Here's A Tip: If You're Desiging Special Apps To Hide From Regulators, You're Going To Get In Trouble
from the bad-idea dept
Crisis management must be a full-time job at Uber. I’ve argued in the past that some of the attacks on the company are greatly exaggerated, but it keeps running into crisis after crisis — many of them avoidable. The latest is a big scoop in the NY Times about how Uber has a special program called Greyball (a play on “blackball,” get it?) that helped it determine if regulators were trying to get rides and then avoid sending a car. Here are the basics from the article by Mike Isaac:
One technique involved drawing a digital perimeter, or ?geofence,? around the government offices on a digital map of a city that Uber was monitoring. The company watched which people were frequently opening and closing the app ? a process known internally as eyeballing ? near such locations as evidence that the users might be associated with city agencies.
Other techniques included looking at a user?s credit card information and determining whether the card was tied directly to an institution like a police credit union.
Enforcement officials involved in large-scale sting operations meant to catch Uber drivers would sometimes buy dozens of cellphones to create different accounts. To circumvent that tactic, Uber employees would go local electronics stores to look up device numbers of the cheapest mobile phones for sale, which were often the ones bought by city officials working with budgets that were not sizable.
In response, Uber has claimed that the program was designed to greylist “terms of service violators”, but if that’s the case it can just kick them off the service and tell them they violated the ToS. From the report, it seems clear that even if the program was used for ToS violators, it was also used against regulators.
I’ve certainly been vocal about the fact that I think city and state regulations limiting Uber/Lyft and the like are generally bad ideas. What may have started out as a good idea to prevent cabbies taking advantage of riders has turned into quite a corrupt system used to limit competition and artificially inflate prices. I think that the idea behind Uber and Lyft and similar services is super powerful. But, that doesn’t mean the company should get a pass for this kind of stuff.
Directly building an app to avoid regulators just looks really, really shady, and it’s going to come back to haunt you (just ask Zenefits or Volkswagen). And while the article claims that the tool might be a CFAA violation, I don’t see how that’s possible, unless it involved even more nefarious activities under the hood (none of what’s revealed in the article would seem to qualify as a CFAA violation, even under the really stretched interpretations of the CFAA that we’ve seen).
But there still are some other questions. At least in the EU, some are already asking if the use of the tool violates the E-Commerce Directive or Data Protection rules.
The bigger question, honestly, is why do this kind of stuff? I’ll never understand why companies feel the need to take the shadiest route possible, when they could have just gone with the upfront path of explaining why what they’re doing is so useful and powerful, and fighting for it, rather than trying to play silly games. Yes, you can make arguments about how they’re trying to grow rapidly, and yes, (as we’ve discussed) these local regulators are often a nuisance for bad reasons. But this kind of stuff is clearly going to bounce back and create problems later on. Just fight these fights head on, without playing shady games that undermine basically everything else about your business.