Uber! Regulations Mean San Francisco Loses While Phoenix and Pittsburgh Win

Any business person who has dealt with California's frustrating laws, regulations and bureaucrats was nonetheless surprised to see the story headlined, "Uber Ships Self-Driving Cars to Arizona After California Ban."

Really? A state ban on Uber? The poster child of the billion-dollar-plus startup, tech-guru, market-disruptor club? Why would Sacramento give Uber, of all people, a bad time?

Reuters said Uber Technologies Inc. pulled its fleet of self-driving cars from the streets of San Francisco and sent them to Arizona's friendlier territory:

The California Department of Motor Vehicles banned Uber’s self-driving cars from San Francisco just days after they first deployed. In response, Uber picked up and moved out. "Our cars departed for Arizona this morning by truck, Uber said... . We’ll be expanding our self-driving pilot there in the next few weeks, and we’re excited to have the support of Governor Ducey."

Gov. Doug Ducey wooed Uber on social media the evening when the ride-hailing company pulled its self-driving test from San Francisco. “California may not want you; but AZ does!” he wrote on Twitter. The next morning, Uber’s fleet was headed his way.

California moved to revoke registrations for Uber's automobiles, but Uber said its vehicles require oversight by a human driver and shouldn’t qualify under California’s autonomous-driving rules. Nonetheless, the state Attorney General and soon-to-be Senator, Kamala Harris (loyal to unions and hostile to business interests), threatened legal action if the company continued operating automobiles without a permit.

Uber in Arizona

Anthony Levandowski, the head of Uber's Advanced Technologies Group, argued that because the company's self-driving system is an early prototype and requires test drivers to keep their hands on the steering wheel at all times. It's no different from driver-assist systems already on the market -- and those are exempt from the requirement for a California permit.

Levandowski said that it isn't clear why the DMV is requiring a permit now when they’ve known that Ubers have been on the streets of San Francisco over a month and have been operating safely for months in Pittsburgh, "where policymakers and regulators are supportive of our efforts."

Last year, Uber opened its Center for Excellence in Phoenix, where it serves U.S. customers and Uber users worldwide. Now, it seems that more development work will occur in Phoenix. That's what happens when a state is friendly to business interests.

Uber in Pittsburgh

Uber has been successfully testing autonomous-driving vehicles in Pittsburgh for some time. An extensive Wall Street Journal story in September -- Uber’s Self-Driving Cars Debut in Pittsburgh -- described how Uber is turning the city into an "experimental lab" where it will have as many as 100 specially equipped Volvo XC90s operating. Also, reported the WSJ, the city has its quirks – like the "Pittsburgh left turn" – which makes it a great location for testing autonomous vehicles:

It is customary for the first driver at a stoplight who is signaling a left turn to have priority over oncoming traffic when the light turns green. People in the oncoming lanes generally allow that leftward dash and are puzzled or even angry if it doesn’t occur. Uber has programmed its cars to allow other cars to make the 'Pittsburgh left' but not to make it themselves. The city is also notoriously difficult to drive through with steep hills and three rivers that make streets twist and turn unpredictably... . “If you can drive successfully in Pittsburgh, you’re pretty much done,” said Ragunathan Rajkumar, a professor at [Carnegie Mellon University] who specializes in autonomous vehicles.

Last year Uber opened an Advanced Technologies Center in Pittsburgh and this year is developing its second research facility there, which will be part of a massive brownfield redevelopment site. Uber says it likes Pittsburgh's “world-class research universities and engineers and a thriving technology community.”

Uber entered into a strategic partnership with Carnegie Mellon University to help create its new technology center and also to rely on the university's National Robotics Engineering Center to do R&D in mapping, vehicle safety and autonomy technology. Safety is one of Uber's major concerns.

Uber also selected Pittsburgh because of the clustering of robotics companies such as Carnegie Robotics and RedZone Robotics.

Although California prides itself on the pool of technical talent found in San Francisco and Silicon Valley, Uber has found justification to praise Phoenix and Pittsburgh for the talent available from local universities and the community support of technology and innovation.

Uber's experience in San Francisco shows that venture capitalists, Ph.Ds in robotics and software engineers are no match for an all-knowing California bureaucracy.

Joseph Vranich is the Principal of Spectrum Location Solutions, an Irvine-based Site Selection firm that helps companies identify optimum locations to accommodate growth or to improve competitiveness. On such projects he conducts an in-depth analysis of business taxes, the regulatory climate, labor rates, logistics options and lifestyle factors.

