Portland’s City Council met in private Tuesday to discuss the city’s legal strategy for regulating the so-called sharing economy as companies such as Airbnb, VRBO, Uber and Lyft have rapidly expanded in the Portland market.
Reporters are barred from describing what takes place in council executive sessions. Outside of the session, Commissioner Dan Saltzman, who oversees the transportation bureau, shared an update on the city’s ongoing investigation into Uber.
“Our focus is on whether they’ve intentionally misled us as a regulator and whether they’re discriminating against people based upon where they live,” said Saltzman.
Saltzman and Mayor Ted Wheeler launched an investigation of Uber in March, after the New York Times alleged the company had used software called Greyball to evade regulators in cities where it launched without permission.
Uber used a range of techniques to spot people they believed were government workers trying to hail rides, and then, in effect, jammed the Uber app on their phones to display ghost cars that didn’t really exist, according to the New York Times.
Saltzman said the Bureau of Transportation (PBOT) will conclude its investigation into Greyball on April 28. He’d initially promised to finish it within 30 days, but Uber has asked for more time to answer questions, he said.
Here’s what we know about the scope of the transportation bureau's investigation into Greyball:
1. Waiting On Key Documents
PBOT and the city’s attorneys are still waiting on key documents and information from Uber. The city agreed to give the company until Friday to respond.
“Through conversations with their attorneys and our attorneys, we have agreed upon this Friday as the drop-dead date for them to provide us with the information we needed,” said Saltzman.
Saltzman said he believes the company is negotiating in good faith to get the city information.
By contrast, Commissioner Nick Fish has been openly skeptical of whether Uber will voluntarily participate in an investigation into its own business practices.
“I want to make sure that we’re being assertive in getting the answers to those questions. And that may include bringing a lawsuit or issuing a subpoena,” he said in an interview.
2. Even More Key: The Playbook
Among the documents the city is seeking but hasn't received from the company is a playbook Uber created to illustrate how the Greyball software could be used to evade regulation. Here's how the New York Times described that document when it broke the story of the Greyball program:
[…] Greyballing started as a way to scramble the locations of UberX drivers to prevent competitors from finding them. Uber said that was still the tool’s primary use.
But as Uber moved into new markets, its engineers saw that the same methods could be used to evade law enforcement. Once the Greyball tool was put in place and tested, Uber engineers created a playbook with a list of tactics and distributed it to general managers in more than a dozen countries on five continents.
3. Is Greyball Still Being Used In Portland?
Saltzman has asked whether Greyball, also known as VOTS, or violation of terms of service, is still being used in Portland — potentially for reasons apart from evading regulators.
The company has been asked if at any time up until the present it has used the software “to detect government officials, regulators, or any other persons seeking to use the Uber application whom Uber wanted to screen out.”
4. A Closer Look At Uber Drivers
PBOT is also reviewing its inspections of Uber drivers. The city’s regulatory staff has conducted 850 field audits on Lyft drivers and 1,460 field audits on Uber drivers since 2015, when the city struck a deal that allowed the companies to launch legally in Portland.
PBOT has asked the companies to provide more demographic information about the drivers regulators audited in the past. The city would use that information to confirm they weren’t given handpicked drivers to pass inspections.
5. What Uber Could Face
Saltzman says he’s not considering a lawsuit against the company. But based on the outcome of the investigation, Uber could face fines up to and including the suspension of its operating permit in Portland.