Uber's use of software to thwart regulators in 2014 while it was operating illegally in Portland could come back to haunt the ride-sharing company as it seeks to expand its foothold in Oregon.
Officials in Portland are calling for an investigation into the practice, one which could make public more details of the secretive company's anti-regulation tactics.
The news comes as Uber is asking the Oregon Legislature to legalize its business model statewide, potentially overriding regulations enacted in Portland two years ago.
The New York Times reported Friday that Uber had used software it called "Greyball" to identify and reject hails from city code enforcers at a time when it was operating illegally in Portland. A video by The Oregonian/OregonLive at the time showed code officers' ride requests repeatedly canceled, thwarting their attempts to fine the company and its drivers.
Uber later suspended its premature launch while the city ironed out a pilot program to allow for its business model. It launched with the city's blessing in 2015.
An Uber spokesman said Friday that the company has not used the Greyball program in Portland since then.
Portland Commissioner Dan Saltzman said Monday that the investigation will focus on whether Uber has used Greyball, or any form of it, to obstruct the city's enforcement of its regulations.
The review would examine information the companies have already provided the city, and potentially seeking additional data from them.
"We're not going after them for what happened in 2014, but if there's been any similar events in the intervening time, then we would go after them for that, as well as seek assurance that it will not happen again," Saltzman said.
The investigation also will affect Uber's biggest competitor, Lyft, Saltzman said, though Lyft did not operate in Portland until after its business model was legalized, and there's no indication that it similarly screened regulators.
"We spent almost a year meeting with officials before we began operating, and at no point did we attempt to deceive City authorities," Lyft spokesman Scott Coriell said in a statement. "We will continue to be a collaborative and cooperative partner to the City."
Commissioner Nick Fish earlier called for a broader investigation and said the City Council should seek subpoena powers to determine the extent of Uber's "Greyball" usage.
"I've been on the council for eight years, and this is the most serious breach of trust that I have observed in an industry that we regulate," Fish said. "This is not just bad behavior. This is an attack on our ability as a local community to enforce community standards."
Fish has long been critical of Uber, saying the company couldn't be trusted after its unsanctioned 2014 launch in Portland. He and Commissioner Amanda Fritz voted against legalizing Uber's business model in 2015, citing concerns about minimum insurance coverage.
On Monday, he said the program's use of technology to identify regulators was akin to red-lining.
"That same technology could be harnessed to essentially weed out 'undesirable' riders," he said.
Such an investigation could dredge up more details of the company's practices after it routinely launched without sanction from cities that said its model was barred by existing taxi regulations.
The company has fiercely guarded details of its business model, in part to prevent them from reaching its biggest rival, Lyft. In 2016, both companies successfully blocked a request from The Oregonian/OregonLive for city records that would have revealed how many drivers were licensed in the city, among other data.
Mayor Ted Wheeler said he supported Saltzman's investigation, but said he might bring in other investigatory agencies, such as the Oregon Department of Justice.
The Justice Department is looking into the issue to determine if it has jurisdiction, said spokeswoman Kristina Edmunson.
Meanwhile, state legislators have filed House Bill 3246, which would put such "transportation network companies" as Uber and Lyft under state oversight and override the regulatory frameworks set up in Portland and elsewhere.
The bill lists 21 lawmakers from both parties as sponsors, among them four state senators, suggesting broad support. But any debate will come on the heels of weeks of bad PR for Uber.
"I wish they could stay out of the news," said Rep. Brian Clem, D-Salem, a chief sponsor of the bill. "We're trying to talk about a policy, not drag one company into this. To me, it's about the technology and the concept of the sharing economy."
Clem said he sponsored a bill because it's an expedient way to bring ride-hailing services to small cities not well-served by traditional taxis. He said he's an frequent user of Lyft when he travels.
Though the current version of the bill doesn't carve out an exemption for Portland, Clem said the city's regulatory framework would likely be grandfathered into a final version.
And Clem said he expects the bill will at least get a hearing, though its been assigned to a committee busy with other legislation and no hearing has been scheduled.
The Greyball report is the latest in a drumbeat of headlines about Uber's corporate behavior and culture.
Last month, a female former software engineer published accusations of sexual harassment and sexism at Uber, prompting the company to launch an investigation.
Last week, video emerged of chief executive Travis Kalanick arguing with an Uber driver over the company's falling fares. Kalanick later apologized and said he needs "leadership help."
And in January, Uber turned off surge pricing as New York City taxi drivers protested President Donald Trump's immigration policies. It was seen as an act of collaboration with the new administration, with which Kalanick had served on an economic advisory council.
He left the position after a #DeleteUber campaign went viral, reportedly prompting more than 200,000 customers to delete their accounts.
-- Elliot Njus
enjus@oregonian.com
503-294-5034
@enjus