Uber is in hot water with the FBI right now over the program “Hell” which targets its rival, Lyft. The Uber vs. Lyft rivalry has gone up to the next level as both ridesharing giants try to gain more information about the other. This is yet another challenge facing Uber’s new chief executive, Dara Khosrowshahi. The FBI is now probing Uber for possible illegal acts to target its rival Lyft as reported by Market Watch.
— Philip C. Mead (@PCMead) September 10, 2017
Uber vs. Lyft: Has Uber Crossed the Line?
Federal law-enforcement authorities in New York are investigating whether Uber Technologies Inc. used software to interfere illegally with its competitors, according to people familiar with the investigation, adding to legal pressures facing the embattled ride-hailing company and its new chief executive.
The FBI’s New York office, together with the Manhattan U.S. Attorney’s office, is investigating Uber Technologies Inc. They are trying to determine if Uber has violated the law by utilizing a defunct internal app called “Hell” to track down the location of Lyft drivers, which in turn interferes with Lyft’s operations.
Uber Faces Investigation Over Illegal Software Programs
Uber never publicly discussed the features of this internal app, but some people who are familiar with it spilled out details. “Hell” creates fake customer accounts for Lyft tricking its system into thinking that riders were booking rides in certain locations.
As a result, Uber discovers the location of the Lyft drivers and the fare offered to riders for various routes. Uber also uses the app to find out which drivers are working for both ridesharing companies. They then used the information to find out which drivers they could target to drop Lyft through cash incentives.
Uber is facing more investigations aside from this one. The authorities in Portland confirmed that Uber is facing criminal investigation from the Department of Justice for another program called “Greyball”.
This software was used to evade regulators in several locations. It tricked regulators into seeing drivers in different locations by giving them a fake view of the app. This also allowed Uber drivers to avoid the traffic regulators in locations they were not allowed to operate in.
Uber’s New Chief Executive Faces Many Challenges Early On
Michael Gonzales, a former Lyft driver, filed a lawsuit last April for Uber’s violation of privacy through the Hell app. The District Court Judge in California dismissed this case, but this has not stopped the FBI from investigating further. An Uber employee commented that the company is cooperating with the investigation. He further notes that the Hell app has already been put to a halt since last year.
The Hell and Greyball apps are among the string of problems Uber’s new CEO, Dara Khosrowshahi needs to face. Filling up vacant positions and changes with Uber’s board members is another thing. There’s also the company culture issue brought about by a blog post from the company’s former engineer. That is already a lot on the new CEO’s plate considering he has just taken on the job this September.
For more information on FBI’s probe on Uber vs. Lyft, check out this video from The Apptrepreneur:
How do you feel about the issues Uber is facing? Let us know in the comments!