An Open Letter To The Democratic National Committee From A Rural Democrat

Dear Democratic National Committee,

I’m writing you as a recently defeated Democratic State Senator in the “Red State” of North Dakota to talk about rural America. I’ve heard you may be interested in learning about us after the results of the 2016 election. Some of you have taken to the national airwaves to talk about reconnecting with our life styles here in the heartland. I’m glad it seems we finally have your attention.

Here in the heartland of America, Democrats have been forced to fight against the odds you’ve unwittingly built against us to win elections. Unfortunately after the past couple of election cycles, there are only a handful of rural Democrats left who have been successful at overcoming those odds. One of them I’m proud to call my United States Senator.

You should know that since the election, many of the North Dakota Democrats I visit with have done a lot of serious soul searching. “Where do we go from here?” “Has the national party shifted in such a way that I no longer identify with it?” “How do we reclaim what it means to be a Democrat in rural America?” All of those questions are complex and will take time to resolve. The answers may come differently for each of those individuals, especially for those who have felt abandoned out here. One thing I know for sure, none of them plan to quit and walk away from their drive to improve the community around them. It is the path to successfully have an impact that is the question.

We’ve witnessed good, solid, moderate candidates get abandoned here in the Midwest; financial help stripped from promising campaigns and a separation in policy priorities between North Dakota and the coastal states. This only furthers the difficulty of finding great candidates who are willing to put their name on the ballot under your brand. Believe me; there are elected officials from the other side of the ticket whose priorities do not align with the average North Dakotan. Some of them have their eyes set on higher office. And as you know, Senator Heidi Heitkamp is up for reelection in 2018. We are willing to do all we can locally to get her reelected, but we need the assurance we aren’t going it alone.

It is not just North Dakota Democrats either. A poll done by the Pew Research Center finds Democrats are less optimistic about their party’s future. This is a swift change from the pre-election talk of Trump being the death of the Republican Party as many of your pundits boasted. We also see how party leaders are trying to rationalize this year’s drumming. It was the FBI, it was fake news on Facebook, it was Jill Stein, and the list goes on. Bullshit. All of those likely had an impact, but I fear there is a more fundamental failing in the national Democratic Party.

You’ve forgotten about who we are in rural America, and how many of us live our lives.

I’m afraid you may have learned nothing from the November 8th election. While you talked about us in rural America, Congressional Democrats decided to stick with Rep. Nancy Pelosi as their leader over the other option, Rep. Tim Ryan from rural America. Staying the course with the same leadership that has overseen the decimation of the Democratic Party in the Midwest doesn’t bode well for us in the heartland.

North Dakota Democrats have been in a precarious position for at least a decade. We are an energy-producing state with family and friends in the industry. Some of our towns are built for, and sustained by, energy workers. We understand how vital these resources are to our country while we build new technologies to diversify. We’re also proud farmers who take pride in caring for our land and feeding the world. We hunt, we fish, we own guns, and we have closets full of camouflage, blaze orange, and Carhartts. We’re the crowd at a small town street dance where live music is played on the back of a flatbed trailer. We are community driven individuals who know we all do better when we all do better.

When you push an agenda where at the top you aim to hamper fossil fuels or add foolish rules on farmland, it boxes local Democrats in, here in North Dakota. It has become easy for the local political opposition to simply say, “Those Democrats are out-of-touch. They’re the party of Pelosi!” and they do it effectively. Here, we know how our homes are heated in the cold winter months, what fuels our trucks to drive down our gravel roads, and where our food comes from. That seems like a stark contrast from the rhetoric we hear from many national Democratic leaders who seemingly want to alter our way of life.

So after laying that out, this is often where my more liberal friends ask if there is even a difference between a Republican and us rural, moderate Democrats. You’re damn right there is. To understand this, I welcome you to look at the North Dakota Legislature. Democrats pushed for sales tax exemptions on clothing for families. We reasoned for renters’ relief. We fought for family leave. We defended services for senior citizens, veterans, and people with disabilities. Meanwhile, what was passed by the Republican majority was an oil tax cut, a weakening of insurance for injured workers, corporate income tax cuts that go out-of-state, and threatening a reduction in services for senior citizens and children with disabilities. If people think there isn’t a difference between Democratic and Republican priorities in North Dakota, they haven’t been paying attention. It is on the Democratic Party to do a better job of telling that story and remind the average, hard working American that our values and priorities align with theirs.

