SAN FRANCISCO — Uber is the subject of a U.S. Department of Justice inquiry over a program that it used to deceive regulators who were trying to shut down its ride-hailing service.
The inquiry concerns Uber’s use of a software tool called Greyball, which the company developed in part to aid entrance into new markets where its service was not permitted. The tool allowed Uber to deploy what was essentially a fake version of its app to evade law enforcement agencies that were cracking down on its service.
The New York Times reported on Greyball in March, raising questions about the legality of the practice. After the report, Uber said it would prohibit employees from using the software to thwart regulators.
The federal inquiry was disclosed in a transportation audit conducted by the city of Portland, Oregon, published last week. In the audit, Portland officials said they had been notified by the U.S. attorney’s office for the Northern District of California about the existence of the inquiry. The city of Portland said it was cooperating with the inquiry.
Reuters reported Thursday that the inquiry was a criminal investigation. The U.S. attorney’s office for the Northern District of California generally conducts criminal investigations, and some of the laws that Uber may have broken carry criminal penalties. A federal inquiry often does not result in any charges being filed.
Press officers for Uber and the U.S. attorney’s office, as well as the city of Portland, declined to comment Thursday.
Uber has been grappling with several scandals. Apart from Greyball, Uber has come under fire for its at times raucous internal culture, sexual harassment claims and the aggressive, no-holds-barred approach to business espoused by Travis Kalanick, Uber’s chief executive.
The company is in the midst of an internal investigation into its workplace culture, with a report on the findings expected at the end of this month. Kalanick has said he needs help with his leadership of the company and is searching for a chief operating officer to join Uber.
Uber is also facing a lawsuit filed by Waymo, the self-driving car unit spun out from Google’s parent company, Alphabet, in a high-stakes intellectual property theft case. Waymo has accused Uber of using stolen trade secrets to develop its autonomous vehicles. The judge presiding over the case is expected to make a decision soon on whether Uber must temporarily halt work on its autonomous-vehicle research.
Greyball was part of a larger program at Uber known as VTOS — short for Violation of Terms of Service — which was used in the United States and in countries including Brazil, South Korea and France. The program began as early as 2014, and Uber has argued it had legitimate uses, such as concealing the locations of drivers from competitors or would-be attackers.
But officials are concerned with the program’s use in evading law enforcement personnel. After using a series of techniques to identify and tag officials, Uber would turn to the Greyball tool to show a false version of its app to officers who tried to hail an Uber car using their smartphones.
Greyball was approved by Uber’s legal team, although some inside the company had qualms about it.
Uber made a particular effort to deploy the tool in cities where it faced opposition from local regulators or rival taxi and transportation companies. One of those cities was Portland. The Times reported that Uber used the Greyball tool there in late 2014, when the company began service without permission from city regulators.
After the use of Greyball was revealed, the mayor of Portland, Ted Wheeler, said in a statement at the time, “I am very concerned that Uber may have purposefully worked to thwart the city’s job to protect the public.”
In a letter dated April 21 to the city of Portland, which was included in the audit, Uber said it had not used the Greyball tool in the city after April 2015, when Portland officials put in place a set of regulations and a pilot program for ride-hailing companies.