Pittsburgh’s Uber effect: Could the city’s demands scare off other tech firms?
Members of Pittsburgh’s tech community want the mayor to cool it with his public disappointment in Uber, the San Francisco company that made Pittsburgh the center of its self-driving car development efforts.
But Mayor Bill Peduto said he won’t back down.
“They cannot create an industry that hurts cities,” Peduto said in an interview with the Tribune-Review. “Any mayor that would open their city to that simply for jobs would not be serving the people.”
However, representatives of Pittsburgh’s robotics industry and others in the city’s tech world have expressed concern that the mayor’s remarks and attitude about Uber are sending signals to other companies that the city is not welcoming to new businesses. They’ve met with the mayor’s staff to talk about the message coming from Grant Street, the Tribune-Review has learned. They are fearful about speaking out, worried what could happen if they anger the mayor.
“He’s taken a tremendous positive news story and dragged it through the mud,” said Brian Kennedy, senior vice president of operations and strategic programs for the Pittsburgh Technology Council and one of the people concerned about the image the mayor is giving the city. “I take the mayor at face value for what he said.”
Peduto said his stance isn’t anti-business. Other companies, like Ford and Argo AI, are receptive to his message, he said. Uber is an outlier, Peduto said. He has visited Silicon Valley to speak to CEOs. This week, the mayor will be in New York to speak to CEOs, and he will take his message to London later this month.
“Those that would say that our expectations of Uber are anti-business don’t firmly understand the business,” Peduto said.
Uber has maintained that it is proud of its work in Pittsburgh and the jobs it has created in the city. The company has said throughout that it hopes to continue to have a positive presence in Pittsburgh.
‘Blowing this opportunity’
Peduto welcomed Uber when the company arrived in Pittsburgh. He defended the company when the state Public Utilities Commission tried to shut it down for operating without the proper license and wrote a letter with Allegheny County Executive Rich Fitzgerald and Gov. Tom Wolf asking the PUC to reconsider the $11.3 million fine levied against Uber.
When Uber launched its self-driving car pilot program in Pittsburgh, Peduto was among the first to get a ride.
Uber CEO Travis Kalanick called Peduto his favorite mayor, and Peduto liked to mention that he and Kalanick would text each other. Peduto told The New York Times they don’t text anymore.
Things started to fall apart first behind the scenes. Peduto asked Uber to commit $25 million to infrastructure projects as part of the city’s Smart City Challenge application to the U.S. Department of Transportation. Uber didn’t, and the city lost the $50 million in federal funding to Columbus, Ohio. Uber started charging customers for rides in the self-driving cars, Peduto said, rides that were supposed to be free.
Peduto said he and other mayors met with Uber during the Democratic National Convention in Philadelphia.
“We just told them how they were messing this up, how they were blowing this opportunity,” Peduto said, calling it a heated meeting.
Peduto began to publicly criticize Uber and Kalanick in January after Uber dropped its surge pricing and went to New York airports while other taxi drivers were striking to protest President Trump’s travel ban. He said that was the turning point.
“You had immigrant cabbies who were trying to make a point, and Uber saw it as a way to make a profit,” Peduto said.
‘The Pittsburgh way’
Concerns over the mayor’s remarks about Uber haven’t played out. Delphi decided to test a fleet of self-driving cars in Pittsburgh. Ford will invest $1 billion over five years in Pittsburgh’s Argo AI to develop autonomous vehicles. Aurora Innovation, founded by leaders in self-driving from Google, Tesla and Uber, has an office in Pittsburgh.
Former Democratic state Sen. Matt Smith, head of the Greater Pittsburgh Chamber of Commerce, said he hasn’t seen any evidence that Peduto’s comments have steered away investment. Corporate Investment in Pittsburgh-area startups hit a five-year high in 2016, topping out at $66.4 million, according to a report released in March by Innovation Works and Ernst & Young.
Fitzgerald said recent stories about the souring relationship between Pittsburgh and Uber have failed to capture what’s really happening. Peduto, Fitzgerald and others want Uber here but they also want Uber to operate safely and responsibly without polluting the city’s air, land and water, Fitzgerald said. He does not see Peduto as out of line to ask that from Uber.
“Yes, we want economic development, but we don’t want irresponsible economic development,” Fitzgerald said. “I think the relationship has certainly had some issues to be dealt with, but I think by and large they are happy to be here. We’re happy to have them here. The mayor is happy to have them here.”
Peduto pointed to PNC’s Grow Up Great initiative on childhood learning and UPMC’s Pittsburgh Promise of college scholarships as examples. He said he met with Google officials at Le Mardi Gras in Shadyside — “Where people smoke, and there’s Patsy Cline on the jukebox, and the screwdrivers are completely clear with an orange strip down the middle,” Peduto said — before the company opened an office in Pittsburgh to talk about how it could contribute. One year, Google bought items Pittsburgh teachers had put on a wish list. The company is helping the city identify methane leaks and has offered to help with mapping lead water lines.
“I want Pittsburgh to rub off on them,” Peduto said of Uber. “I want it to be where they understand that they can be good civic partners and still run a profitable corporation. That’s the Pittsburgh way.”
‘Haven’t shut the door’
Peduto said he expects Uber to come around. He doesn’t regret rolling out the red carpet for the company to lure it here or going to bat for it when state regulators tried to crack down. He said he’s not trying to force the company out of the city and he hasn’t asked it to leave. Many of Uber’s employees in Pittsburgh, who were recruited from Carnegie Mellon University or spinout robotics and artificial intelligence companies, have no intention of leaving the city, Peduto said.
“If Uber decided tomorrow they were going to leave Pittsburgh, I would probably guess half of their employees would stay and another autonomous car company would move in or Ford and Argo AI would hire them.”
Kennedy, of the Pittsburgh Technology Council, is worried that the mayor’s comments make Pittsburgh look bad.
“We certainly don’t want the mayor to stop advocating for positions that he cares about,” Kennedy said. “Hopefully, we can see Uber and the city come to some terms, and we can get to the work at hand, which is growing this technology.”
Peduto acknowledged that Uber has sent emails directly to him and his office and has called asking how the company can contribute to the city. The company reached out last week when the mayor announced the city would continue to comply with the Paris Agreement on climate change, Peduto said.
The city hasn’t responded, Peduto said, and has asked Uber to wait until June 14 when he and the American Architectural Foundation finish the report out of the National Summit on Design and Urban Mobility the city hosted in May. The report will outline what cities expect from autonomous driving companies , Peduto said.
“They haven’t shut the door,” Peduto said. “I’m not looking for a check. I’m not looking for ‘Give us money.’ I’m not looking for one specific thing. … It’s not a specific ask. It’s a goal.”
Aaron Aupperlee is a Tribune-Review staff writer. Reach him at [email protected], 412-336-8448 or via Twitter @tinynotebook.