Feds Making A Literal Federal Case Out Of Uber’s Behavior

Proteus's picture
Rank: Gorilla | banana points 699

Once again, Uber is in the news. This time it's pissed off not only majors of cities, taxi drivers, countries, employees, but now it's the federal government. As quoted by the article;

An inquiry by the United States Department of Justice into Uber's use of a program to deceive some regulators has expanded.
The ride-hailing company has been under scrutiny from the Justice Department over a tool called Greyball, which The New York Times reported on in March. The Greyball tool allowed Uber to deploy what was essentially a fake version of its app to evade law enforcement agencies that were trying to clamp down on its service in cities including Portland, Ore., Boston and Las Vegas.

Furthermore;

Portland was also moving ahead with subpoenaing Uber on Greyball, an official there said on Friday, affirming that the federal action was a criminal investigation.

The inquiry has also just announced that Philadelphia has joined in on the action against Uber.

Questions:
1. Has Uber finally pissed off enough people, that it might actually have dug it's own grave?
2. Could this give Uber's rivals such as Lyft the upper hand in public/investor appeal?

Comments (27)

May 8, 2017

Uber is literally the pimp of low-income taxi drivers all around the world.
The world was fine without it.

No wonder Uber is banned in lots of countries, including all of Germany's biggest cities.
(try getting one in Berlin. Good luck.)

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May 9, 2017

i've seldom used it in the US, but was huge to have in buenos aires and so far in Mexico.

problems alleviated: drivers taking the wrong route or getting lost as most didn't use gps, ( whether on purpose or not), safety, timeliness, ease of ordering a ride, etc etc. in puerto vallarta i had to negotiate the price and hate having to do that, waste of time

95% of my cab rides were fine but i never choose a cab over uber unless i have to.

long live uber

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May 10, 2017

Uber rocks for travel in developing countries. But I would prefer a London cab over an Uber in London. I would prefer the Uber Chopper in Dubai over all else.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

May 8, 2017

Eh, the yuppies in Williamsburg Brooklyn still think they are the taxi equivalent to "doctor's without borders", I have to tip my hat to their marketing team for pushing the "sharing economy" narrative.

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Best Response
May 9, 2017

What possible jurisdiction could the federal government have to investigate Uber evading local laws?

Uber is a heroic company, doing battle against entrenched crony capitalists (corporatists) and bureaucrats the world over. Through force of will Uber has bulldozed through entrenched interests that no one thought they could defeat. Lyft, on the other hand, has a more sustainable business model--it's called letting Uber do the dirty work and take all the publicity hit while Lyft receives the benefits of Uber's heroics.

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May 9, 2017

Uber is heroic in burning investors cash and most likely won't survive. It's driverless technology is thousand years behind Google.

May 9, 2017
<span itemprop=name>5 million</span>:

Uber is heroic in burning investors cash and most likely won't survive. It's driverless technology is thousand years behind Google.

I have no idea if it will survive or not--it will only survive with autonomous fleets. With that said, Uber has 40 million users (at least) and has reached platform "critical mass," and autonomous car technology will become commoditized once perfected, so to speak, so it doesn't really matter who "wins the race" to the best technology as it will be licensed technology.

May 10, 2017

Uber and other ride shares are surviving now because of being able to host wage-earning drivers on their platform. Remove these drivers with robots and you'll get a bunch of drivers who are as angry as the current set of taxi-drivers who spend their time whining and trashing Uber vehicles.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

May 9, 2017
<span itemprop=name>Frank Quattrone</span>:

Uber and other ride shares are surviving now because of being able to host wage-earning drivers on their platform. Remove these drivers with robots and you'll get a bunch of drivers who are as angry as the current set of taxi-drivers who spend their time whining and trashing Uber vehicles.

And that whining will fall on deaf ears, just like it has in 400 cities worldwide where Uber thrives.

May 10, 2017

Agree. Oh how the proles love to shoot their cause in the foot through their actions!

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

May 10, 2017
<span itemprop=name>Dances with Dachshunds</span>:

What possible jurisdiction could the federal government have to investigate Uber evading local laws?

Uber is a heroic company, doing battle against entrenched crony capitalists (corporatists) and bureaucrats the world over. Through force of will Uber has bulldozed through entrenched interests that no one thought they could defeat. Lyft, on the other hand, has a more sustainable business model--it's called letting Uber do the dirty work and take all the publicity hit while Lyft receives the benefits of Uber's heroics.

IANAL, but patterns of illegal behavior that cross state lines are covered by RICO.

https://www.law.cornell.edu/uscode/text/18/part-I/...

