Uber has undertaken a concerted effort to clean up its corporate act, but holdovers from its more aggressive era continue getting the ride-hailing firm into trouble. Currently, the Federal Bureau of Investigation is checking into Uber Technologies Inc. to see if it had used software to illegally interfere with its competition from 2014 to 2016.
The program in question, which Uber calls “Hell,” was the focus of an April lawsuit where a former Lyft driver asked for $5 million in damages. By creating dummy accounts, Hell is supposedly able to track the areas where its rivals are doing business and better-compete by adjusting pricing or offering discounts to their customers. It’s also a way to see if Uber employees are double dipping by simultaneously working for Lyft.
It’s not the first time the company has been cited for playing on the fringes of legality. In addition to a high-profile court case against Alphabet’s Waymo over trade secrets, Uber has also been accused of testing self-driving vehicles without state approval, and using its “Greyball” software to hide from police and public officials.
With Hell, things are equally murky. While obviously shady, it may not be illegal. Of course, this is dependent upon the what the FBI probe digs up. But at least one federal judge has dismissed the claims against it already — on the grounds that the information Uber was compiling and using to make business decisions was readily accessible by the general public.
In the aforementioned lawsuit with a former Lyft driver, Uber was being sued for damages for alleged unlawful invasion of privacy and interception of electronic communications and images in violation of the Federal Wiretap Act as amended by the Electronic Communications Privacy Act, the California Invasion of Privacy Act, and common law damages for invasion of privacy. But Jacqueline Scott Corley, a federal magistrate judge for the U.S. District Court of Northern California, granted Uber’s motion to dismiss the complaint with leave to amend.
She said the plaintiff had not showed sufficient proof that Uber had broken the law or intercepted confidential communications. The FBI investigation is likely following up to ensure that is the case, but it has yet to issue an official statement on the subject.