Uber’s Greyball proves taxi businesses right to fear $2 levy

Mar 06 2017

The Victorian Taxi Association (VTA) endeavours to focus on supporting our members and representing their interests to achieve top quality taxi services over focusing on other providers in the market.

However, the news about Uber’s ‘Greyball’ program used to evade regulators, which surfaced over the weekend, has very serious implications for the regulators of commercial passenger vehicle (CPV) services around the world and indeed for the Victorian Government as they seek to establish new regulations for the industry in Victoria.

What is Greyball?

It is no news to the taxi industry internationally that Uber have sophisticated tools to facilitate non-compliance and evade detection. However, the level of coordination is somewhat surprising, including the developed and deployed of ‘Greyball’ software for intentionally deceiving and obstructing law enforcement officers and the creation of a playbook with a list of tactics to go along with Greyball that was distributed to its general managers.

It is reported that to counteract authorities trying to book Uber rides to build a case against the service, Uber created ‘Greyball’ software to identify them, and then send them fake versions of its app populated with "phantom" cars that would never arrive.

The Sydney Morning Herald reported that there is evidence “showing that before Victoria and NSW decided to legalise the service, Uber was not just operating outside the law, it was actively combating efforts to bring it into line.”

The Australian reported that “Uber has set up GPS rings around government offices, tracked low-cost phones and looked for other clues that regulators were targeting its drivers, such as frequently opening or closing the app or using credit cards tied to city agencies, according to the Times report. Once identified, Uber kept regulators out of vehicles by failing to send drivers their way, according to the newspaper.”

(See also coverage in Australian Financial Review, News.com.au, Business Insider, MSN and Gizmodo).

So what?

The taxi industry in Victoria has voiced serious concerns about the impact of the proposed $2 trip levy on taxi passengers, particularly the vulnerable and those in regional areas. We also hold grave fears for the impacts of the levy on taxi businesses if it is not able to be enforced comprehensively on all competitors in the market.

Greyball lends weight to our concerns about the ability of the Government to compel offshore ride sharing companies to comply with the levy (regardless of the amount) and the serious competitive neutrality and regulator equality issues if this eventuates.

Given taxis are the only provider type in the industry with infrastructure to guarantee transparency around trip numbers, taxis are likely to be left shouldering the bulk of responsibility for the proposed trip levy. 

Uber are on the record in NSW and SA as refusing to comply with the collection of a trip levy. There is no reason to believe their position will be different in Victoria.

Taxi network data is generated by various pieces of integrated technology in taxis and is independently verifiable.  The same cannot be said for independent small hire car businesses or network operators of ride share services based off-shore. There will be no way to independently verify the trip data contributed by these service providers and so can be easily manipulated to reduce their obligations to Government if indeed the Government is able to construct penalties and enforcement strategies which are effective in compelling compliance. 

The TSC has broad search and seizure powers which could, theoretically, be used if CPV providers did not comply with reporting requirements underpinning the levy. The same cannot be said for off-shore competitors as has been proven in NSW by the failure of regulators to secure data following forcible entry of premises. This has the effect of gravely compromising the level playing field which these reforms are designed to create.

It is not reasonable for Government to maintain that regulatory equality and fair transition assistance for industry participants who purchased licences in good faith can only be achieved with the imposition of a $2 trip levy with no end date which shifts the burden onto vulnerable passengers and threatens the very existence of taxi businesses, particularly in regional areas.

We implore Government and Victorian MPs to consider alternative options to funding taxi licence compensation which will not have the effect of again un-levelling the playing field.




Next article