Section 1961 DEFINITIONS (1) "racketeering activity" means... (B) any act which is indictable under any of the following provisions of title 18, United States Code... section 1503 (relating to obstruction of justice), section 1510 (relating to obstruction of criminal investigations), section 1511 (relating to the obstruction of State or local law enforcement)

Section 1962 PROHIBITED ACTIVITY(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

Section 1963 CRIMINAL PENALTIES
Whoever violates any provision of section 1962 of this chapter shall be fined under this title or imprisoned not more than 20 years (or for life if the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment), or both, and shall forfeit to the United States, irrespective of any provision of State law--
(1) any interest the person has acquired or maintained in violation of section 1962;
(2) any--
(A) interest in;
(B) security of;
(C) claim against; or
(D) property or contractual right of any kind affording a source of influence over;
any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962

Section 1964 CIVIL REMEDIES
(a) The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons.
(b) The Attorney General may institute proceedings under this section. Pending final determination thereof, the court may at any time enter such restraining orders or prohibitions, or take such other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper.

If the case is proven in criminal court, there may be jail time for principals, CEOs, and employees who knew about and permitted the obstruction of justice. It appears that if the criminal case against the firm is proven, it also means that investors stand to lose ALL of their investment.

Regardless, if the prosecutor gets probable cause for civil remedies, federal courts may be able to shut Uber down. That's fine; we all have Lyft and Curb, too.

In my view, the federal government cannot permit the attitude that it is acceptable to aggressively engage in a pattern of lawless behavior to make a buck. The last time we encountered this behavior, it was the Drexel Burnham Lambert; before that it was the mafia. If obstruction of justice is OK, what about corporations that engage in theft or using assault as a debt collection practice?

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May 9, 2017

Illini, I'm sorry, but this is just wrong. For one, last time I checked, a crime committed in "Portland, Oregon" against Portland's laws does not constitute "interstate crime." I can't even begin to describe how ridiculous your interpretation of the law is.

Secondly, it's not a crime to avoid sting operations. Third, the federal government has no jurisdiction to prosecute anyone for an action that is illegal in one city and completely legal in another. Your interpretation of the law is utterly asinine.

<span itemprop=name>IlliniProgrammer</span>:

In my view, the federal government cannot permit the attitude that it is acceptable to aggressively engage in a pattern of lawless behavior to make a buck. The last time we encountered this behavior, it was the Drexel Burnham Lambert; before that it was the mafia. If obstruction of justice is OK, what about corporations that engage in theft or using assault as a debt collection practice?

Your view is wrong, patently wrong, and wrong on its face. The mafia committed murder and drug trafficking, both federal crime. What Uber did was perfectly legal in the VAST MAJORITY of U.S. territory. The federal government has NO authority to prosecute violations of local law.

May 10, 2017
<span itemprop=name>Dances with Dachshunds</span>:

Illini, I'm sorry, but this is just wrong. For one, last time I checked, a crime committed in "Portland, Oregon" against Portland's laws does not constitute "interstate crime." I can't even begin to describe how ridiculous your interpretation of the law is.

Secondly, it's not a crime to avoid sting operations. Third, the federal government has no jurisdiction to prosecute anyone for an action that is illegal in one city and completely legal in another. Your interpretation of the law is utterly asinine.

Companies and people have the right to deny an illegal service to police. Leading them on a wild goose chase and misrepresenting service (by showing fake cars going by and having fake drivers cancel) isn't the same thing.

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May 9, 2017
<span itemprop=name>IlliniProgrammer</span>:

<Companies and people have the right to deny an illegal service to police. Leading them on a wild goose chase and misrepresenting service (by showing fake cars going by and having fake drivers cancel) isn't the same thing.

It doesn't matter! It's not a FEDERAL CRIME. RICO does NOT apply to city ordinances! I honestly can't believe the basics of federalism need to be described to you.

May 10, 2017
<span itemprop=name>Dances with Dachshunds</span>:

IlliniProgrammer:<Companies and people have the right to deny an illegal service to police. Leading them on a wild goose chase and misrepresenting service (by showing fake cars going by and having fake drivers cancel) isn't the same thing.

It doesn't matter! It's not a FEDERAL CRIME. RICO does NOT apply to city ordinances!

Crimes that cross into multiple states or are related to interstate commerce (IE committed by a multistate corporation) or involve territories and districts (like DC, Puerto Rico, etc) are under federal purview.

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May 9, 2017
<span itemprop=name>IlliniProgrammer</span>:

Dances with Dachshunds: IlliniProgrammer:<Companies and people have the right to deny an illegal service to police. Leading them on a wild goose chase and misrepresenting service (by showing fake cars going by and having fake drivers cancel) isn't the same thing.It doesn't matter! It's not a FEDERAL CRIME. RICO does NOT apply to city ordinances!

Crimes that cross into multiple states or are related to interstate commerce (IE committed by a multistate corporation) are under federal purview.

No, you don't get it. A crime committed in Portland under Portland's statutes and then a separate crime committed in a separate city under a different statute is NOT an interstate crime. You're objectively wrong. This isn't even questionable or debatable. And it's breathtaking that you don't get that.

