Uber Draws Justice Department Inquiry Over Foreign PaymentsBy
Ride-hailing company faces other legal, regulatory challenges
Newly picked CEO calls job ‘opportunity of a lifetime’
The ride-hailing company said it’s cooperating with U.S. investigators looking into whether employees violated the Foreign Corrupt Practices Act. Uber is also the subject of a U.S. probe into its use of software to deceive law enforcement officials, a program known as Greyball.
A Justice Department spokeswoman declined to comment. The department generally doesn’t confirm or deny the existence of an investigation. The inquiry was reported earlier Tuesday by the Wall Street Journal. The company didn’t disclose where the alleged violation occurred.
Uber’s board of directors on Sunday selected Dara Khosrowshahi as the company’s new chief executive officer. Khosrowshahi on Tuesday called the job “an opportunity of a lifetime” and signaled that he intended to become Uber’s next CEO. The company hasn’t yet publicly announced that Khosrowshahi has the job as final details are hammered out.
Khosrowshahi will have to tend to a number of wounds the San Francisco-based company sustained under the tenure of its former CEO, co-founder Travis Kalanick.
The company is being sued by a woman whose Uber driver was convicted of rape in an Indian court. Top Uber executives, including Kalanick, privately questioned whether the rape happened and whether it had been a set up by Uber’s largest competitor in India. There are questions in that case about how Uber executives acquired the woman’s medical report.
Uber is also being sued by the self-driving company Waymo, a subsidiary of the search giant Alphabet Inc. Waymo claims that Uber stole trade secrets when it brought on engineer Anthony Levandowski, a former Alphabet employee, as part of a $680 million acquisition of the startup Otto last year. Uber denies the allegations.
Uber’s largest shareholder, Benchmark, is suing Kalanick for fraud, accusing him of hiding many of the company’s problems when he requested the power to appoint new board seats. Kalanick argues that Benchmark was kept informed about issues at Uber.
Besides managing Uber’s legal and regulatory woes, Khosrowshahi has a significant to-do list: hire a number of top executives including a chief financial officer, mend employee morale, fight off an emboldened competitor in Lyft Inc., negotiate a multibillion-share purchase with SoftBank Group Corp., navigate an ongoing board feud and stymie losses that totaled $645 million in the second quarter of this year.
— With assistance by Tom Schoenberg, and Kartikay Mehrotra