Uber makes it official: It will set up major hub in downtown Dallas by end of year
It’s official: Uber Technologies will open an office of at least 3,000 employees in Deep Ellum, and it plans to turn Dallas into its largest hub outside of its San Francisco headquarters, company officials told The Dallas Morning News on Tuesday.
Uber will hire or relocate about 400 employees to Dallas by the end of the year, said Chris Miller, senior manager of public policy in Texas. It will move into a tower on the edge of downtown Dallas in July 2020 and then into a taller tower on the same site about two years later.
Most of Uber’s Dallas employees will work in finance, human resources and sales, Miller said. They will support the company’s transportation-related businesses, including ride hailing, food delivery and the development of urban air taxis.
“We really see this as the spine to support all of our global offices and operations across the world,” Miller said.
The new office comes at a challenging time for Uber. The ride-hailing company wants to become the “Amazon of transportation” but has yet to turn a profit. Since it went public in May, Uber has lost more than $6 billion, reported its slowest ever revenue growth and taken cost-cutting measures. It laid off about 400 marketing employees in late July and recently froze hiring of software engineers and product managers across much of its business.
But Miller said the new office in Dallas shows that Uber is focused on the future. “We are continuing to aggressively hire talent, and I think we’re proving that with the Dallas office,” he said.
State, city and county leaders approved nearly $36 million in economic incentives to bring Uber to Dallas, and some of those include job creation targets.
Miller said Uber is confident it can create 3,000 jobs and pay at least an average annual salary of $100,000.
Dallas Mayor Eric Johnson called the city and Uber “a great match.”
“Dallas is a vibrant, diverse, welcoming and innovative city, and I’m certain Uber and its employees will flourish here,” he said in a prepared statement.
Dallas County Judge Clay Jenkins said Uber’s expansion will fuel efforts to attract more high-tech companies and expand the local pipeline of workers for them.
“We already were a major tech player,” he said. “This just accelerates it and makes the next corporate location even easier.”
Gov. Greg Abbott said in a prepared statement that Uber’s investment “will bolster Texas’ continued economic success and reputation as the best state for business.”
Uber’s expansion in Dallas is a win for the city after it came up short in the race for Amazon’s second headquarters.
The tech company’s large office could fuel efforts to revitalize Dallas’ urban core and help the city better compete with its northern suburbs, which have attracted numerous corporation expansions, including Toyota North America’s headquarters in Plano.
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.
“We were always encouraging them and reinforcing their findings, but for us it was not a typical ‘Let’s drive you around and look around,’ ” Rosa said.
Miller said Dallas stood out to Uber because of its large talent pool, business-friendly climate, major airport and state and local leaders’ enthusiasm. He said Uber was also attracted to Dallas’ lower labor expenses and cost of living.
“Cost was one of many factors as we were considering this,” he said. But, he added, “it’s important to note that at the end of the day, it wasn’t just about cost but really about the talent.”
Uber CEO Dara Khosrowshahi said Texas has been “a hub of innovation for our platform” since Dallas became the first city in Texas to get the Uber app in 2012. “Uber is excited to bring this major investment to Texas and to increase our commitment to the city of Dallas,” he said in a statement.
Uber has large offices in Seattle, Chicago, New York, Washington, D.C., Los Angeles and Pittsburgh, which is the major office for Uber’s autonomous driving-focused division. It’s building a new headquarters in San Francisco for up to 8,000 employees, which will open in 2020. It recently signed a 10-year lease for a 463,000-square-foot office in Chicago but did not say how many thousands of employees would work there, according to the Chicago Tribune.
In Dallas, the company plans to occupy about 450,000 square feet of a 500,000-square-foot tower in Deep Ellum.
Uber already has about 140 employees in Texas, most of them in Austin. Miller said no decision has been made about whether to close the Austin office.
City, county and state leaders offered Uber a mix of tax breaks and economic development grants to come here.
Uber could get up to $24 million in grants from the Texas Enterprise Fund, which translates to roughly $8,000 for each of the 3,000 jobs that Uber plans to bring to Dallas. Uber must create the jobs before it receives the state funds.