May 10, 2017
<span itemprop=name>Dances with Dachshunds</span>:

IlliniProgrammer: Dances with Dachshunds: IlliniProgrammer:<Companies and people have the right to deny an illegal service to police. Leading them on a wild goose chase and misrepresenting service (by showing fake cars going by and having fake drivers cancel) isn't the same thing.It doesn't matter! It's not a FEDERAL CRIME. RICO does NOT apply to city ordinances!Crimes that cross into multiple states or are related to interstate commerce (IE committed by a multistate corporation) are under federal purview.

No, you don't get it. A crime committed in Portland under Portland's statutes and then a separate crime committed in a separate city under a different statute is NOT an interstate crime. You're objectively wrong. This isn't even questionable or debatable. And it's breathtaking that you don't get that.

Actually, you still don't get it. It has nothing to do that Uber is violating a city ordinance. It has everything to do with a pattern of illegal behavior (obstruction of justice-- the federal statutes still can apply to state and local police IIRC), sanctioned under federal law, crossing state lines, and likely also veering into DC, Puerto Rico, Guam, etc.

If I kidnap someone in Georgia and carry them to Texas, yes, I'm violating Georgia law. I'm also violating federal law. And under dual sovereignty I might expect to be prosecuted by either Georgia, Texas, or the Federal government.

In any case, half of the management at Uber are probably guilty of fraud, eavesdropping/wiretapping, obstruction of justice, etc. And this is coming from a Republican who tries to give businesses the benefit of the doubt. Kalanick and the management need to be prosecuted.

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May 9, 2017
<span itemprop=name>IlliniProgrammer</span>:

Actually, you still don't get it. It has nothing to do that Uber is violating a city ordinance. It has everything to do with a pattern of illegal behavior (obstruction of justice-- the federal statutes still can apply to state and local police IIRC), sanctioned under federal law, crossing state lines, and likely also veering into DC, Puerto Rico, Guam, etc.

If I kidnap someone in Georgia and carry them to Texas, yes, I'm violating Georgia law. I'm also violating federal law. And under dual sovereignty I might expect to be prosecuted by either Georgia, Texas, or the Federal government.

In any case, half of the management at Uber are probably guilty of fraud, eavesdropping/wiretapping, obstruction of justice, etc. And this is coming from a Republican who tries to give businesses the benefit of the doubt. Kalanick and the management need to be prosecuted.

No, illini, YOU don't get it. In your example, kidnapping is a FEDERAL AND STATE crime. Obstructing justice in Portland over a Portland statute and obstructing justice in New York City over an NYC statute are entirely independent of one another--they are both potentially STATE crimes.

The only exception that I can find is a federal law against obstruction of state law enforcement officials over gambling enforcement (since gambling has a unique state/federal relationship in the U.S.).

https://www.law.cornell.edu/uscode/text/18/part-I/...
I'm not an expert on the law, but this is a nice summary:

http://www.federalcriminallawyer.us/2011/01/12/fed...
Obstruction of justice is a felony under federal law. While obstruction of justice is often charged as a state law offense, the matter becomes a federal charge where it involves a federal court proceeding or the federal government.

EDIT: As far as I'm aware, Uber has no service in Guam, so there are no federal statutes to violate there.

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May 10, 2017

Not sure but I have noticed they seemed to have gotten more expensive since they've come to dominate the market, I hear Lyft is a lot cheaper these days.

That being said they still get my drunk ass home every night and for that I salute them.

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May 10, 2017

As an intern, you shouldn't be getting that drunk.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

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May 10, 2017

I'm not an intern yet. For the next three weeks I have absolutely no job, no school and no responsibilities. It's incredible. I feel like Ferris Bueller on his day off. I don't even know what to do with all of this time, I still have that feeling in my chest like there's always something I'm forgetting about or pushing off...but there isn't. Wild. Absolutely magical.

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May 10, 2017
<span itemprop=name>LReed</span>:

I'm not an intern yet. For the next three weeks I have absolutely no job, no school and no responsibilities. It's incredible. I feel like Ferris Bueller on his day off. I don't even know what to do with all of this time, I still have that feeling in my chest like there's always something I'm forgetting about or pushing off...but there isn't. Wild. Absolutely magical.

So out of curiosity why do you have intern listed in your status?

May 10, 2017

INCOMING SUMMER ANALYST1!1!1!

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May 10, 2017
<span itemprop=name>LReed</span>:

INCOMING SUMMER ANALYST1!1!1!

That's not an intern.

Also, this:

https://www.wallstreetoasis.com/forums/if-i-see-an...

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May 10, 2017

Well in his defence, at least he did not use the "incoming analyst" tag that WSO has in place.

But @LReed , bad call mate.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

May 10, 2017
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May 11, 2017