in December after regulators said it failed to apply for an autonomous driving license.

This year, it's facing calls from customers to #DeleteUber, sexual harassment allegations, criticism from investors over the company's response, reports of a toxic corporate culture, a high-profile lawsuit from Alphabet Inc., the abrupt departure of a new senior executive over an undisclosed harassment claim from his previous job at Google and a tense argument Uber's chief executive officer had with a driver that was caught on tape and published by Bloomberg.

Uber said Friday that Ed Baker, vice president of product and growth, resigned and will be replaced by Daniel Graf as acting head of that department, reporting to the CEO. Recode reported that an employee told a board member that Baker was “making out” with a colleague at a company party. The former attorney general Eric Holder is helping investigate HR issues at Uber.

With controversy mounting, Uber may be ready to take a more deferential tone with regulators. The company said Thursday it will play by the rules in California and fill out the paperwork for an autonomous vehicle license.

To contact the reporter on this story: Eric Newcomer in San Francisco at enewcomer@bloomberg.net.

To contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Andrew Pollack