How Uber lost its way in the Steel City

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.

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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 only about 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 says 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 competitors 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 keeps expanding 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.”

It didn’t take long for tensions to form.

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 only to 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.

“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 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.”

Trump starts dismantling his shadow Cabinet

The White House is quietly starting to pull the plug on its shadow Cabinet of Trump loyalists who had been dispatched to federal agencies to serve as the president’s eyes and ears.

These White House-installed chaperones have often clashed with the Cabinet secretaries they were assigned to monitor, according to sources across the agencies, with the secretaries expressing frustration that the so-called “senior White House advisers” are mostly young Trump campaign aides with little experience in government.

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The tensions have escalated for weeks, prompting a recent meeting among Chief of Staff Reince Priebus, Trump son-in-law Jared Kushner, and other administration officials, according to two sources familiar with the meeting. Now, some of the advisers are being reassigned or simply eased out, the sources said, even though many of them had expected to be central players at their agencies for the long haul. The tumult underscores the growing pains that are still being felt throughout Trump’s government, more than 100 days into his term.

“These guys are being set up for failure,” said one administration source. “They’re not D.C. guys. They’re campaign people. They have no idea how government works.”

The White House began deploying the advisers throughout the bureaucracy in January, assigning them to report back on what was happening in their departments. But according to several sources, their meddling quickly began to irritate high-powered officials accustomed to running their own shops — including Defense Secretary James Mattis and Homeland Security Secretary John Kelly, both former generals; Treasury Secretary Steven Mnuchin, a successful financier; and Transportation Secretary Elaine Chao, who’s been a Cabinet secretary before.

Mnuchin assigned his minder to the Treasury basement, according to senior officials at the Treasury Department. Meanwhile, administration sources said Mattis blew up when his White House-assigned senior adviser insisted on reviewing one of his briefings. And EPA administrator Scott Pruitt’s senior leadership team repeatedly clashed with its uninvited guest, Don Benton, and iced him out of meetings, according to people close to EPA officials. Eventually Trump shifted Benton to a new job leading the Selective Service System.

Some officials have also been mocking the regular meetings of the senior advisers at the White House to discuss what’s going on at their agencies and how they can advance Trump’s agenda, calling these meetings brainstorming sessions for suck-ups.

“It’s like a roomful of Jonahs from ‘Veep,’” one administration official said.

Now the White House seems inclined to let Cabinet secretaries decide whether they want their minders to stay. A White House official said the advisers were hired on 120-day assignments that were never intended to be permanent, serving as points of contact for the White House while the administration has staffed up but officially reporting to the Cabinet secretaries or their chiefs of staff. The official pointed out that at some Cabinet departments, the advisers have already been hired for permanent jobs, while other advisers have moved elsewhere in the administration or left altogether.

“Most individuals serving in the temporary positions during the present transition will have the opportunity to move into a more permanent role within the Administration – either in the agency they now serve or in another area of the federal government,” the official said.

But sources outside the White House said that many of the senior advisers made it clear that they saw themselves as much more than temporary liaisons, claiming a mandate to ensure that Trump’s wishes were being carried out throughout the government.

For example, Kelly and his staff have often been at odds with the senior White House adviser at Homeland security, Frank Wuco, a former Navy intelligence officer, according to two people familiar with the situation. One person close to Kelly said Wuco “knows nothing about the mission” of the department and “serves little purpose or value.” The person said Wuco and Kelly’s staff have disagreed about staffing decisions, adding that only the White House’s slow pace in filling key jobs at the department has kept Kelly from ousting him.

“Dysfunction with personnel keeps these types of folks there,” the person said. Neither Wuco nor a A DHS spokesman responded to requests for comment.

At Treasury, career staffers have clashed with Camilo Sandoval, the senior White House adviser who once served as director of data operations for Trump campaign, over control of various projects, and Sandoval is now working from the department’s basement.

Sandoval doesn’t have a relationship with Mnuchin and is expected to leave the department next month, according to Treasury officials; he’s now seeking a job at the Japanese embassy, one official said.

Treasury staffers have also tussled with Andrew Smith, the department’s White House liaison, who has also been exiled to the basement. He isn’t expected to stay, either, the official said.

The tension between the senior advisers and Cabinet secretaries has put the White House in a tricky spot. Rick Dearborn, a White House deputy chief of staff, was instrumental in setting up the system of senior advisers and he’s seen as one of their biggest defenders in the White House, arguing that Trump needs to know what’s going on in his own government. And some former Trump campaign officials have complained to POLITICO that they’re being pushed aside in favor of Cabinet secretaries and their hand-picked staffers, portraying it as a betrayal of the president.

Nevertheless, the administration has already begun reassigning some senior White House advisers, starting with Benton at EPA. Jason Botel, a former senior White House adviser at the Education Department, was recently tapped as deputy assistant secretary at the Office of Elementary and Secondary Education. And a Transportation Department source said its White House chaperone, a former Pennsylvania lobbyist named Anthony Pugliese, is expected to be transferred soon.

The source said Pugliese got off to a rough start when he ordered the blocking of all outgoing mail in the early days of the administration, supposedly to prevent last-minute Obama decisions from going out the door, then neglected to lift the order. The result was a giant stack of mail full of obscure bureaucratic missives that nobody knew what to do with, the source said. A Transportation Department spokeswoman did not respond to a request for comment.

