The US Department of Justice is investigating whether Uber Technologies Inc illegally used software to track drivers for Lyft Inc, its main ride-hailing competitor, to gain an advantage in attracting and recruiting drivers, according to two people familiar with the probe.
The US FBI and the US Attorney’s Office for the Southern District of New York want to know if use of the software, which created fake customer accounts, broke any federal laws, said the people, who did not want to be identified because they were not authorized to discuss the case publicly.
An Uber spokeswoman on Friday said it was cooperating in the probe and that use of the software has been discontinued.
The US Attorney’s Office would not comment on the case.
The investigation adds to mounting legal problems for Uber, including allegations of corporate espionage involving autonomous vehicle technology and at least one other federal investigation into use of software to thwart local government efforts to monitor its operations.
Earlier this year, Uber’s board ousted cofounder and CEO Travis Kalanick in a move to fix cultural problems within the company.
Last month it replaced him with former Expedia Inc CEO Dara Khosrowshahi, who has inherited the legal troubles.
The latest probe apparently centers on software known inside Uber as “Hell.”
A federal class-action lawsuit filed by a Lyft driver in San Francisco alleges that Uber developed the “spyware” that allowed it to pose as Lyft customers and gain access to its computer systems. The software let Uber access the location of up to eight Lyft drivers at one time and get their unique Lyft identification number. Uber then used that number to track the drivers’ locations, the lawsuit says.
Uber then matched the Lyft drivers’ identities with Uber internal records to find drivers working for both services, and gave those drivers incentives to work mainly for Uber, “thereby reducing the supply of Lyft drivers, which resulted in increased wait times for Lyft customers and diminished earnings for Lyft drivers,” the lawsuit says.
The lawsuit, which Uber said was recently dismissed, alleged that the practice violated the Omnibus Crime Control and Safe Streets Act of 1968, commonly known as the Wiretap Act.
No dismissal paperwork is listed in federal court records, and attorneys for the plaintiff, Michael Gonzales, could not be reached on Friday.
Uber attorneys, in a legal response to the lawsuit, said that Gonzales is alleging only that Uber used “commonly available software” to collect data that would be accessible to anyone using the Lyft app.
“The communications were therefore ‘readily available to the general public’ and the Wiretap Act does not apply,” the Uber lawyers wrote.
News of the investigation was reported earlier on Friday by the Wall Street Journal.
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