The covert software would then send more ride offers to those who were driving for both services so that each driver would spend more time with Uber. And the drivers would also receive bonuses and special promotions for taking Uber rides. Hell data showed 60 percent of Lyft drivers were "double-apping" – driving for both firms – leading to Uber giving out tens of millions of dollars a week in bonuses, The Information reported.
Use of the Hell software ended in 2016, according to The Information's sources, roughly at the time Lyft closed a $1 billion funding round. Only a handful of people knew about Hell, including Uber Chief Executive Travis Kalanick, other executives and data scientists.
The Information cited law firms that had worked with Uber in the past as saying that the company could face a number of legal challenges. These could include breach of contract, unfair business practices, stealing trade secrets and violating the Computer Fraud and Abuse Act.
An Uber spokesperson has yet to respond to a request for comment when contacted by CNBC.
"We are in a competitive industry. However, if true, these allegations are very concerning," a Lyft spokesperson told The Information.
The latest revelations add to the growing number of scandals that have tarnished the reputation of the ride hailing service. It was recently revealed that it used software called "Greyball" to circumvent local law enforcement in some markets. It has since discontinued the app. Uber's Kalanick was involved in an incident where he shouted at an Uber driver, and more recently, the company's head of communications Rachel Whetstone is leaving the company.
Read the full report on The Information.