PITTSBURGH -- Much has been written and said in recent months about the City of Pittsburgh's blossoming relationship with ride-sharing giant Uber.
In September, the California-based tech pioneer drew worldwide media attention to Steel City by using it as the backdrop for its groundbreaking rollout of self-driving or autonomous vehicles.
The rollout followed months of backchannel bonding between Uber and city officials. It also helped solidify Uber as a leader in its field, and Pittsburgh as an innovation-friendly metropolis and city on the mend.
But emails, newly obtained by PennLive through a Right-to-Know request, reveal the hidden anxieties and complexities behind the effort. They also reveal the intricate web of people, optics and ideas at work behind the scenes, and the increasingly blurred lines between public and private sectors that sometimes resulted.
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.
Why Pittsburgh?
Simply put, Uber came for Carnegie Mellon University's state-of-the-art Robotics Institute and stayed (or elevated its Pittsburgh profile) because of Mayor Peduto's enthusiastic embrace of ride-sharing.
A budding bromance between Peduto and Uber Chief Executive Travis Kalanick didn't hurt either. (More on that later.)
But beyond any personal affinity, both men saw an opportunity: Peduto to leverage Uber's presence for his once-struggling city's benefit and Kalanick to secure a key government ally in one of Pennsylvania's largest cities, and with pushback still coming from Harrisburg.
Uber formally arrived in Pittsburgh at the tail end of 2014, and Kalanick and Peduto were introduced soon after. At around that same time, plans were being hatched for some kind of public-private partnership between them, as evidenced by the emails below.
Uber pitches itself to Pittsburgh: Right-to-Know response by PennLive on Scribd
Uber was also busy launching its standard ride-sharing service in Pittsburgh, while quietly beginning to develop its self-driving fleet here.
With both in mind, it moved quickly to hone its inside track to City Hall and began looking to the mayor's office for help almost as soon as it arrived.
(The emails below reveal efforts by the mayor's office to fast track zoning and licensing processes for Uber's launch of a new self-driving testing facility in Hazelwood, and later for its expansion into a new property in the Strip District.)
Pittsburgh mayor's office helps Uber find a place: Right-to-Know response by PennLive on Scribd
The assistance sought from mayor's office staff also involved lobbying efforts, lots of them, as Uber worked to navigate a record-setting fine handed down by the Pennsylvania Public Utility Commission (PUC), and as the company prepared for hearings before the state Senate Consumer Protection and Professional Licensure Committee. This again speaks to Uber's penchant for leveraging its government allies when faced with regulatory hurdles, a practice certainly not unique to the ride-sharing industry, but one which has raised eyebrows both in and out of Pittsburgh nonetheless.
"The mayor [Peduto] seems to be a genuine enthusiast of the technology, which is fine, but it's enthusiasm for a very specific version of progress this company represents," Rick Claypool told Vice's Motherboard in October. Claypool is research director at Public Citizen and the author of a report about Uber's political activities.
"I wonder if that clouds his and other policy makers' decisions," Claypool added of Peduto, saying the mayor appears to be "patient zero," whose function has been "carrying water for the company and enlisting other politicians" to help.
Pittsburgh mayor's office lends voice to Uber's lobbying efforts in Pennsylvania: Right-to-Know response by PennLive on Scribd
Kevin Acklin, Mayor Peduto's chief of staff, told PennLive the office is simply committed to ride-sharing and the job creation, innovation and tax revenue it has brought to the city.
When Uber first came to Pittsburgh, he said, "there was a push by a number of cities to resist ride-sharing, mostly, we felt, as a protectionist measure to protect the monopolistic cab companies."
Acklin continued: "And so we made a conscious decision at the time to welcome Lyft and Uber with open arms. We felt local government should not be in the business of stifling, but should be welcoming innovation instead."
This approach makes them somewhat unique among politicians as Uber's disruptive influence on traditional transportation networks and regulatory systems continues to make waves and enemies nationwide.
But critics argue that in its embrace of ride-sharing, Peduto's office has given too much preference -- and at times too much deference -- to Uber in particular.
