PITTSBURGH — This city was supposed to be a bright spot for Uber — a tech-friendly oasis from its snowballing worldwide travails over taxi rules, labor relations, sexual harassment and an exodus of executives.

Instead, the ride-hailing company’s sharp-elbowed tactics have alienated political leaders in Pittsburgh too, less than eight months after Uber launched a pilot project that uses self-driving Volvos to ferry passengers through the Steel City’s hilly streets.


One of the company's most vocal critics, Democratic Mayor Bill Peduto, says he originally envisioned Uber’s much-lauded Advanced Technologies Center as a partnership that would bolster the city’s high-tech evolution. Instead, he’s grown frustrated as the company declined to help Pittsburgh obtain a $50 million federal “Smart Cities” grant, rebuffed his suggestions for providing senior citizens with free rides to doctors appointments, and lobbied state lawmakers to alter his vision for how self-driving vehicles should be rolled out to the public.

Then came the late January weekend when Uber appeared to side with the Trump administration by undermining a taxi boycott at New York's JFK International Airport during a protest against the president's immigration policies.

Peduto, who opposed Uber continuing service during the boycotts, sent a long, blistering text message that evening to Uber founder and CEO Travis Kalanick, who didn't respond. (Uber later publicly apologized for "any confusion" it caused.)

It adds up to a “constant drumbeat of Uber not being a good partner, and that’s not the Pittsburgh way,” Peduto said in a sit-down interview with POLITICO. “Uber wanted to use our public right-of-ways and didn’t want to be engaged with the city when it needed something."

Companies that care about only profit and not societal benefit will see their business models hurt eventfully, the mayor predicted. "Because eventually someone is going to create a better app,” he said. “And when that app also has somebody driving the vehicle have health care to take care of their family, it’s not going to be cooler to roll up in an Uber."

Uber disputes Peduto’s characterization, saying the company and the city maintain a great relationship.

"Smart Cities grant aside, we continue to invest and re-invest in the Pittsburgh community and we want to continue to work closely with the mayor," Justin Kintz, Uber's director of policy and public planning, said in an interview.

A company spokesman said Uber has invested "hundreds of millions of dollars" in Pittsburgh and created hundreds of jobs there. (An employee at its Advanced Technologies Center would say only that it has a "handful" of the self-driving cars trawling the streets downtown.) Recode, citing data from Uber documents it obtained, said in March that the company had 43 self-driving vehicles. Not all are being used in Pittsburgh.

Peduto is not the only Pittsburgh politician disenchanted with Uber. In fact, as he runs for reelection, Peduto has faced accusations of being too eager to give the company a warm welcome.

"I am not that technologically hungry that I need to be a partner with Uber," said John Welch, a minister who is one of Peduto’s two rivals in the May 16 Democratic primary. "It brings a bad name to tech firms and brings a bad name to the city of Pittsburgh."

Welch, who described Kalanick as "Machiavellian,” said he would have no trouble asking Uber to leave the city.

Peduto’s other Democratic challenger, Councilwoman Darlene Harris, expressed concerns about the safety of self-driving vehicles and said the city should have negotiated harder before letting the company set up shop. “I would have a lot of conversations before I’d ever come driving up to the City-County Building and saying, ‘I’m with Uber,'" she said at a recent mayoral debate.

Peduto defends the self-driving project and says autonomous vehicles are the future, so they may as well be developed and tested in Pittsburgh. But he has also escalated his complaints by airing them in The Wall Street Journal, telling the newspaper that Uber has “a moral obligation to society” to provide amenities such as better working conditions for drivers and services for elderly residents.

The souring of a once-strong relationship between Uber and a key city partner could portend future snags as the rapidly growing company expands in other cities and countries. As with other companies in the sharing economy, relationships with municipalities are important for Uber, which in its early years faced opposition from taxi operators and regulators.

Uber’s broader woes have only continued in recent months. In one week alone, it was temporarily kicked out of Italy and battled Google’s parent company in court over the rights to self-driving intellectual property, while a survey found Uber losing favor with U.S. consumers compared with its arch-rival Lyft. Uber has repeatedly faced accusations of fostering a hostile atmosphere for women, including a February tell-all by a female engineer who said she had endured endemic sexual harassment while working for the company.

As CEO, Kalanick remains in charge of major decisions, despite controversies such as the leaking of a video in which he cussed out an Uber driver during an argument about the company’s practices.

Pittsburgh was supposed to be different. When it opened its self-driving project here in September, Peduto welcomed the company's Advanced Technologies Center, which arrived without economic incentives from the city.

“You can either put up red tape or roll out the red carpet,” Peduto told The New York Times at the time. “If you want to be a 21st-century laboratory for technology, you put out the carpet.”

One of the company's most vocal critics, Democratic Mayor Bill Peduto, says he originally envisioned Uber’s much-lauded Advanced Technologies Center as a partnership that would bolster the city’s high-tech evolution. | AP Photo

It didn’t take long for tensions to arise.

One concerned the city’s hopes for the $50 million federal grant, part of which would have used Uber’s self-driving technology to take lower-income seniors to doctors and hospitals for free. Uber declined to participate, and the grant went to Columbus, Ohio.

Kintz acknowledged that Uber didn’t sign onto Pittsburgh’s Smart Cities project, saying the company didn’t think the program would be a “suitable” use of its technology. "We certainly have a soft spot in our hearts for Pittsburgh, and we were pulling for them," he said.

Peduto has also clashed with the company on how its autonomous cars should be rolled out to passengers, and he complains that Uber has undermined his priorities by lobbying state lawmakers in Harrisburg. Uber won the right through state law to charge for the self-driving service and make it available to the entire public, while Peduto had wanted it to be free and available to only a select group, preferring a more controlled test of the service.

Uber also lobbied successfully against a fee on ride-sharing that Pittsburgh supported, similar to a policy in place in Philadelphia.

"There was a constant procedure that Uber took, whether it was changing the rules in Harrisburg after we had set the rules on the local level," Peduto said, "lobbying against Pittsburgh in Harrisburg when Philadelphia was getting a fee on ride share and Pittsburgh tried to join in and their lobbyists opposed it."

Peduto sees some signs of improvements, saying Uber has taken on a "different tone" since its most recent deluge of public relations disasters. But he suggested the company change the way it handles legislative disputes if it intends to expand its self-driving cars nationwide.

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"Pushing a power agenda through lobbyists would be the worst thing they can do with their business model," he said.

Meanwhile, Uber is about to face some competition in the Steel City. Ford announced in February it would invest $1 billion in Argo AI, a self-driving car startup based in Pittsburgh founded by two graduates from Carnegie Mellon University.

"They wanted to be engaged in Pittsburgh," Peduto said of Ford and Argo AI, adding that they have been "completely the opposite" of Uber. "They have very strong civic pride."

Ford is on board for a positive relationship with Pittsburgh as well.

"Pittsburgh is going get an infusion of support," said Curt Magleby, Ford vice president of government relations, without elaborating on the support. "This is not going to work unless we have support from the cities."

In Washington, Democratic Rep. Mike Doyle, whose district includes Pittsburgh, dismissed the tensions. Peduto expressing unhappiness with Uber is business as usual for any politician interacting with a local business, he said.

“I think the mayor expressed some concerns with Uber just like he would with any company,” Doyle said in an interview in the Capitol. “I wouldn’t say his relationship has soured. … Pittsburgh is looking to attract as many companies as we can, so we’re happy that Ford has come in, and we’re happy that Uber’s there too.”