While you’ve been focused on the White House and maintaining Congressional seats, you’ve surrendered the fight for us in the heartland. We are now left clinging on to the hope that we can recapture the trust of our local electorate. We hear from the national Democratic Party about how important connecting with rural America is to them now. Here is the problem:

You keep talking about us, but nobody is talking with us.

The first step to understanding us is listening to us. The first step to winning is showing up. There is still time. If you’re interested, I know a lot of small town diners, bar counter tops, gas stations, and locally owned businesses that would welcome you if anyone were interested in engaging and talking with us here in the heartland.

Tyler Axness

Former North Dakota Democratic State Senator

This piece first appeared at, a site discussiong ND and national politics.

The ABC of Making Housing Unaffordable

On 12 December, ABC Radio National’s Breakfast Program aired another group discussion on “Australia’s housing market”. Presenter Hamish Macdonald was joined by an “expert panel” made up of Ken Morrison, CEO of the Property Council, John Daley, CEO of progressive think tank the Grattan Institute, and Tom Whitty, managing editor of The Project, a television show pitched to the youth demographic. The conversation ran along predictable lines.

All three panelists agreed that housing affordability was a real problem, especially in Sydney. But they took up positions on various sides of the issue. Generally speaking, Morrison argued for a supply-solution and dismissed demand-management or tax reform. Daley supported a supply-solution, but insisted that some demand-management and tax reform was essential. Whitty rejected a supply-solution altogether, and thought it was all about demand-management in the form of abolishing the tax concessions for negative gearing and capital gains. "We're manipuating demand", he said.

Neither Morrison nor Daley acknowledged that greenfield development offered any advantages relative to inner-ring infill. Daley repeated his blinkered point that jobs growth is all in the centre. There was no mention of the land value impacts of limiting peripheral supply, a near universal policy across the country. Daley seemed to think all new housing should be concentrated within a few kilometres of the CBD. Bizarrely, he held up Vancouver and Portland (Oregon) as cities that got their housing location right, failing to mention that they are amongst the least affordable places on earth. Morrison made no objection to any of this.

In terms of the system of interests set out in our last article, “Sydney lurches to housing affordability disaster”, Morrison expressed the position commonly held by the Big Projects coalition, while Daley and Whitty repeated views popular with the knowledge-welfare elite. Typically for the ABC, nobody argued for suburbanisation and greenfield expansion, policies of particular benefit to the worker-trader class of industrial and routine service workers and small traders.

A striking feature of the discussion was how the demand-management crowd are utterly impervious to evidence. Morrison cited estimates by Grattan and the McKell Institute that abolishing the tax concessions would lower prices a puny 0.49 or 2 percent. Despite failing to offer any counter-evidence, Daley and Whitty were unmoved. Daley shifted onto the different point of whether the cost to the federal budget is equitable, and then started talking about the rental market. Whitty just fell back on anecdotes about the type of bidders succeeding at auction sales. Macdonald’s sympathies were clear all along, at one point becoming testy with Morrison for refusing to concede that the concessions are central.

This feeds into the false narrative being built up by the ABC and other media outlets, particularly catering to a younger audience. It’s all the fault of greedy oldies or wealthy investors with their snouts in the trough. The impulse is to slap taxes on the scapegoats. In the meantime, the real causes go undiscussed and the problem keeps getting worse.

This piece originally appeared at The New City Journal.

Caltrain and Blended High Speed Rail Promise Peninsula Traffic Paralysis

The following notice was issued by the Community Coalition on High Speed Rail in the San Francisco Bay Area.


Paul Jones, a mechanical and industrial engineer who was an Associate Professor of Industrial and Systems Engineering at the Georgia Institute of Technology, and who was the principal engineer in charge of the high-speed rail design study for the high-speed train from Madrid to Barcelona, Spain, has analyzed the traffic impacts that can be expected if the High-Speed Rail Authority (partnering with Caltrain) actually constructs its proposed "Blended System" project on the Peninsula.

What is Mr. Jones' bottom line conclusion? The following quotation is from the "Abstract" of his November 7, 2016 report, "Potential Traffic Paralysis Throughout the Peninsula: Blended Caltrain/High Speed Rail Impact on Street Traffic."

