After spending much of 2019 staunching losses, Uber Technologies (NYSE: UBER) has announced a major expansion in Dallas, Texas. The transportation giant will open an office with at least 3,000 employees in a downtown neighborhood, with plans to make Dallas its largest hub outside of its San Francisco headquarters.
The move is a feather in the cap for the sprawling southwestern city. A growing number of transportation operators have opted to launch a range of cutting-edge mobility services, from self- driving trucks to robotic food delivery and air taxis, in this Northern Texas metropolis.
“If you look at the companies making those decisions – Uber, Kodiak, Toyota – Dallas makes a lot of sense, because of the ease of operations, real estate and the talent pool,” said Duane Dankesreiter, senior vice president of research and innovation at the Dallas Regional Chamber of Commerce. “Dallas is well-positioned in terms of the new mobility conversation.”
Earlier this month autonomous trucking startup Kodiak Robotics opened an office in Dallas, where it will soon launch its first commercial route. Toyota relocated its North American headquarters to north Texas in 2017.
A central hub
Uber will hire or relocate about 400 employees to Dallas by the end of the year, Chris Miller, Uber’s senior manager of public policy in Texas, told the Dallas Morning News. By July 2020, workers will move into a glamorous new 250,000 square foot tower called the Epic, located in the downtown neighborhood of Deep Ellum.
Most of the Dallas employees will work in finance, human resources, legal, business development, Uber Eats and recruiting, Travis Considine, communications manager for Uber Texas, told FreightWaves. The company’s decision, he said, was “primarily driven by the depth of the Dallas labor market for the types of talent we are looking to recruit.”
Texas migration
With the new hub, Uber joins a stream of transportation companies that have migrated to the Dallas metro areas in recent years. One is Uber Elevate, an air taxi service that the company plans to launch in only three markets – Dallas, Los Angeles and Melbourne, Australia – by 2023.
A partnership between the Dallas-Fort Worth suburb of Frisco and autonomous vehicle company Driver AI (recently acquired by Apple) brought the nation’s first self-driving car service to public roads in 2018; the service is now operating in Arlington, another suburb. A group of civic and business leaders is conducting a feasibility study to see if the Virgin Hyperloop One would be viable in the region.
In addition to Kodiak, several other self-driving truck outfits are testing vehicles, among them San Diego-based TuSimple, as well as the San Francisco startups Embark and Starsky Robotics.
Many of these companies were lured by good weather and a favorable regulatory environment for testing autonomous vehicles. That Uber selected Dallas for its second-largest office suggests the city may also may be gaining an edge over top tier coastal cities as a home base for technology companies.
As the likes of Seattle, New York and San Francisco struggle with skyrocketing real estate prices, traffic congestion – not to mention local residents who are hostile to big tech – Dallas offers a combination these cities can’t or won’t offer – lower labor expenses, lower cost of living and a business-friendly climate.
State, city and county leaders approved nearly $36 million in economic incentives to bring Uber to Dallas. In return, the company is expected to create 3,000 jobs and pay at least an average annual salary of $100,000.
Dallas is home to the country’s fourth-largest pool of tech talent, major universities and real estate costs that are substantially lower than West Coast markets, Dankesreiter said. “Compared to other high growth and high tech markets, we’re a much better deal.”
The average tech salary in Seattle reached $138,000 this year.
A ride-sharing giant stumbles
Uber could use a deal. The transportation giant lost over $5 billion in the second quarter of 2019 and has taken cost-cutting measures, laying off about 400 marketing employees earlier this summer and recently freezing hiring of software engineers and product managers.
The company also faces mounting criticism that its ride-sharing services have contributed to traffic congestion.