Federal agents probe Uber’s use of fake app to stymie inspectors

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, Oreg., 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 inquiry. 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, the U.S. attorney’s office and the city of Portland declined to comment.

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 month’s end. Kalanick has said he needs help with his leadership of Uber 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 an intellectual property theft case.