Is Greyball Really Blackball? Uber Has a Private Tool That Blocks Government Officials and Other Riders

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Posted in: Business Law

Uber, the popular company that has pioneered a new model of ride hailing and disrupted the taxi market, has gotten into hot water again—this time with a new internal tool it has called “Greyball.” The company states that it developed this application in part as an internal safeguard to prevent riders who might be violent or abusive towards drivers from using the service. Recent reporting from The New York Times, however, alleges that Greyball was used to also evade law enforcement—by detecting them and preventing them from riding with Uber cars.

In this column, I will examine the various purported uses of Greyball and some of the larger implications of a company such as Uber being able to decide who gets to ride based on their own internal algorithms and tactics. When companies have larger power over integral services, such as access to transportation, the fact that they may use their own technology to decide whether and how we might ride without our knowledge raises concerns about essential fairness in the marketplace.

How Greyball Was Reportedly Used to Blackball Government Inspectors

Over the past few years, Uber has reportedly used a proprietary program called “Greyball.” According to The New York Times, the program was used to single out government inspectors responsible for enforcing local laws and restrictions that might impact the ridesharing company. Some of these officials might, for example, hail an Uber to conduct a “sting” operation or inspection, possibly based on a tip. So, Uber set out to thwart them. Uber launched Greyball as early as 2014 and deployed the program in cities like Paris, Boston, and Las Vegas, and countries such as Australia, China, South Korea, and Italy.

Uber has responded that Greyball is part of a larger “violation of terms of service” program, and that it was created, in part, to protect Uber drivers from incurring abuse at the hands of disgruntled taxi drivers who are losing business. Greyball “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,” an Uber spokeswoman wrote in an email. Further, in a recent blog post, Uber also reported that Greyball has “been used for many purposes, for example: the testing of new features by employees; marketing promotions; fraud prevention; to protect our partners from physical harm; and to deter riders using the app in violation of our terms of service.”

While it may have multiple legitimate uses, Grebyball has been used to evade government inspectors. Greyball reportedly has been used more frequently when the company first entered a market and thus subject to little or no regulation. The company does not require drivers to be commercially licensed, so as local officials tried to gather details on Uber drivers via stings, the company would “Greyball” them. This meant denying certain users (including government officials) access to the service—apparently through fraudulent and deceptive means.

How Did Greyball Work?

Uber would use Greyball to identify people it categorized as law enforcement officials and tagged them with a special code. They identified officials using various methods. One method was to monitor a digital perimeter around authorities’ offices and then to see which people frequently opened and closed the app within those borders— potentially singling them out to be Greyballed. Uber also examined customers’ credit card information to see if their cards were government issued.

And there’s more. Uber used its own tools, along with old fashioned sleuthing, to identify customers it deemed should be barred from its service. For example, Uber looked at users’ phone numbers. Government officials engaged in sting operations would, at times, purchase disposable cell phones to use when hailing rides. To thwart these operations, Uber would send employees to local electronic stores to write down the device numbers of various disposable cell phones. Uber employees also looked for information about users on social media to determine whether they should be Greyballed.

If a Greyballed user tried to order a ride on the Uber app, employees would serve up a fake version of the app, either showing no cars available or showing available cars in the wrong location. If a driver picked up a “Greyballed” user, Uber might call and instruct the driver to end the ride. What if a person was Greyballed by mistake? She would never know, because Greyball was not public. No one sent a customer an email or text saying that they were being denied service. So, if you were banned or denied service, you had no way of vindicating yourself if there was indeed an error.

Uber has noted that it will no longer use Greyball to thwart local regulators. “We have started a review of the different ways this technology has been used to date,” Joe Sullivan, Uber’s chief security officer, wrote in a blog post. “In addition, we are expressly prohibiting its use to target action by local regulators going forward.”

Is Greyball Legal and Should It Be?

Uber has come under fire in the past over allegations that it has invaded users’ privacy by using creepy tools. For example, Uber’s “God View,” a tool that let Uber personnel spy on people’s physical locations. Uber employees reportedly used it to entertain friends by showing them the locations of celebrities, tracking a journalist, and spying on ex romantic partners. Uber eventually settled legal claims tied to God View with the New York State Attorney General, paying a paltry $20,000 fine but agreeing to overhaul its privacy practices.

Uber is one again flexing its muscle. Just as God View allowed it to spy on anyone it wished, Greyball allowed it to deny service to classes of riders it deemed disruptive. This may or may not get the company into legal hot water according to the The Times. Greyball could, for example, amount to intentional obstruction of justice, depending on how the program impacted local law enforcement.

Of course, the Federal Trade Commission, states’ attorneys general, and municipal attorneys should inquire further to figure out how Greyball was used in practice and who ended up being denied rides as a result. In Portland, Oregon, officials have openly called for an investigation into whether Uber used the tool to obstruct enforcement of local regulations

The company has not denied using Greyball to try and circumvent government inspectors. Rather it said it “rarely” used Greyball to evade law enforcement. Instead, the application’s primary use according to a spokesperson, was to try and avoid competitors and to keep its drivers safe in places where they have faced violence and threats to their safety.

For critics though, Greyball, like God View, is an example of a repugnant business practice. Taxis are regulated as common carriers and have to serve all comers. Greyball and God View illustrate some of the new problems of the unregulated “sharing” economy. Uber is an unregulated ride hailing business that has the power to invisibly exclude certain people, or classes of people, based on its own prerogatives and technology.

Government regulators who monitor consumer protection need to ask more questions to determine what Uber did, and to what extent this raises larger concerns of public policy—from redlining or excluding customers, to evading law enforcement. And the fact that Uber used may have misled Greyballed customers by showing them a fake site on their phone with inaccurate information about car availability may amount to a fraudulent and deceptive practice. Companies with such market power need to be scrutinized further in order to understand how they are using their market power, and whether they are using it in a way that is fair to competitors and consumers alike.

Uber’s terms of service state that the company can change its terms or deny service at any time and for any reason. It may believe that this gives it the right to use tools like Greyball. But to deny us service without telling us up front that we are being denied service is not a sound business practice, and certainly serving up a fake application page is at best misleading. Greyballing seems to be more like blackballing customers, and one may never know how they got on the list.