Uber probe puts vanishing message system in spotlight

Joel Rosenblatt
Bloomberg News

A criminal probe of Uber Technologies Inc. has turned up evidence that the ride-hailing company used encrypted messaging to hide its tracks while spying on rivals, evading authorities and fighting off lawsuits.

A criminal probe of Uber Technologies Inc. has turned up evidence that the ride-hailing company used encrypted messaging to hide its tracks while spying on rivals, evading authorities and fighting off lawsuits.

Richard Jacobs, who worked for a corporate surveillance team at Uber, privately told federal prosecutors about the secret messaging system and publicly testified about it on Tuesday. He provided details on how he and his former colleagues were trained to “destroy communications that might be considered sensitive.”

His allegations reveal yet another dimension of Uber’s renegade corporate ethos, which has landed the San Francisco-based company in multiple scandals. As of October, Uber was facing at least five criminal probes by the U.S. Justice Department, Bloomberg News reported.

Jacobs was put on the witness stand Tuesday after the judge learned from prosecutors last week that he had communicated with them. U.S. District Judge William Alsup said he takes Jacobs’s account seriously because prosecutors found it credible.

Jacobs disclosed in court that he reached a $4.5 million settlement with Uber and continues to act as a consultant for the embattled startup.

“I’m assisting in the internal investigations into these behaviors and practices, and I’m helping them get to the bottom of these allegations,” he said. “I’m being paid to assist.”

Jacobs became the star attraction at a hearing that was meant to cover final preparations for a much-anticipated trial over allegations that Uber stole self-driving technology from Waymo. The trial, which was set to begin Wednesday with jury selection, was indefinitely postponed over the judge’s concern that relevant information that Jacobs shared with prosecutors may have been withheld from Waymo.

But it’s unclear how much of what Jacobs revealed about Uber’s corporate surveillance tactics will help Waymo with its trade-secrets theft case.

He testified that Uber’s Strategic Services Group, which since has been renamed, was focused mostly on gaining an edge on overseas rivals. While he said stealing trade secrets was part of that mission, he told the judge he wasn’t aware of efforts to extract proprietary information from U.S. firms. He said the team sought to gather information on drivers, metrics and incentives at competing foreign platforms.

“I did not believe it was patently illegal,” Jacobs said of his activities while working for the secretive Strategic Services Group. “I had questions about the ethics of it. I suppose because of my personal ethics it felt overly aggressive and invasive.”

Jacobs testified that the surveillance team used “anonymous servers” separate from the “main part of Uber” and “non-attributable devices” purchased for the company by outside vendors. He was asked by a lawyer for Waymo about a staff attorney at Uber who allegedly guided efforts to “impede, obstruct, or influence” lawsuits against the company.

“There was legal training around the use of attorney-client privilege markings on written materials and the implementation of encrypted and ephemeral communications intended to destroy communications that might be considered sensitive,” Jacobs said.

The Waymo trial already has been delayed once, from Oct. 10, when the judge agreed to give Waymo more time to evaluate a 2016 report commissioned by Uber to vet its hire of the engineer at the center of the dispute, Anthony Levandowski.

Alsup referred the lawsuit to the U.S. Attorney’s office in May. Prosecutors opened an investigation of Uber for trade-secret theft, according to people familiar with the matter.

The Strategic Services Group was led by Joe Sullivan, who had been Uber’s chief security officer. He was ousted as the company announced last week that it had concealed a data breach that compromised information on 57 million riders and drivers. Sullivan and his team had been at the center of an internal inquiry led by the company’s board of directors.

The team acted as a corporate intelligence agency, conducting its own background checks and monitoring employees and competitors. Much of its work has been cloaked in secrecy even within the company.