Nothing Greyball About It: Uber Knew ‘Ridesharing’ Was Criminal
News analysts seem a little vague about whether Uber knew it was breaking the law by running its ‘ridesharing’ model, UberX—before scheming to avoid regulators with its Greyball program.
Maybe it was just a simple misunderstanding? A legal gray area?
Good Lord. Of course, Uber knew UberX was operating illegally.
Speaking at a 2013 tech conference, Uber CEO, Travis Kalanick—looking less stressed than these days—calls Lyft’s ridesharing model “criminal.”
In Kalanick’s own words:
“The way to think about it: Lyft basically goes into the markets that Uber is in and then gets folks who don’t have commercial licenses and don’t have commercial insurance and says ‘bring your own car’ and provide Uber-like service.” (During the time of Kalanick’s initial observation, Uber was operating a close-to-legal, black-car service).
“I’m like, holy cow, every trip that’s happening—I’m reading the law—every trip that’s happening is a criminal misdemeanor being committed by the person driving. I don’t think that’s a good law. But that is the law.”
So, according to Kalanick in this interview, here’s how Uber decides to roll moving forward:
“If the regulatory risk is off the charts, we’re gonna stand back, watch it for 30 days, let the regulators know: ‘Look, either enforce the laws that you have in place right now—or embrace it, that’s fine. But if you have a policy of non-enforcement that goes 30 days—we call this ‘regulatory ambiguity’—then we’re coming in, too, because we wanna participate in this kind of innovation.”
So, Uber gives the regulators 30 days to stop them (This is insanely arrogant, but set this aside for the moment). Truthfully, Uber didn’t actually wait 30 days in some cities. They were itching; this was a race for market share.
You may know or can imagine what happened next. After 30 days or less, most city regulators were barely cognizant of Uber.
But the regulators did eventually come.
When they did Uber’s belligerence had hardened into corporate policy. The regulators issued fines. Reasonable fines at first, expecting Uber to comply with the law. Then the fines got more expensive. Still no compliance. Some cities impounded drivers’ vehicles. Some even jailed drivers. Along the way, Uber graciously offered to use other peoples’ venture capital to pay driver’s fines, court costs and jail costs.
Somewhere along the way, Uber came up with “Greyball.”
Your honor: This video speaks to the defendant’s state of mind.