The emails below reveal the mayor's office even went so far as to help enlist drivers for Uber's growing Pittsburgh fleet in 2015.
One such email, sent from Uber to the mayor's office in May of that year, set a goal of creating "1,000 entrepreneurial opportunities in Pittsburgh," and suggested city officials assist "either by providing introductions to Uber or our onboarding events," or by "inviting Uber to events hosted by partners." Onboarding refers to the act of signing up new drivers.
On Sept. 17, 2015, Jennifer Krusius, general manager for Uber in Pittsburgh, wrote an email to mayor's office staff and community liaisons on this very subject. It mentioned promotional codes that could be used to get the word out to prospective drivers or riders. It also mentioned an earlier suggestion that onboarding or driving opportunities be targeted to certain demographics.
"On your end, you also mentioned it might be helpful to host a few Uber 101 sessions with immigrant groups, and you were thinking of proposing a few dates in the fall," Krusius wrote. "Is that something that would still be of interest?"
Uber has actively sought out immigrants as drivers in other American cities as well, news reports indicate.
Mayor's office helps Uber find drivers in Pittsburgh: Right-to-Know response by PennLive on Scribd
In response to Krusius' email, Valerie McDonald-Roberts, chief urban affairs officer with the mayor's office, sent the following message back less than 30 minutes later. It reads: "Thx Jennifer. I already sent the flyers out to personal network recipients. I will connect with the faith-based community as I am sure there is interest. Interesting option for people who are not car owners but would like to drive."
McDonald-Roberts was referring in that last sentence to Uber's vehicle finance program.
In speaking with PennLive by phone last week, Acklin cited the mayor's interest in job creation as the reason for the recruitment effort. It's also true that other cities have provided similar input and networking opportunities when approached by the company.
But things would only get more complicated from there in Pittsburgh, as Uber worked to expand its footprint in the city, prepared for its self-driving rollout, and as the company's private interests began to butt up against the public's.
'You aren't offering anything back'
Nowhere was this push and pull more apparent than in Pittsburgh's 2016 Smart City bid.
The competition, backed by the U.S. Department of Transportation, offered a $50 million grant money prize to the city which best melded new technologies like self-driving cars, connected vehicles and smart sensors into its existing transportation network.
And so when Pittsburgh launched its bid, it instinctively turned to Uber with a set of ambitious proposals. One involved a new Uber-backed transportation connection running from the city's Hazelwood neighborhood to the campus of Carnegie Mellon University (CMU). The other involved the use of Uber's fleet to ferry low-income and elderly residents to the doctor.
But the company balked at the $25 million price tag -- given restrictions on its ability to simultaneously develop its self-driving fleet -- leaving Peduto to wonder aloud if their "public-private partnership" was living up to its name and, perhaps more importantly, his expectations.
"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 publics investment."
(The entire exchange can be found on pages 9 and 10 in the email cluster below).
In Smart City bid, Pittsburgh turned to Uber: Right-to-Know response by PennLive on Scribd
Additional haggling ensued, but the two sides would find themselves unable to reach a deal in time.
As a backup, Uber suggested Pittsburgh might support the self-driving component of its Smart City application by instead making infrastructure upgrades and concessions -- like priority snow removal for self-driving routes -- to encourage more testing by developers, Uber chief among them. Mayor Peduto again expressed concern (Pages 7 and 8 above).
"Giving private companies over services like snow plowing would guarantee I would be voted out of office," he wrote on May 23, 2016, four months before Uber's rollout of its self-driving fleet here. "You aren't offering anything back to the public."
Pittsburgh Mayor William Peduto shakes President Barack Obama's hand on Obama's October visit to the city. (Michael Henninger/Pittsburgh Post-Gazette via AP)
Peduto, who is currently seeking a second term in office, also fretted that Uber's failure to make the $25 million investment he wanted might cost them the Smart City title and allow other cities and companies engaged in similar ventures an opening.
"I guess we won't be able to offer a proposal," he added. "I hope Austin [Texas] and Google won't beat us because of this."
While Uber held onto its money, the company did formally endorse Pittsburgh's Smart City bid. But it was Columbus, Ohio -- not Austin, Texas -- which claimed the title, besting Pittsburgh and roughly a half-dozen other finalists.