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. Among the ideas, he suggested improving nearby sidewalks and bike connections, turning land under Interstate 345 into recreational or parking space and adding an electric battery-powered shuttle between Deep Ellum and downtown. He proposed the ideas in a letter to Dallas Mayor Eric Johnson and Dallas County Judge Clay Jenkins on Aug. 13.
Morris said he has about $5 million in federal and state funds to put toward the transportation improvements. He said the Regional Transportation Council will consider funding for the ideas at a Sept. 12 meeting.
The Dallas City Council unanimously approved about $9.3 million in economic incentives last week, including a tax abatement that would save the company about $746,000 over a five-year period and up to $8.6 million in grants. As part of the agreement, Dallas will reimburse up to $100,000 worth of city permit fees.
Johnson said the agreement with Uber is an example of “using incentives intelligently.” He said it will build up the tax base and create the kind of jobs that 20- and 30-somethings want.
“We are expecting a much greater return than we are putting into this incentive,” he said.
Dallas County commissioners approved tax abatements Tuesday that will save Uber about $2.6 million over a 10-year period. To receive the funding, Uber must create at least 2,500 jobs by Jan. 1, 2023, and a total of 3,000 or more jobs by Jan. 1, 2025.
Dallas County Commissioner John Wiley Price abstained from the vote. He said he wants Uber to commit to hiring a diverse workforce in Dallas and investing in workforce training programs, especially for minorities and at community colleges that serve southern Dallas.
“I want Uber to come [to Dallas], like everyone else,” Price said. “I’m just trying to see, ‘Where is the commitment?’ ” he said.
Uber skews white and male, especially among its tech workers and in its leadership ranks. About 60% of all Uber employees are men and about 45% are white, according to March 2019 data in Uber’s diversity report. Of its tech employees, only 22% are women, 4% are black and 4% are Hispanic.
Miller said Uber officials met with Price and respects his concerns. He said the company has made strides in hiring more women and minorities, both of whom are underrepresented in the tech industry. “Diversity has been and always will be a priority at Uber,” he said.
Critics have also complained that Uber relies on drivers who are contract workers instead of paying them full-time salaries and offering benefits.
A major market
Even without a corporate presence, Uber has been visible in Dallas for years. Dallas was the first Texas city to get Uber’s ride-hailing service in 2012. Two years ago, the company chose Dallas as one of the first cities where it plans to test its urban air taxi service, Uber Air. It’s working with Dallas-based real estate firm Hillwood and Fort Worth-based helicopter maker Bell to develop transit stations and vehicles for the futuristic mode of travel. And Uber signed a deal in March with Dallas Area Rapid Transit that subsidizes rides within a few miles of some light-rail and bus stations.
In Dallas, customers can order takeout through Uber Eats or rent an electric scooter from Uber-owned Jump.
Uber will move into a fast-changing part of Deep Ellum. It will sign a 10-year lease for an office that will be part of The Epic, which is being developed by Westdale Real Estate Investment and Management and KDC. The 8-acre development will include restaurants, retail, a historic hotel and a luxury apartment building.
Uber will initially move into coworking space, then move into The Epic in two phases: It will take six floors of a 16-story tower in 2020. Then it will move into a proposed 25-story tower in late 2022 and occupy about 90% of that building, Miller said. By the end of 2023, Uber expects to have at least 3,000 employees in Dallas, he said. All or nearly all of those will be new hires, he said.
Its new office will be steps from a DART light-rail stop and blocks from Deep Ellum’s bars, restaurants and concert venues. It is one of about half a dozen sites that Uber visited in Dallas. All were in Uptown, downtown Dallas or Deep Ellum.
“One of the things that spoke to us about Deep Ellum was the live, work, play environment,” Miller said. “It’s somewhere where we can see our employees wanting to live and work as well.”
Rosa of the Dallas Regional Chamber said landing the Uber project will make his job easier. He frequently flies to the San Francisco Bay Area, the home of Silicon Valley and many of the country’s best-known tech companies and startups. He said he expects more of those companies to give Dallas a closer look.
Dale Petroskey, president and CEO of the Dallas Regional Chamber, said the city’s bid for Amazon’s second headquarters helped lay the groundwork for winning Uber.
Uber is the same kind of forward-thinking company, he said. “The whole project represents the future,” Petroskey said. “It’s the future of work. It’s the future of mobility, and it’s the future of Dallas as well.”