Services & Software

Despite backlash, Uber says it's rapidly expanding

As the ride-sharing service could face investigations from antitrust regulators for its shady recruiting tactics, it moves into 24 more cities.

Uber CEO Travis Kalanick at LeWeb 2013. Stephen Shankland/CNET

Uber has been the focus of intense scrutiny and could even face a possible Federal Trade Commission investigation, after it was revealed it carried out an aggressive secret campaign to recruit competitor's drivers. Despite mounting criticism, the ride-sharing service claims it's doing better than ever.

Uber announced Thursday that it launched in 24 new markets making its service available in a total of 205 cities in 45 countries. The service says it now covers 55 percent of the US population with drivers in more than 100 US cities. For comparison, its rival Lyft is in 65 US cities.

"Today we are one step closer to our vision of UberEverywhere -- a bold idea that no matter where you are, a reliable ride with Uber is just 5 minutes away," Uber wrote in a blog post. "In pursuit of our simple mission -- transportation as reliable as running water everywhere and for everyone -- we aspire to transform the way people connect with their communities, revolutionizing the way they move, work and live."

Despite the company's enthusiasm for itself, it's being criticized for its recent behavior to get a competitive edge over Lyft. A report by The Verge published earlier this week detailed Uber's shady national marketing program to recruit Lyft drivers -- dubbed Operation SLOG.

The campaign involved hiring independent contractors and plying them with burner phones, credit cards for creating dummy accounts, and talking points in order to surreptitiously lure Lyft drivers to Uber's platform. Uber has also been accused of booking thousands of rides with Lyft drivers and then canceling them before the driver arrived.

Uber has responded by penning a blog post implying it's been operating above board and saying there's a lot of "misinformation" about its recruiting tactics. The company has maintained it "never" intentionally cancels rides. It confirmed it uses what it calls "brand ambassadors" to recruit drivers and company employees may take rides with competitors for recruiting purposes.

Nevertheless, Uber could be coming up against investigations from state and federal regulators for its recruiting tactics. The National Journal has spoken to antitrust experts and former government officials who said Uber's Operation SLOG actions could warrant an antitrust investigation by state attorneys general or the FTC.

"The heart of what's offensive here, the indispensable ingredient, is the canceled orders," a former FTC official told the National Journal. "That kind of behavior would be seen as having no redeeming benefits at all, poses competitive burdens, and falls within the conception of unfair competition."

CNET contacted the FTC for comment. We'll update the story when we have more information.