"You aren't offering anything back to the public."
December 29, 2016 4:33 PM   Subscribe

How Pittsburgh became Uber's Kitty Hawk: Gov't emails reveal the promise, pitfalls of alliance — PennLive reports on the often chummy, sometimes adversarial relationship between Pittsburgh Mayor Bill Peduto and Uber senior executives, including co-founder and CEO Travis Kalanick.
This is a look at those emails, hundreds of pages in all, sent between members of Mayor Bill Peduto's staff, the mayor himself and Uber over the last two years. They reveal a city looking for and finding its future in a company that's cutting ties with the past. They also renew questions about the nature of that relationship, who stands to benefit and, at the end of the day, who's doing the driving.
Pittsburgh and Uber seem like ideal partners, with the Steel City's reinvention as a robotics hub resulting in high concentration of talent that can help realize Uber's vision for bringing self-driving fleets to cities nationwide, and Uber bringing jobs and prestige to a region looking to build on its "eds and meds"-led renaissance.

However, there have been some bumps in the road. In 2014, Uber and Carnegie Mellon announced a "strategic partnership" which would "provide a forum for Uber technology leaders to work closely with CMU faculty, staff, and students", but that partnership was derailed by Uber's poaching of dozens of Carnegie Mellon robotics experts (previously). The ensuing bad blood was likely part of Uber's decision to offer a $5.5 million gift to CMU as a way of making amends, but so far the relationship between Uber and CMU seems to be a partnership in name only.

For his part, Mayor Peduto certainly believes in Uber, touting the jobs the company has brought to the region and extolling the company's virtues in the New York Times with quotes that wouldn't seem out of place coming from Uber's public relations department:
“It’s not our role to throw up regulations or limit companies like Uber,” said Bill Peduto, Pittsburgh’s mayor, who said that Uber planned to use about 100 modified Volvo sport utility vehicles for the passenger trials. The vehicles will also have a human monitor behind the wheel. “You can either put up red tape or roll out the red carpet. If you want to be a 21st-century laboratory for technology, you put out the carpet.”
Another email dump originally obtained by Vice's Motherboard in October shows Mayor Peduto working behind the scenes for a reduction of a $50 million fine levied against Uber for operating without permission by the PA Public Utility Commission, raising questions about whether Peduto is prioritizing the interests of the public or those of a private company.

The email threads obtained by PennLive do show some restraint on Peduto's part when speaking privately with Uber, including some concern about Uber not holding up its end of the bargain on Pittsburgh's bid to be named a 2016 Smart City:
"The public has spent hundreds of millions of dollars building a public busway for public transportation [and] If we are going to allow a private company to use it, there must be a substantial investment through a public private partnership, to return to the public," the mayor wrote in a May 21, 2016, missive to Ashwini Chhabra, head of policy development with Uber.

Peduto continued: "$25 million builds the connection from Hazelwood to CMU (and connects to East Busway). It allows for Uber to provide pay service for 5 years along it. Most importantly, it gives Uber exclusive rights to operate along the busways for five years. $5 million a year to operate the only one of its kind in the world system and put you in the lead globally, is not a lot to ask as a return to the public's investment."
Uber rejected Pittsburgh's idea, countering with a proposal where the city would give Uber priority access to snow clearing, municipal parking, and designated lanes for autonomous vehicles. Peduto even went so far as to tell Uber's representative "You aren't offering anything back to the public."

With many other cities competing for Uber's attention, and with the company displacing public transit and expanding into the trucking business, Pittsburgh will look to strike a balance between the company's positive impact on the region and its reputation for cutting legal corners, paying low wages, stealing from drivers' tips, and packing up and leaving as soon as they're asked to comply with the law. The emails obtained by PennLive show a Mayor's office torn between these two positions, wanting to share in the growth that Uber can bring to the city, but struggling to convince the company to be a better corporate citizen.
posted by tonycpsu (31 comments total) 34 users marked this as a favorite
 
(Full disclosure: I work for CMU, but not for the department Uber raided, and don't do anything related to robotics.)
posted by tonycpsu at 4:34 PM on December 29, 2016 [2 favorites]


Thank you for putting this together-- there's a lot of supporting detail that is great.
posted by mrdaneri at 4:58 PM on December 29, 2016 [1 favorite]


Thus ever more supporting my opinion that that uber execs are among the worst shitweasels around.

