Uber’s Legal Trouble May Never End

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Summary: Uber is being investigated by the Manhattan Justice Department for possibly using an illegal software to track Lyft drivers.

An investigation into Uber’s use illegal software to track Lyft drivers has been launched by the Justice Department in Manhattan. The software would allow Uber to better understand how to recruit and attract future drivers. Lyft is Uber’s primary ride-hailing competition but has seen far less negative news.

  

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The FBI and U.S. Attorney’s Office in New York’s Southern District opened a probe into if the software breaks any federal laws. The software works by creating a fake customer account. An Uber spokeswoman noted that the company is cooperating with the investigation and is no longer using the software.

This legal problem is just another on the tech company’s growing list. They have been accused of corporate espionage regarding autonomous vehicle technology and another allegation of using software intended to prevent local government efforts to monitor their operations.

The board kicked out co-founder and CEO Travis Kalanick in an attempt to address the problems within the company’s culture. He was replaced with former Expedia CEO Dara Khosrowshahi, who must now deal with all their legal issues. In a letter obtained by Recode, Khosrowshahi told the Expedia employees that he was sorry to leave the position he had held for the past 12 years and “scared” of his new opportunity with Uber. But, he said, “…you have to move out of your comfort zone and develop muscles that you didn’t know you had.”

The software in question this time is known at Uber as “Hell.” A San Francisco Lyft driver filed a federal class-action lawsuit alleging the use of a “spyware” by Uber. The lawsuit claims Uber developed this software, which would pose as a Lyft customer so it could gain access to their computer systems. Uber would learn the location of up to eight Lyft drivers at one time, giving Uber their unique Lyft identification number. Uber could then use that number to track the driver’s location.

Using Uber internal records, they would determine if the driver drove for both companies, giving incentives to those that did drive for Uber as well so that they would primarily work for Uber and “thereby reducing the supply of Lyft drivers, which resulted in increased wait times for Lyft customers and diminished earnings for Lyft drivers.”

Their lawsuit claims this software violated the federal Wiretap Act but Uber claims the suit was dismissed. There is no paperwork for the dismissal on record at the federal court as of Friday. Uber had said the software was “commonly available” to anyone using the Lyft app. Uber lawyers wrote, “The communications were therefore ‘readily available to the general public’ and the Wiretap Act does not apply.”

The Wall Street Journal first reported the story of the new probe into Uber’s software use.

Do you think Uber can survive all the legal inquiries and lawsuits into their company? Tell us your thoughts in the comments below.

To learn more about Uber’s other recent legal troubles, read these articles:

• Former Uber CEO Travis Kalanick Fights Back against Benchmark Lawsuit
• Judge Sends Benchmark’s Lawsuit against Former Uber CEO to Arbitration
• Disability Groups Claim Uber Is Discriminating against Them

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