15 Mar Trust Incident Uber
Case Author
Claude Sonnet 3.7, Anthropic, peer-reviewd by DeepThink (R1), DeepSeek
Date Of Creation
13.03.2025
Incident Summary
In 2017, it was revealed that Uber had created and deployed a tool called ""Greyball"" to systematically evade regulatory oversight in cities where its service faced restrictions or bans. The technology identified officials attempting to use the app for enforcement purposes and showed them a fake version with non-existent cars that would never arrive. The program operated globally between 2014-2017 and was approved by Uber legal team. The revelation prompted a Department of Justice criminal investigation and multiple local regulatory penalties.
Ai Case Flag
AI
Name Of The Affected Entity
Uber
Brand Evaluation
5
Industry
Transportation / Technology
Year Of Incident
2017
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Key Trigger
Media investigation – The incident became public through an investigative report by The New York Times based on information from four current and former Uber employees.
Detailed Description Of What Happened
Greyball was part of a broader Uber program called VTOS (Violation of Terms of Service), designed to identify users believed to be violating Uber terms of service. The Greyball tool specifically targeted regulatory officials who were attempting to catch Uber operating illegally in cities where the service faced restrictions or outright bans. According to The New York Times investigation published on March 3, 2017, Greyball employed sophisticated methods to identify potential regulators or law enforcement: 1) Geofencing areas around government buildings to monitor for app users in those locations; 2) Analyzing user credit card information to identify links to government institutions; 3) Searching social media profiles to identify enforcement officials; 4) Monitoring user behavior patterns such as repeatedly opening and closing the app, which might indicate investigative intent; 5) Creating a database of devices or credit cards associated with previous sting operations. Once identified as likely regulators, these users would see a modified ""fake"" version of the Uber app showing phantom cars that would never arrive, effectively preventing them from documenting violations or catching drivers. The program was reportedly approved by Uber legal team and was known to approximately 50-60 people within the company. It was used in multiple countries including the United States, Australia, China, South Korea, and Italy. After the New York Times exposé, Uber initially defended Greyball, claiming it was designed to protect drivers from harm, including from violent taxi company officials. However, within days, facing intense backlash, Uber announced it would prohibit using Greyball to target local regulators. By May 2017, the company stated it had completely stopped using the program for this purpose. The revelation prompted a criminal investigation by the U.S. Department of Justice to determine whether the program constituted obstruction of justice. The city of Portland, Oregon, also conducted its own investigation and ultimately fined Uber $3.5 million. The Greyball scandal was one of several controversies that collectively led to founder and CEO Travis Kalanick resignation in June 2017.
Primary Trust Violation Type
Integrity-Based
Secondary Trust Violation Type
N/A
Analytics Ai Failure Type
other
Ai Risk Affected By The Incident
Transparency and Explainability Risk, Ethical and Regulatory Compliance Risk
Capability Reputation Evaluation
5
Capability Reputation Rationales
Ironically, the Greyball program demonstrated Uber considerable technical capabilities: 1) The company successfully developed a sophisticated system that could integrate multiple data sources (geolocation, credit card information, social media data, and user behavior patterns) to effectively identify regulatory officials, 2) The program successfully evaded detection for years while being deployed globally, 3) The technical implementation was evidently effective enough that regulators in multiple jurisdictions were unable to successfully enforce regulations against Uber. However, these capabilities were directed toward unethical objectives, representing a misalignment between technical competence and ethical governance. The incident did not significantly undermine perceptions of Uber core capability to provide effective ride-hailing services.
Character Reputation Evaluation
2
Character Reputation Rationales
Uber character reputation was severely damaged because: 1) Greyball represented a deliberate, systematic, and technically sophisticated effort to evade legitimate regulatory oversight, suggesting a fundamental disregard for legal authority, 2) The program was reportedly approved by Uber legal team and known to dozens of employees, indicating that circumventing regulations was an accepted practice within the corporate culture, 3) The revelation came during a period of multiple scandals that collectively painted a picture of a company with deeply problematic values, 4) The incident epitomized Uber ""growth at all costs"" and ""ask forgiveness, not permission"" approach under CEO Travis Kalanick, demonstrating a willingness to use deceptive means to achieve business objectives, 5) The company initial defense of the program as a safety measure further undermined perceptions of its honesty and integrity.
Reputation Financial Damage
High – The Greyball scandal was one of several controversies that collectively led to a major leadership change (CEO Travis Kalanick resignation), contributed to regulatory penalties, damaged relationships with cities worldwide, and potentially delayed Uber IPO while requiring substantial resources to rebuild trust with stakeholders.
Severity Of Incident
5
Company Immediate Action
Communication + Policy Change + Program Termination – Uber: 1) Initially defended Greyball as a safety measure to protect drivers, 2) Within days, announced policy changes prohibiting Greyball use against regulators, 3) By May 2017, claimed to have completely terminated the program use for regulatory evasion.
Response Effectiveness
Medium – Uber response evolved from an initially defensive stance to more appropriate remedial actions, but the company handling of the crisis contributed to lasting reputational damage. The most significant response came later with the change in CEO and subsequent corporate culture transformation.
Model L1 Elements Affected By Incident
Reciprocity, Brand, Social Adaptor
Reciprocity Model L2 Cues
Transparency & Explainability, Algorithmic Fairness & Non‐Discrimination
Brand Model L2 Cues
Brand Ethics & Moral Values
Social Adaptor Model L2 Cues
Compliance & Regulatory Features
Social Protector Model L2 Cues
N/A
Response Strategy Chosen
Denial, Reparations & Corrective Action
Mitigation Strategy
Uber response evolved through distinct phases: 1) Initial defensive phase – The company first attempted to justify Greyball as necessary to protect drivers from violent taxi company officials, suggesting the program was primarily a safety measure; 2) Quick pivot phase – Within days of the exposé, facing intense criticism, Uber announced it would prohibit using Greyball to target local regulators while maintaining the program for other legitimate purposes; 3) Termination phase – By May 2017, Uber claimed to have completely stopped using the program for regulatory evasion; 4) Leadership and culture transformation – The most significant response came with CEO Travis Kalanick resignation in June 2017 (partly due to this and other scandals) and the subsequent appointment of Dara Khosrowshahi, who made rebuilding trust and improving compliance a central focus. This included board restructuring, new compliance programs, and a shift in stated values from aggressive growth to more ethical business practices. This evolution reflected both public pressure and investor concerns about the company governance and culture.
Model L1 Elements Of Choice For Mitigation
Reciprocity, Brand, Social Adaptor
L2 Cues Used For Mitigation
Brand Ethics & Moral Values, Compliance & Regulatory Features, Transparency & Explainability,
Further References
https://columbialawreview.org/content/the-taking-economy-uber-information-and-power/, https://www.theguardian.com/news/2022/jul/12/uber-used-greyball-fake-app-to-evade-police-across-europe-leak-reveals, https://law.stanford.edu/press/uber-secret-program-called-greyball-uses-evade-police/, https://www.tandfonline.com/doi/full/10.1080/01559982.2024.2309018
Curated
1
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