SAN FRANCISCO — Federal authorities have launched a criminal inquiry into Uber’s use of its so-called ghost-app program, an official familiar with the matter said.
The official, who is not not authorized to comment publicly, did not elaborate on the scope of the Department of Justice investigation into the company’s program known as Greyball.
The controversial technology allowed Uber engineers to take over a user's app and send them a map that did not accurately reflect which drivers were in the area.
Uber has said that Greyball was developed in order to monitor users who had violated its terms of service and to potentially protect drivers by steering dangerous riders away from them, according to March 8 company blog post in the wake of a March 3 New York Times report that exposed the program.
But the company also admitted that Greyball was used in part to track and avoid regulators who might be hailing rides to scrutinize the company's business practices. The post added that Uber would be "expressly prohibiting its use to target action by local regulators going forward."
Uber declined to comment on news of a DOJ investigation, but provided a letter the company sent to Portland, Ore., officials in March that describes the program and claims Greyball was used there "exceedingly sparingly."
The investigation represents a significant ratcheting up of problems for the world's most valuable startup, which already is dealing with an internal probe about a sexist work environment and a lawsuit from Waymo over allegedly stolen self-driving car technology.
Uber officials received a subpoena from a Northern California grand jury seeking documents that explained how and where Greyball was deployed, one person familiar with the request told Reuters, which would indicate a criminal investigation is underway. That said, a grand jury subpoena does not necessarily indicate wrongdoing or signal that charges are imminent.
Another source told Reuters that the law firm Shearman & Sterling had been retained to conduct an internal investigation into Greyball and its use. A Shearman spokeswoman did not immediately respond to USA TODAY's request for comment.
Uber's use of Greyball was recorded on video in 2014, when a code enforcement inspector in Portland, Ore., tried to hail an Uber as part of a sting operation, according to the Times. Uber had started operating in Portland without permission from the city, and "greyballed" a city official who was hailing a ride.
According to the letter Uber sent to authorities in Portland, Uber had not used Greyball in that city since April 2015 for any reason. "The use of Greyball technology in Portland was limited to 17 individual Uber rider accounts added during a two-week period in December 2014," the letter reads.
The eight-year-old tech startup, which has been valued at $69 billion, has a history of aggressive business tactics against taxi unions, municipal officials and even drivers. Much of that attitude has been laid on the doorstep of co-founder Kalanick, who was caught on a dash cam video berating a driver who complained about low fares.
The company's internal investigation of its workplace environment is due out later this month, while its court battle with Waymo is ongoing. Uber also has been sued by the widow of a former engineer who killed himself after five months at the company. She is citing workplace stress for his suicide.
Contributing: Kevin Johnson