Taxi hailing giant Uber's troubles, as a company, are not going to end anytime soon and according to a new report by Bloomberg, the company is under investigation by the Federal Bureau of Investigation for spying on its competitor lyft. The company had apparently used a spyware to monitor drivers belonging to competitors Lyft. The primary objective of the practice was to poach drivers from Lyft.
Uber in trouble again
Uber had been using a spyware named 'Hell' that allowed them to spy on Lyft drivers and that practice is now the subject of an FBI investigations.
The spying program was used by Uber to identify those drivers who drove for Lyft as well as Uber. Once they were identified, the company would, allegedly, try to poach those drivers by offering them certain cash incentives. Needless to say, these are serious violations and it is not surprising that this practice is now being investigated by the FBI.
One of Uber's spokespersons, Matt Kallman, stated that the company will fully co-operate with the FBI. He also pointed out that the program has been discontinued. Bloomberg did reach out to representatives of the FBI for a comment on the developments but they refused to comment.
It is important to point out that Uber is being investigated for other malpractices as well.
One of them is a program known as 'Greyball,' that was used to hoodwink regulators, and the other includes the company's alleged practice of bribing foreign officials, which falls foul of the Foreign Corrupt Practices Act.
No longer in use
Although the program is no longer in use, it went on for two years from 2014 through to 2016.
It was only after a class action suit had been filed by Lyft drivers, that the whole thing came to light. The resignation of the company's head of compliance, Joseph Spiegler, last week is also a telling blow for the company since he had been tasked with ensuring that Uber did not do anything illegal. The slew of corporate governance and regulatory issues that the company had been involved in had eventually led to the ouster of Uber's co-founder and CEO Travis Kalanick last June.
Uber has appointed former Expedia boss Dara Khosrowshah as its new chief executive officer and the company is hoping that he will be able to guide the company through this rather troublesome period. On the other hand, there is widespread fear among investors regarding the direction that the company has taken and it will up to the new CEO to ensure that there is no long lasting investor discomfiture.