Competition is tough for worst shitweasel these days.
posted by rockindata at 5:32 PM on December 29, 2016 [8 favorites]


Trying to remember the name of a particular self-driving company (nuTonomy) I'd been reading about I started to see that the robot car industry had changed from this cool Google beta demo experiment to what the business news is calling a gold rush. Every car company has radically shifted from skepticism to full on funding and accelerated development. Every single car company in the world.

Kids this is happening.

The software works, the sensors are being produced in volume with volume pricing, new core hardware is being shipped.

Pittsburgh will probably be sorry for the fleas that comes from getting in bed with a scummy company like Uber and certainly giving it any longer term contracts, but Carnage Melon would've been pretty happy even a year ago to work closely with Ford or GM but new stuff is scary and sometimes giant corporations need to learn the hard way.

The tooling cycle that changes out a world wide fleet of archaic manually operated vehicles will have stumbling blocks but something, perhaps insanely escalating insurance premiums for non-sensor integrated cars becoming impossible to afford outside of a track. I can't imagine that competing against shipping companies that can cut their cost by 50% is not on the mind of anyone in that industry that watches the news. There are just going to be intense societal or economic forces that become de facto at some point quite soon.

Just try to remember not having a cell phone.

Uber has a windfall chunk of change from an industry (taxi's) that it knows will adjust and the easy money will not be so easy quite soon. It also has no history of how the world should run (like GM or such), and clearly has way less than zero interest in ethics, so I'd expect it to rush in as fast as, no faster than possible, into any crazy flyer trial that has a chance of kicking off that next disruption windfall.
posted by sammyo at 6:18 PM on December 29, 2016 [14 favorites]


Carnage Melon

Intentional or autocorrect?
posted by octothorpe at 6:34 PM on December 29, 2016 [11 favorites]


When Frank Lloyd Wright visited the newly constructed Mellon Institute, he scoffed at the architecture, "This is what happens when rich men decide to bring Greece to Pittsburgh."

I feel sorry for the cities who won't have anything nice to point to when they say, "This is what happens when we put Uber in charge of our transportation policy."
posted by peeedro at 6:39 PM on December 29, 2016 [4 favorites]


the easy money will not be so easy quite soon

It's already not easy. Uber is bleeding cash, and estimates are that they are basically paying half the actual cost of a ride on average.
posted by NoxAeternum at 6:48 PM on December 29, 2016 [7 favorites]


Carnage Melon

Intentional or autocorrect?


sigh, no, just low grade lazy ignorance


grrrr, robot cars, bah, where's my google-implant?
posted by sammyo at 6:57 PM on December 29, 2016


Carnage Melon is my new favorite thing.
posted by notquitemaryann at 7:27 PM on December 29, 2016 [9 favorites]


For anyone who's tl;dr-inclined or thinks this post is a bit too Burgh-centric, the best link of the bunch for general consumption is probably this one about municipal governments who are subsidizing Uber rides in their towns in lieu of public transit. Uber swoops in offering to solve the "last mile" problem for cities with spotty public transit service and (spoiler alert) ends up getting generous public subsidies while displacing transit lines, all while not having to serve the disabled or people without smartphones and credit cards.

I know this isn't exactly a new story -- it's sort of Uber's business model -- but the particulars (including Washington DC considering having Uber respond to ambulance calls, WTF? -- are worth reading.
posted by tonycpsu at 8:45 PM on December 29, 2016 [7 favorites]


Kids this is happening

It "happened" for about 24 hours in San Francisco before they ran a red light on video and the CA DMV ran Uber's self driving cars completely out of the state.
posted by sideshow at 11:04 PM on December 29, 2016 [7 favorites]


Well, the Uber / SF thing was 100% Uber being a bag of dickweasels and not wanting to play along with the (seemingly very reasonable) autonomous vehicle licensing scheme that CA had created, and which other major players have had no problem with.