Chao, who already served as President George W. Bush’s labor secretary, was also taken aback when Pugliese told her he expected to sign off on all department policies before they went public, the source said.

“He told the secretary that once we both agree on something, then we can push it out,” the source said. “The Secretary was like, ‘Um, what’s your name again?’”

Congressional negotiators reach $1-trillion deal to fund government but provide little for Trump’s priorities

Congressional negotiators reached a bipartisan deal late Sunday to fund the federal government through September, easing the threat of a shutdown but denying President Trump several key priorities — including money for his promised border wall with Mexico.

The estimated $1-trillion omnibus package would provide $12.5 billion in increased military funding, about half the amount Trump requested from Congress. Another $2.5 billion for defense is available if the administration submits a counter-terrorism strategy to fight Islamic State.

But the final deal failed to include the big cuts to domestic non-defense accounts that Trump was seeking, and thus emerged as something of an embarrassment to the White House in his first budget negotiation with Congress.

It actually would increase federal spending on medical research, green energy programs and other areas that the White House had pegged for sharp reductions. Under it, the National Institutes of Health would see an increase of 6%, or $2 billion.

Congress strikes deal on funding for 2017 to avoid shutdown

Congressional negotiators have signed off on a deal to fund the government through September, avoiding a shutdown of federal agencies over a dispute on President Trump’s border wall and other issues, according to two senior congressional aides. 

The legislation does not provide funding for construction of a wall along the U.S.-Mexico border or eliminate money for so-called sanctuary cities that do not fully cooperate with federal immigration law, according to a summary provided by a senior congressional aide.

Nor does it cut funding for Planned Parenthood.

These are major victories for Senate Democratic Leader Charles SchumerCharles SchumerFrom Russia to North Korea, the Democratic playbook is distort, distract, destroy McConnell shoots down Trump’s call to end the filibuster The press survived Obama’s persecution, and it will survive Trump’s mean words MORE (N.Y.) and House Democratic Leader Nancy Pelosi (Calif.), who threatened to block the bill over what they considered “poison pill” riders.


In a win for Republicans, the measure provides $1.5 billion for border security and $15 billion in additional defense funding — though it’s short the $30 billion in supplemental military funding Trump requested in his budget blueprint.

The defense increase is matched by a boost to nondefense programs for a total of $30 billion in additional funding over the sequester level set by a previous budget deal. None of Trump’s $18 billion in nondefense cuts were included.

The National Institutes of Health, a priority of Democratic and Republican lawmakers alike, will see a $2 billion funding increase, to give it $34 billion total.

The deal protects 99 percent of the Environmental Protection Agency’s budget and increases clean energy and science funding in spite of Trump’s calls to cut all three priorities.

Schumer lauded the deal in a statement Sunday evening.

“This agreement is a good agreement for the American people, and takes the threat of a government shutdown off the table,” he said. “The bill ensures taxpayer dollars aren’t used to fund an ineffective border wall, excludes poison pill riders, and increases investments in programs that the middle-class relies on, like medical research, education and infrastructure.”

Democrats rejected Republican pressure to include 160 various riders that they deemed poison pills.

Sen. Patrick LeahyPatrick LeahyTrump: Spending bill a ‘clear win’ McConnell touts ‘conservative wins’ in funding deal Congress increases NIH funding after Trump calls for cuts MORE (Vt.), the senior Democrat on the Appropriations Committee, hailed the deal as a triumph for his party. 

“I am especially glad this agreement does not include a single penny for the construction of a misguided wall along our southern border,” he said. “This bipartisan agreement eliminates more than 160 poison pill riders that would have been devastating for the environment, put restrictions on consumer financial protections and attacked the Affordable Care Act.” 

The package includes $295 million to cover a Medicaid funding shortfall in Puerto Rico, one of the outstanding issue in the talks late last week.

Trump tweeted Thursday that “Democrats want to shut government if we don’t bail out Puerto Rico.”

It also includes money to permanently extend health benefits for retired miners, a top priority of Senate Democrats facing reelection next year such as Sens. Joe ManchinJoe ManchinOvernight Regulation: Senate confirms SEC pick | House GOP passes ‘comp time’ bill | Senate confirms Trump’s SEC pick Overnight Energy: GOP mulls changes to monuments law MORE (W.Va.) and Sherrod BrownSherrod BrownSenate confirms Trump’s SEC pick Overnight Energy: Trump open to gas tax increase Dem senator to give Trump plan to renegotiate NAFTA MORE (Ohio).

There is $2 billion in disaster funding for California, West Virginia, Louisiana and North Carolina to rebuild damage caused by flooding and storms and for increased funding for transit infrastructure grants.

Negotiators also included $407 million for wildfire funding to Western states, as well as money for the northeast Amtrak rail corridor, the Individuals with Disabilities Education Act and Head Start, an early education program for disadvantaged kids.

Congress must pass the package by May 5, when a short-term stopgap approved last week runs out. 

Updated 11:28 p.m.

Budget deal reached in Congress


AP Photo

Congressional leaders have reached a government funding agreement through the end of September, according to two congressional aides familiar with the matter.

The deal delivers new defense spending, a $1.5 billion border security infusion, extends expiring health insurance benefits for coal miners and includes $2 billion in new spending for the National Institutes of Health. It does not allocate any money to a southern border wall with Mexico.