Tue | Dec 12, 2017

Uber facing probe on allegations of espionage

Published:Wednesday | November 29, 2017 | 12:00 AM
The Uber website is displayed on a smartphone.

Federal prosecutors are investigating allegations that Uber deployed an espionage team to plunder trade secrets from its rivals. The revelation triggered a delay in a high-profile trial over whether the beleaguered ride-hailing service stole self-driving car technology from a Google spin-off.

The probe under way at the US Justice Department centres on a 37-page letter that described allegations made by Richard Jacobs, Uber's former manager of global intelligence. Jacobs had the letter sent in May to an Uber lawyer. The letter contended that Jacobs had been wrongfully demoted and then fired for trying to stop the company's alleged misconduct.

The investigation hadn't been publicly known until Tuesday, when it surfaced in a court hearing that was supposed to set the stage for a trial pitting Uber against Waymo, a self-driving car pioneer that started within Google eight years ago.

The hearing instead quickly turned into a forum raising more questions about Uber's ethics and corporate culture. Over the past year, Uber has been rocked by revelations of rampant sexual harassment inside the company, technological trickery designed to thwart regulators and a yearlong cover-up of a hacking attack that stole the personal information of 57 million passengers and 600,000 drivers.

Jacobs, whose lawyer wrote the letter at the centre of the courtroom drama, testified Tuesday that Uber had set up a unit called Marketplace Analytics to steal trade secrets from its rivals overseas. He didn't specify which competitors Uber had targeted. His allegations had been kept under wraps until the Justice Department passed them along to US District Judge William Alsup last week.

In an unusual move, Alsup had recommended in May that the Justice Department open a criminal investigation into Uber, based on the evidence he had heard in the Waymo case.

To protect itself against potential trouble, Uber frequently communicated on a service called Wickr that automatically erases messages, according to Jacobs. The company also relied on a surreptitious computer system to eliminate all digital trails, and dispatched its security team to train self-driving car engineers in Pittsburgh how to conceal their electronic tracks, Jacobs testified.

 

STOLEN TRADE SECRETS

 

Uber's espionage team also hired contractors who employed former CIA agents to help with its surveillance, according to Jacobs.

Pressed under questioning, Jacobs acknowledged that the letter also alleged that Uber had stolen trade secrets from Waymo, as well as other intellectual property in the US.

But Jacobs said that his lawyer was mistaken in making that allegation. He insisted he didn't know anything about Uber's espionage team trying to steal anything in the US, suggesting he missed the purported mistake because he spent only about 20 minutes reviewing it while he was on vacation with his wife.

Uber paid Jacobs US$4.5 million as part of a confidential settlement after his firing, Jacobs said while being grilled by Waymo lawyer Charles Verhoeven. Part of that settlement includes Uber stock, a US$1 million consulting fee and a provision requiring him not to say anything that would harm Uber.

- AP