They would have been able to continue operating, even with the red light incident (I don't think anyone expects the technology to be perfect at this point), were it not for the refusal to get the $150/car state permits. But they seem to think Atlas Shrugged is a management handbook, so they did their thing, and the state did theirs.

Google and others seem to be right behind (or maybe ahead of, hard to say) Uber in the technology department; Uber is just ridiculously aggressive in terms of deployment. Which may or may not even be a good strategy: getting cars on the road gives you some good information, and it's a hell of a publicity stunt, but it's not clear whether that information and the time spent analyzing it, is really more valuable than spending more time in the lab and on closed tracks at this point.

Perhaps Uber feels like they're especially under the gun; eventually they're going to have so much internal pressure to go public (from employees who are sitting on illiquid options and shares) that they'll have to, and when that happens... they may have a bad time. It's not hard to imagine their autonomous-car division getting sold off if they haven't managed some really impressive results by then.
posted by Kadin2048 at 11:54 PM on December 29, 2016 [3 favorites]


(I don't think anyone expects the technology to be perfect at this point)

You know what? As a pedestrian - that is, as a human being who is sometimes not in a car or a building, I expect cars to never plow through a crosswalk with pedestrians against a red light. Not ever. And I don't think that makes me some sort of unreasonable perfectionist.

Car drivers kill a 9/11 worth of Americans every three months, and are the leading cause of death for 5-24 year olds. The transition to autonomous vehicles is by far the best chance we as a society have to stop that, and I don't accept shrugging off threats to life and limb, even if it does save some VC bro a few bucks.
posted by Homeboy Trouble at 2:41 AM on December 30, 2016 [12 favorites]


Perhaps Uber feels like they're especially under the gun;

They're hemorrhaging money. They have had little success outside of the US - most notably in China, where their bid to take over the market there just ended with them leaving. They are underwriting half of the fare on a ride on average. And the sorts of investors they need are seeing this, and are questioning the model.

It turns out that as much as they tried, they couldn't escape plant costs - turns out that TCO isn't that hard for drivers to understand, and they expect their compensation to take that into account. And raising rates is a non-starter as well - they would have to double them, which would definitely cut into their business. Which is why they're going so heavily into automated vehicles (drivers are expensive) and deals with localities (good old corporate welfare). But at this point, the bloom is off Uber's rose, and people are looking at them skeptically now.
posted by NoxAeternum at 8:27 AM on December 30, 2016 [2 favorites]


AV technology has a lot of promise. But of course, rather than cautious optimism, and successful deployments hand-in-hand with industry to very limited areas of the economy (much like we do with medical technology, say for Radial Keratomy tooling) there was a flat out cattle stampede, lead by a not-highly-ethical and not-highly-successful company.

In short, business as usual.
posted by mrdaneri at 9:05 AM on December 30, 2016 [1 favorite]


Forgot to add-- the first $200M jury settlement against the makers of AV Software due to a pedestrian fatality is the specific AI landmark I am looking forwards to.
posted by mrdaneri at 9:16 AM on December 30, 2016 [2 favorites]


Metal Gear Solid 6: Carnage Melon
posted by Going To Maine at 9:35 AM on December 30, 2016 [5 favorites]


Uber may end up going out of business overextending themselves like this, but the next company won't. Don't get comfortable just because one company folds. Even if it takes another 10 years (and I'm betting it won't), this will impact several industries. Plan accordingly.
posted by domo at 9:59 AM on December 30, 2016 [1 favorite]