(End of notice)

The report is available at:

Note: The California High Speed Rail project, of which this work is a part, has been evaluated in reports by Joseph Vranich and Wendell Cox, who predicted substantial cost escalation ( This prediction turned out to be low. This was shown in a subsequent report, with an analysis indicating that the system is likely to require substantial subsidies to operate ( A later report by Wendell Cox and Adrian Moore found that the high speed rail line that the reductions in greenhouse gas emissions (CO2) from passengers transferring from planes and cars would cost up to nearly $19,000 per metric tonne ( This is more than 1,000 times the market price.

Toronto Area Housing Market Rigged Against Millennials

In a Globe and Mail column, Margaret Wente accurately describes Toronto’s housing affordability crisis and its principal cause. The Toronto area’s house prices have escalated strongly relative to incomes since the province enacted its “Places to Grow” urban planning regime. The resulting destruction of the competitive market for new residential has driven prices up, just as oil prices rise when OPEC implements strong supply restrictions.

Wente concluded her article:

“The solution to the affordability crisis isn’t high-density housing and mass transit in the burbs. It’s to give people what they want – by getting the ideologues out of the way and restoring a sensible balance between supply and demand. Can we do that and be environmentally responsible too? Central planners who think we can’t should be required to raise their families in an apartment block in Oshawa and take the bus to work. They’d find a better way soon enough.”

It’s no wonder that international researchers are increasingly pointing to house price escalation as a leading driver of rising inequality. Nor should it be surprising that a new Canada Mortgage and Housing Corporation report will issue its first “red warning” on Canada’s housing market, principally due to out of control house price escalation in the Vancouver and Toronto metropolitan areas.

Zoning and Urban Containment: The Need for Clarity

It is a terrible mistake to be confusing ALL zoning rules with the single true determinant of inequity in housing and economic mobility.

That is, can rural land at rural land prices, be converted to urban use?

This suppresses the price of all urban land to the extent that it is such a small input into “housing costs” relative to the cost of structures, it is very hard to push “house prices” up into unaffordable territory.

There is absolutely no city in the UK that does not have “house prices” at least double the price of the affordable, median-multiple-3 cities of the USA, in spite of the UK cities being 4 to 10 times denser than the US examples.

As long as you have urban planning or proxies for it, that rations the overall land supply, site values are highly elastic to allowed density, so much so that density correlates the wrong way with “affordability”.

This is a very important lesson that needs to be understood, fast, or there will be years or even decades of wrong policy made.


California’s Attack on Rule of Law

Morris Brown, founder of Derail (a citizen group opposed to California’s high speed rail project) writes over at Fox and Hounds Daily that newly enacted California Assembly Bill 1889 is unconstitutional.

Brown could not be more on the mark. In 2008, the California legislature had placed a number of protections in a Proposition authorizing bonds for California’s high speed rail line. These were intended as enticements to voters to approve the proposition. The legislature and Governor promised. The people approved. And, now the legislature and Governor have gone back on their promise.

In short, the legislature and Governor have revised the conditions of the proposition, something that requires a vote of the people. With respect to high speed rail (and perhaps other propositions) California has replaced rule of law with rule of men (and women). That this should have occurred with respect to a voter approved proposition is particularly egregious, since such measures (such as initiative and referendum) were Progressive Era reforms, under Governor Hiram Johnson in 1911, intended to permit the people to take legislative authority from the legislature and governor when they felt it appropriate.

Meanwhile, the California high speed rail project has become a legendary “white elephant,” with costs going through the roof and little hope for achieving the promised travel time between San Francisco and Los Angeles.

Brown’s analysis can be accessed here….

Why Intensification Will Not Solve the Housing Affordability Crisis

Analyst Phil Hayward of Wellington, New Zealand provides a provocative perspective on why urban intensification (densification in the urban cores) is incapable of compensating for the huge house price increases attributable to urban containment boundaries. Writing on Making New Zealand for Urban Planning that Works, he notes that “planners and advocates and politicians and even economists, are making an assumption that urban intensification is a potential route to housing affordability.”

The assumption involves changing zoning so that “X number of housing units” can be constructed in existing urban locations “instead of X number of housing units” on pristine ex-urban land. The latter is assumed to be an evil to be avoided, and that the former is a perfect substitute in terms of “sufficient housing supply to enable affordability.

Hayward continues:

Common sense tells us that there are quite a few potential problems with this assumption. For example, NIMBYs will obstruct the intensification and reduce the rate of housing supply so the policy will fail. Therefore, what we need is the removal of NIMBY rights of protest and appeal, and the policy will then work.

