The Wall Street Journal reports that the FBI and other law enforcement agencies are investigating whether Uber Technologies used software to interfere illegally with its competitors.
They are looking at an alleged software program-- called internally "Uber Hell"-- that was secretly downloaded to an Uber driver’s phone app. The software allegedly could track when the driver was working for competitors such as Lyft.
"Uber Hell" reportedly allowed Uber to see what Lyft was charging for rides and how many drivers were nearby.
The implication is that Uber would adjust pricing in real-time to undercut Lyft.
This follows allegations in 2014 that Uber had employees order and cancel more than 5,000 rides with Lyft.
On Monday, our class will examine O’Connor v. Uber Technologies, Inc. (2015).
In that path-breaking case, Uber drivers in California successfully argued that they deserved a trial on the issue of whether they were employees, and therefore entitled to a tip-for-service under that state’s labor code.
Uber charged riders a 20% service fee—a fee that struck many riders as an added-tip. Uber did not remit that money to drivers.
From my perch as a labor/employment law professor: When a company has a strategic vision that fundamentally builds on the idea of subverting labor/employment law, they not only risk liability in those areas—these "geniuses" don’t know when to stop cheating. (Another example is Enron, the famously fraudulent company that cheated employees' pension plans and energy markets.... and investors.)
If these allegations are true, Uber executives would appear to face criminal wire-fraud and antitrust charges. And that’s before any lawsuit from Lyft.
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