Uber faces US scrutiny over program to track competitors

FBI agents are investigating a program that allegedly allowed Uber to spy on Lyft drivers. Photo / AP

Uber Technologies is under investigation by federal authorities in New York for its alleged use of a spyware program designed to undermine competition for its digital ride-hailing service, according to people familiar with the matter.

In another front to mounting legal pressure on the company, federal prosecutors and FBI agents in Manhattan have been investigating a program nicknamed "Hell" at Uber that allegedly allowed the company to spy on drivers from competing service Lyft, according to the people.

The program was aid to identify drivers who worked for both companies and targeted them with cash incentives to shift their allegiance to Uber. The program was allegedly used from 2014 to 2016, the people said.

US authorities are already investigating the company on two other fronts: another program nicknamed "Greyball" that was allegedly used to deceive regulators about its operations; and possible violations of the Foreign Corrupt Practices Act, which bans payments of bribes to foreign officials.

The Greyball investigation is being overseen by federal prosecutors in San Francisco, while the foreign payment case is being handled out of Justice Department headquarters in Washington D.C.

Matt Kallman, a spokesman for Uber, said the company is cooperating with the investigation, and the Hell program is no longer being used.

Representatives for the FBI and Acting US Attorney Joon Kim in Manhattan declined to comment on the probe.

Lyft drivers filed a class-action lawsuit against Uber over the Hell program in San Francisco federal court in April.

A judge granted Uber's request to dismiss the case last month, but allowed it to be revised and refiled. News of the New York investigation into Uber's practices was reported earlier by The Wall Street Journal.

Closely-held Uber has been beset by legal and regulatory scrutiny across a range of its practices, contributing to the pressure that ultimately resulted in the resignation of co-founder and former Chief Executive Officer Travis Kalanick in June. Major early-stage investors in Uber rebelled against Kalanick's leadership after a string of controversies, including its treatment of female employees and drivers.

Uber hired Dara Khosrowshahi, who was chief executive of travel website Expedia, to take over the helm of the ride-sharing service beginning this week. Khosrowshahi has said he plans to draft a new set of core values for the company and hopes to clean up its troubles to ready it for a public offering, possibly in 2019.