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Uber's Partnership with Pittsburgh Makes a Wrong Turn

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【Summary】Kalanick promised Pittsburgh Mayor Bill Peduto that autonomous rides would be free to the general public. Unfortunately, this arrangement turned sour. The company began charging passengers for driverless rides.

Michael Cheng    Jun 01, 2017 8:10 AM PT
Uber's Partnership with Pittsburgh Makes a Wrong Turn

Uber is not having a great year. The ridesharing giant is currently pinned down by a crippling legal battle with Google's Waymo over self-driving technology trade secrets, resulting in the termination of Otto co-founder Anthony Levandowski from his leading role in the establishment.

The company's stroke of bad luck doesn't end there.

New reports recently surfaced surrounding Uber's relationship with the city of Pittsburgh. The two formed a strategic partnership over nine months ago, with the objective of rolling out driverless cars in the area, starting with experimental pilot programs. Now city officials are speaking out about the company's shortcomings, suggesting it has failed to follow through with some of its promises to the mayor and other local representatives.

"This was an opportunity missed," said Michael Lamb, Pittsburgh's city controller.

No Free Rides

Most of the city's frustration is coming from Bill Peduto, the mayor of Pittsburgh. It's no secret that Mr. Peduto, a third-generation local, and Travis Kalanick, CEO of Uber, have a very close relationship. The mayor was one of the first passengers in the area to hail and ride in a driverless Uber car. Kalanick also promised Mr. Peduto that autonomous rides would be free to the general public. Unfortunately, this arrangement turned sour. The company began charging passengers for driverless rides.

As part of the city's effort to modernize urban transportation, Uber has reportedly become absent. Pittsburgh applied for a $50 million grant from the government for transportation-related projects. According to Mr. Peduto, Uber was asked to contribute $25 million to the proposal. The company did not provide the funds, claiming that the request was late and the amount was too big.

Seeing the fall out as an opportunity, Ford has stepped in to strengthen its partnership with the city. Earlier this year, the automaker invested a generous $1 billion in Pittsburgh-based Argo AI. The business is also working closely with Mr. Peduto on data sharing and work force development projects.

Uber Answers Back

In a move to save itself from bad press, Uber answered back with a barrage of statements. It reinforced its role in the community, citing that it was responsible for creating 675 jobs in the area. The company claims it is also supporting local organizations, such as a women's shelter. Let's not forget about Uber's $5.5 million contribution to Carnegie Mellon University for a new robotics facility (after it poached several key faculty members and around 35 technical staff).

"Uber is proud to have put Pittsburgh on the self-driving map, an effort that included creating hundreds of tech jobs and investing hundreds of millions of dollars," the company said in a statement. "We hope to continue to have a positive presence in Pittsburgh by supporting the local economy and community."

Despite hitting some potholes along the way in its relationship with the city, Uber is still committed to expanding its services in the area. Earlier this month, the company rolled out UberEats, a 24/7 food delivery service that has reeled in over 100 participating restaurants and eateries. 

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