FBI investigating Uber tracking Lyft activity
San Francisco-based Uber corporation is reportedly under federal investigation by the U.S. attorney for the Southern District of New York, Joon Kim, for illegally tracking the driver activity of one of its largest competitors, Lyft.
“Thanks to a secret software-based effort within Uber called ‘Hell,’ Uber could track how many Lyft drivers were available for new rides and where they were,” reported The Information, a news site that follows the technology industry.
A concurrent class action lawsuit, brought on by a former driver, was recently dismissed by Judge Jacqueline Scott Corley. Although she permits a refile, it is unclear whether the case will proceed. Uber argued that the information was readily accessible and there was no proof of eavesdropping, nor any allegations of injury or monetary loss.
With its “Hell” software, Uber reportedly monitored trips and fares in different locations, and collected data on drivers who worked for both companies so it could incentivize exclusive use of Uber’s platform. The Los Angeles Times reported that the company stopped using the software in 2016.
This incident joins a number of allegations surrounding Uber’s tactics. Another Uber program discovered in March, known as “Greyball,” allegedly enabled it to avoid law enforcement investigators by identifying terms-of-service violators and denying their ride requests.
Other allegations ranging from stealing medical records and Google’s self-driving technology to withholding evidence in court have seen the company plagued with lawsuits, many still unsettled.
Under pressure from board members and investors, former CEO and co-founder Travis Kalanick ultimately resigned in June, and the company’s worth has continued to drop as multiple investors fled, reducing stock prices by 15 percent.
But the company continues to grow. Although Uber maintains a negative net income, losing about $2.8 billion in 2016, ride requests have increased by 150 percent in that time.
And regardless of the unwelcome publicity, the company’s aggressive business strategy seems financially effective.
The company’s new CEO, Dara Khosrowshahi, will have to deal with a host of difficulties and allegations, including sexual harassment and discrimination, most of which began well before he arrived.
A former CEO of Expedia, Khosrowshahi has had little time as yet at Uber, but his résumé made him a natural choice for his new board of directors.
Expedia’s quadrupling of its revenue while he was CEO and his reportedly collected personality have instilled hopes of a virtuous and successful future among Uber’s stockholders.