Uber's Kitty Hawk
Smart City or not, though, Uber was still busily preparing for its grandest experiment yet in Pittsburgh: Unveiling its self-driving fleet on the city's streets before the eyes of the world.
It did so in September, in a highly-orchestrated and highly-publicized event that came to define the current self-driving movement and moment.
Involvement by the mayor's office in the rollout and its level of beforehand knowledge remains the subject of some debate, and there is little clarification on this point in the emails obtained by PennLive.
But either way, Peduto and his staff shared in the adulation that followed. Often this glow included laudatory media profiles focusing heavily on the city's renaissance -- one fueled by booming white collar industries, tech included, where once the city's collars were blue -- and a new generation of pragmatic and unconventional leaders, Peduto being a prime example.
The profiles also focused on his counterpart at Uber, the company's chief executive, Travis Kalanick.
Both men were cast as stubborn visionaries and relentless advocates, the same whose bond had helped make Pittsburgh the Kitty Hawk of autonomous motor vehicles.
Their mutual admiration and ambition is also on full display in the emails obtained by PennLive, including one sent from Kalanick to Peduto in the wee hours of Dec. 22, 2015. (The entire trove of emails issued in response to PennLive's Right-to-Know request can be viewed here.)
"It's been great getting to know you over the last several months," Kalanick wrote in the 3:02 a.m. (EST) message. "My team is excited about partnering with Pittsburgh, but most importantly we're super-pumped to be working with you and your team. I'll keep you posted on the next time I'm in town..."
Travis Kalanick. AP image.
Peduto responded almost six hours later: "Thanks Travis. Looking forward to making history with you - here in Pittsburgh. When you get a chance, please connect me with one of your top people to discuss the idea we talked about - utilizing existing busways and creating new direct routes to connect Hazelwood to Carnegie Mellon to Lawrenceville. There is a competitive DOT grant I would like to partner with Uber on - and win." Peduto was referring to the Smart City competition.
Pittsburgh's Mayor Peduto gets to know Uber CEO Travis Kalanick: Right-to-Know response by PennLive on Scribd
And while the mayor would ultimately fail to coax the related $25 million investment from the company, Acklin says new investments by Uber in Pittsburgh are lined up and due to be announced this coming year. Additional details will have to wait until then, he added. Uber, meanwhile, declined to comment.
But even with those projects in the wings and the mayor's office touting job creation and tax revenue stats owing to Uber's presence here, questions about the company's relationship with City Hall will almost certainly linger.
Quid pro quo fears aside, most will likely stem from some standard-level squeamishness at the prospect of a $66 billion tech company having such access to elected and appointed public servants.
But there will also be more fundamental questions about what Pittsburgh is getting for its trouble, and whether the partnership is balanced and putting taxpayers' interests first.
To be sure, the city continues to be one of Uber's most vocal advocates and allies.
In fact, after the failure of Pittsburgh's Smart City bid in June, Uber sent condolences to Peduto's office, immediately followed by emails pointing to newly proposed self-driving legislation in Pennsylvania which the company found troubling.
But despite its consistent advocacy on issues like this, Pittsburgh found itself left out of a revenue-sharing agreement put in place in Philadelphia with the statewide legalization of ride-sharing in November.
Acklin said Pittsburgh asked Uber for its support in the creation of a similar arrangement both here and in "other municipalities seeing an explosion of ride-sharing" across the state. He added that while Uber articulated this desire during negotiations that preceded the passage of the bill, the final product failed to include them. The disparity, explained here, does reflect a long-standing rule concerning taxi and limousine revenues in Philadelphia, where cab services are governed separately from those in the rest of the state.
But others argue that Pittsburgh's support of Uber and ride-sharing in general isn't a zero sum game, but rather part of a greater, long-term vision for the rebounding Rust Belt city.
"Bill," Kalanick wrote in a February 2016 email to Peduto, "we couldn't be more excited to [be] building for the future in Pittsburgh."
The mayor and his staff certainly agree. Only time will tell if history and the critics see it that way too.
