Uber Takes Texas Taxpayers For A Ride

Photo: AP

Uber, the ride-hailing company that has lost $16.2 billion over the last two and a half years, got a bit of good news thanks to the generosity of Texas taxpayers.

The unprofitable company will open a new office in Dallas, which the company says will be its biggest headquarters outside of San Francisco. In exchange, the company will receive up to $36 million in “economic incentives,” otherwise known as kickbacks, $24 million of which will come from the state.

Uber is hardly the only company to take advantage of “economic incentive” packages offered by governments hoping to “create” jobs—the jobs, of course, are not created, but taken from other places, and I’m using quotes a lot here because the language used around this stuff is super screwy—with Amazon the most infamous example.

Dallas was one of the dozens of cities that “lost” the HQ2 competition. Ironically, it was Dallas’s thirst around HQ2 which, according to the Dallas Morning-News, resulted in the consultant Uber hired reaching out to the city:

In early 2019, Uber began looking for a city where it could open a general and administrative office to support the business, Miller said. It hired site selection consultant CBRE to guide the search.

Dallas officials first heard about a potential corporate expansion in March but didn’t know the company behind it. Mike Rosa, senior vice president of the Dallas Regional Chamber, said a CBRE representative called him and asked about the Dallas area’s bid for Amazon HQ2.

He told Rosa he’d soon hear about another big project.

In early April, a small group of city and state leaders gathered at the Dallas Regional Chamber office. They learned the company was Uber — and that it had already done its homework. It had narrowed its list to two leading contenders: Dallas and the Phoenix area.

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Uber, learning from virtually every American sports team, did its homework in another sense. It knew it didn’t need to launch an open bidding process as Amazon did to get the best deal. All companies have to do is tell the city they want to move to that they’re interested, float the idea that they’re talking to another city too—it could even be true, for all anyone cares—and let the bidding begin.

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The state funds were awarded through the Texas Enterprise Fund, a controversial program created in 2003 that often results in companies bailing on the state for a sweeter offer elsewhere before the contract is up without creating all the jobs they promised or secretly renegotiate the terms of the deal.

Rounding out the irony is the standing offer from Dallas transportation officials to use public funds to improve transportation options around the headquarters of a company that has made transportation and traffic in every major American city worse:

Local transportation officials have sought to sweeten the deal, too. Michael Morris, the director of transportation for the North Central Texas Council of Governments, proposed committing $10 million to $15 million to improve transportation in and around Uber’s office.

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Congratulations to Dallas on their new neighbors.

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About the author

Aaron Gordon

Senior Reporter, Investigations & Technology, Jalopnik