Uber has been wielding a secret weapon to thwart authorities which have been trying to curtail or shut down its ride-hailing service in cities around the world.
The programme included a feature nicknamed "Greyball" that identified regulators who were posing as riders while trying to collect evidence that Uber's service was breaking local laws governing taxis.
To stymie those efforts, Uber served up a fake version of its app to make it appear the undercover regulators were summoning a car, only to have the ride cancelled. The San Francisco company mined the data it collects through its real app to pinpoint the undercover agents.
The New York Times revealed Greyball's existence based on information provided by four current and former Uber employees who were not named.
Uber acknowledged it has used Greyball to counter regulators working with the company's opponents to entrap its drivers.
Greyball is part of a broader programme called VTOS, shorthand for "violations of terms of service," that Uber says it developed to protect its service.
"This programme denies ride requests to fraudulent users who are violating our terms of service, whether that's people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret 'stings' meant to entrap drivers," Uber said.
Although Uber is becoming more widely accepted, the company says it still uses Greyball as a tool in some cities that it declined to identify.
The Times reported that Uber has targeted regulators in Boston, Paris and Las Vegas, among other cities, as well as a litany of countries that include Australia, China, Italy and South Korea.
The cat-and-mouse game with regulators is the latest example of the aggressive tactics that Uber has adopted while upending the heavily regulated taxi industry. In doing so, Uber has built a rapidly growing company valued at more than $60 billion by its investors that is frequently accused of bending the rules.
Among other things, the company has faced lawsuits for classifying its drivers as independent contractors to save money and allegedly stealing the technology for a fleet of autonomous cars that it is testing.
Data collected about agents of regulatory authorities was used by the software to "Greyball" them, or mark them as city officials, according to the Times.
Greyballed officials trying to use Uber would have rides cancelled and be shown fake versions of the app, complete with maps showing icons of ghost cars appearing to be on the move, the report said.
Tactics used included identifying locations of government offices and then making them off-limits with "geo-fences" erected in mapping software, according to the Times.
Ways of figuring out which users might be regulators or police included checking whether credit cards used for accounts were linked to governments or police credit unions, the report said.
"Uber clearly lost its moral compass if it ever had one," entrepreneur and journalist John Battelle said in a Twitter post referring to the Greyball news.
ADDING TO UBER WOES
In the past two weeks, a former female engineer alleged Uber routinely ignores claims of sexual harassment and a video surfaced of CEO Travis Kalanick profanely berating a driver who confronted him about steep cuts in its rates for a premium version of its service.
Kalanick this week apologised, acknowledging that "I must fundamentally change as a leader and grow up," after a video showed him verbally abusing a driver for the service.
The incident, which circulated on social media, was another hit for the image of the global ride-sharing giant, which faces accusations of sexual harassment and a lawsuit contending it misappropriated Google's self-driving car technology.
In the message to employees later, Kalanick wrote: "To say that I am ashamed is an extreme understatement."
Uber is one of the largest investor-backed start-ups with a valuation estimated at US$68 billion ($97b), and has operations in dozens of countries and hundreds of cities, even as it battles regulators and an established taxi industry.
Kalanick also faced criticism for agreeing to be part of a business advisory panel for President Donald Trump, but then quit the panel amid a campaign by Trump opponents to delete the Uber application.
Uber's rise also has raised tensions in cities that have sometimes gone to extreme measures to crack down on a service that they contended was operating without the proper permits. In Las Vegas, local taxi regulators confronted an Uber driver while wearing ski masks.
In Florida, Hillsborough regulators co-ordinated with taxi and limousine companies on an undercover operation that lured out Uber drivers so they could be assessed US$700 fines.
- AP, AFP