I'm sort of close to this as I have friends who work for Uber ATC here in Pittsburgh I had (and failed) a phone interview a few months ago but I'm really wondering how long they can spend money on moon shots like self-driving cars while losing billions of dollars a year. They've hired hundreds of highly paid engineers here and are building out a huge space here in the Strip District which makes for a lot of burn for a fuzzy goal of maybe having autonomous vehicles within a decade.
posted by octothorpe at 10:05 AM on December 30, 2016 [1 favorite]


I saw some map a while ago showing the most common job type in each state. In over half of them the states, it was truck driving. When self-driving really becomes a thing I can't even imagine the full ramifications.
posted by showbiz_liz at 10:19 AM on December 30, 2016 [1 favorite]


Yeahbut the most common job will still be only a small proportion of jobs. Glancing at data, well under 5\%.
posted by ROU_Xenophobe at 10:34 AM on December 30, 2016 [1 favorite]


5% of the workforce seems like a significant number.
posted by octothorpe at 10:37 AM on December 30, 2016 [3 favorites]


I'd think the real 'test case' for this is going to be when Amazon achieves 100 % warehouse automation. Many of the 'real world' problems that apply to 'open road' driving start in the warehouse. Just a hunch.
posted by mrdaneri at 10:40 AM on December 30, 2016


5% of the workforce seems like a significant number.

It is, but I think people hear "most common" and think it must be way more than that. That's certainly my immediate reaction before I force myself to look at the numbers.
posted by ROU_Xenophobe at 11:04 AM on December 30, 2016 [1 favorite]


Sending unemployment from 8 percent to 13 percent would not be a "small" thing.
posted by Etrigan at 11:21 AM on December 30, 2016 [2 favorites]


I'd think the real 'test case' for this is going to be when Amazon achieves 100 % warehouse automation

The warehouse robots that Amazon's keeping to itself after buying Kiva robotics strikes me as the biggest anti-trust issue of the next 15 years. They want a monopoly on logistics, and they could well get it.
posted by ambrosen at 2:57 PM on December 30, 2016 [1 favorite]




Slate being Slate: Self-Driving Cars Will Make Organ Shortages Even Worse
posted by octothorpe at 8:15 PM on December 30, 2016 [1 favorite]


Slate being Slate: Self-Driving Cars Will Make Organ Shortages Even Worse

The Onion couldn't have done better.

Will there ever be an uber fpp that isn't an over wrought hand wring-y mess? Yeah, you aren't offering anything back to the public, we want you here soooo bad. You stole all out robotics engineers, kidnapped them with sweet, sweet money. Being an exploited uber driver sucks so bad, jobs like that shouldn't exist. OMG, those jobs will disappear with these self driving cars. Robot cars will mow people down in the streets, they're obviously the wave of the future. Surely, the dead pedestrians will more than compensate for the shortage of driver organs.
posted by 2N2222 at 10:22 PM on December 30, 2016


> Yeah, you aren't offering anything back to the public, we want you here soooo bad.

I don't see why this dilemma deserves this sort of mockery. The specific quote about not offering anything back holds up in context, I think. A company's impact on a region is rarely if ever an unalloyed good. Counting the good and the bad, some city governments have looked at what Uber can bring and decided they need the company to increase what they're giving to the city in order to mitigate the downside. Sometimes, as I think the email dump shows, the cities aren't in a good bargaining position, because, while they know they can simply tell the company to fuck off, they're going to find somewhere to operate the exact way they want to operate, which with Uber, has been shown to be in flagrant disregard of the law.

> You stole all out robotics engineers, kidnapped them with sweet, sweet money.

Simple question: do market failures exist, or does the price set by markets perfectly reflect the sum total of the value of the good or service to the society in which the markets operate?

> Being an exploited uber driver sucks so bad, jobs like that shouldn't exist.

This has not been said anywhere in the post, or as far as I can tell, the comments. Are you carrying over a grudge from previous Uber FPPs, and if so, would you mind taking that noise to the grey?
posted by tonycpsu at 10:07 AM on December 31, 2016


Uber has begun working on a way to better share its data with transportation planners.
posted by peeedro at 12:49 PM on January 10, 2017


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