Court Investigating Whether Uber Connived to Cover its Tracks
30.11.2017 securityweek Privacy
Uber Under Investigation

Uber, the ride-sharing giant hit with a number of scandals in recent months, is now suspected of operating a program to hide nefarious tactics.

The start of a trial in Waymo's suit against Uber over allegedly swiped self-driving car technology was put on hold this week while the court looked into whether evidence of a cover-up was withheld.

An internal letter from a former employee contended Uber had a team that "exists expressly for the purpose of acquiring trade secrets, code base, and competitive intelligence."

Techniques used included smartphones or laptop computers that couldn't be traced back to the company, and communicating through encrypted, vanishing message service Wickr, according to the letter and a transcript of courtroom testimony obtained by AFP.

"You never told me that there was a surreptitious, parallel, nonpublic system that relied upon messages that evaporated after six seconds or after six days," US District Judge William Alsup said to a member of Uber's legal team. "You never mentioned that there were these offline company-sponsored laptops that -- where the engineers could use that."

The letter signed by former Uber manager of global intelligence Richard Jacobs told of an effort to evade discovery requests, court orders, and government investigations "in violation of state and federal law, as well as ethical rules governing the legal profession."

Jacobs was questioned in court, saying he left Uber early this year with a compensation deal valued at $4.5 million that required him not to disparage the company.

Uber executives who also testified refuted references to wrongdoing and trail-covering.

Uber's deputy general counsel said the allegations in the letter were a tactic by a departing employee to get money from the company and had no merit, according to news website Recode.

The case stems from a lawsuit filed by Waymo -- previously known as the Google self-driving car unit -- which claimed former manager Anthony Levandowski took technical data with him when he left to launch a competing venture that went on to become Otto and was later acquired by Uber.

- Shifting gears -

The courtroom drama is playing out as Uber's new chief executive Dara Khosrowshahi strives to get the company on course and prepare for a stock market debut in 2019.

Khosrowshahi's stated goal of shifting Uber to an era of responsible growth -- after a period of growth at any price -- is beginning to appear Herculean.

"They have a long way to go to win back the trust of both its users who no doubt are quite frustrated in not fully knowing what all of this means to them personally, as well as the financial community," analyst Jack Gold said of Uber.

Uber is a target of investigations and lawsuits over the cover-up of a hack that compromised personal information of 57 million users and drivers.

Uber purportedly paid data thieves $100,000 to destroy the swiped information -- and remained quiet about the breach for a year.

US justice officials are also investigating suspicions of foreign bribery and use of illegal software to spy on competitors or escape scrutiny of regulators.

Challenges at Uber include conflicts with regulators and taxi operators, a cut-throat company culture, and board members feuding with investors over co-founder and ousted chief Travis Kalanick.

The hard-charging style that helped Uber succeed also made Kalanick a target for critics.

Dents to Uber's image include a visit by executives to a South Korean escort-karaoke bar, an attempt to dig up dirt on journalists covering the company, and the mishandling of medical records from a woman raped in India after hailing an Uber ride.

- SoftBank hard cash -

Japanese telecommunications giant SoftBank this week began offering to buy out Uber investors, reportedly at a price well below the value used for the startup's last funding round.

If the investment goes ahead as proposed, SoftBank would directly pump between $1 billion and $1.25 billion into Uber at the San Francisco-based startup's current valuation of $69 billion, according to a source familiar with the matter.

As a secondary investment move, the Japanese group would buy outstanding shares from large investors at a discounted price, the source said.

"SoftBank and Dragoneer have received indications from Benchmark, Menlo Ventures, and other early investors of their intent to sell shares in the tender offer," a SoftBank spokesperson told AFP.

Meanwhile, Uber's loss in the third quarter of this year widened to $1.46 from a loss of $1.1 billion in the second quarter, according to a Bloomberg report.