Hayward’s analysis suggests that:

And generally, the data runs in that direction - not only does intensification within a regulatory boundary "not restore affordability", it seems that the more density you “allow”, the higher your average housing unit price gets. The correlation runs the opposite way to the assumption.

Indeed, “Paul Cheshire and his colleagues at the London School of Economics believe this is due to the ‘bidding war’ at the margins of each income-level cohort of society, for ‘slightly more space,’" according to Hayward. “But when a market is allowing people to consume "as much space as they want", which has only really occurred in the automobile era, the “bidding war” effect is absent.”

Boston and Atlanta provide powerful examples.

…(The) difference is that Boston has de facto growth boundaries / green belts while Atlanta does not. The ironic implication is that fringe growth containment pushes median multiples up less, when there are severe restrictions against density – otherwise Boston should be the most expensive city in the data, not Hong Kong. The evidence suggests that this is because there is a total absence of “bidding war for slightly more space” - everyone has "more than they want" already. The median multiple of 6 rather than 3, represents the effect of demand for "living in Boston", period, and they simply don't provide enough houses to keep the median multiple down like Atlanta does (in the face of staggering population growth in Atlanta, by the way).

Perhaps the most important conclusion is that “there is no evidence that any city anywhere in the world has ‘freed up intensification processes’ enough to result in floor space being built faster than site values inflate.

The bottom line is a mistaken impression that high density housing “will remain available as a substitutable option to suburban family housing even if the latter is forced up in price deliberately by central planner's policies. The lesson that needs to be learned urgently, is that this is impossible; the two things are inter-related.”    

But when a market is allowing people to consume "as much space as they want", which has only really occurred in the automobile era, the “bidding war” effect is absent. The evidence supports this, with most median-multiple-3 cities being from 600 to 2500 people per square km. Another interesting case study would be Liverpool; it lost approximately 50% of its population from the 1950's to the 2000's (similar to Detroit) - yet its median multiple is over 7. And its density is still 4,400 per square km (presumably it would have been double this, or more, in 1950). This is prima facie evidence that 4,400 people per square km within a growth boundary, are still going to be dissatisfied with their living space, to the extent that they will be engaging in an unwitting bidding war against each other for a little more of it. Of course under these conditions, the lowest socio-economic cohort is denied all options other than crowding tighter and tighter in rented accommodation or even illegal “living space”. In UK cities, rental advertisements include options like a ¼ share in 2 rooms, with communal access to kitchen and bathroom shared by even more tenants in further rooms. In median-multiple-3 housing cities, the same real rent would apply to a whole house of reasonable size and standard. 

There might be other policy mixes by which housing supply within a growth boundary could be made the means of keeping housing affordable, but publicly and politically, the debate is nowhere near tackling the complexities involved.

Center for Opportunity Urbanism: America’s Housing Crisis

This video from Center for Opportunity Urbanism (COU) explores America’s housing crisis --- focusing on the new generation. COU is a non-profit dedicated to preserving the American dream and promoting upward mobility for all Americans. Check out the video and let us know what you think.

Resurrecting the New York Subway

The subway is crucial to mobility in the city of New York. Over the last 10 years, ridership increases on the subway have been more than that of all other transit services in the United States combined. It was not always this way.

In  New York Post article entitled "How Bratton's NYPD Saved the Subway System,"the Manhattan Institute's Nicole Gelinas describes the depths of the problem in 1990, when there were 26 homicides on the subway. Of course, there is nothing more important to civil society than order, and the threat to life and limb on the subway led to a significant ridership loss after 1980.

Gelinas notes that the murder of a Utah youth that year "would help propel Rudy Giuliani into the mayor’s office three years later, as Democratic voters turned to a Republican prosecutor to get a seemingly ungovernable city under control." Gelinas tells the story of how new transit police chief William Bratton brought the subway under control and helped to make possible the highest ridership levels since World War II. Gelninas notes that " Policing played a huge role in making Gotham’s subways safe, as it did in reducing crime throughout the city. In fact, the New York crime turnaround began in the subways, and what the police discovered about violence underground would prove essential to the broader battle for the city’s streets."

Bratton played an important role in this city-wide progress, after he was appointed as New York City's police commissioner by Mayor Rudy Giuliani. His success and is widely considered to have been influencial in the more effective policing strategies that have been, at least in part, credited with much lower urban crime rates in the last century. Indeed, the urban core (downtown) residential renaissance evident in many cities would not have been possible otherwise.