Abbott’s office set to kick in $24M on Uber deal

AUSTIN — Uber is opening a new hub in Texas, with a hefty helping hand from the governor's office.

Gov. Greg Abbott has pledged to give the company $24 million from his “deal-closing” economic incentive fund — the second-largest award the Republican has given out since he took office in 2015.

In turn, Uber said it will create 3,000 jobs at a new U.S. General and Administrative Hub in Dallas, the first city in Texas where the ride-sharing app was available, to according to a press release from Abbott's office.

“This investment will bolster Texas’ continued economic success and reputation as the best state for business. Our unrivaled workforce and business-friendly environment makes Texas the perfect home for innovative companies like Uber,” Abbott said in a statement.

The investment from Abbott’s Texas Enterprise Fund is notable for its size, second only to a $25 million incentive his office awarded to Apple last December.

In a statement, CEO of Uber Dara Khosrowshahi, said the company is “excited to bring this major investment to Texas and to increase our commitment to the city of Dallas.”

Nathan Jensen, a government professor at the University of Texas at Austin who studies taxpayer-funded incentive programs, said the one awarded to Uber is mammoth.

“What is striking about this deal is providing such a high per job incentive, especially for a company that has very public financial struggles,” he said. The award amounts to roughly $8,000 per job, Jensen said, higher than the national average of $2,000 to $3,000 per job.

Uber recently announced it lost over $5 billion in the second quarter this year.

The economic fund has regularly faced scrutiny since its creation in 2003, most recently from Jensen, who published a study earlier this year that found companies have been able to secretly renegotiate their deals later on. Some delayed hiring deadlines while others were able to count jobs at subsidiaries toward their job-creation targets, according to the study.

Abbott has made reforms to the incentive program, most notably awarding funds to companies once they reach their goals, instead of at the start. Since 2015 his office has awarded over $100 million in incentives to 43 companies, but has paid out about $4 million to date, records show.