Could Uber HQ move to Dallas?

December 28, 2020 by Ted Bauer

It might. Let's follow some tea leaves, hey?

1. Back in June, we wrote about the 2018 relocation of McKesson from the Bay Area to Irving. It's worth noting about that relocation: on November 8, 2018, McKesson executives told the San Francisco Business Journal that they wouldn't be leaving the Bay Area. It was officially announced 22 days later that, well, they would be moving to North Texas. That's a good example of how, often, corporations try to keep this stuff quiet until they absolutely cannot anymore. Oracle announced its recent move to Texas in a SEC filing.

2. We know there is a "Bay Area exodus" going on right now, and it might pick up speed.

3. In the specific case of Uber, as outlined here: The ride-sharing company turned heads in 2019 when it got $36 million in Texas government incentives for what was billed as a “new U.S. general and administrative hub.” That was one of the largest incentives in the past decade to spur economic development in Texas, igniting speculation that Uber's headquarters could be heading to Dallas. In August 2019, an Uber spokesman told San Francisco Business Journal that "we are not moving our corporate HQ and don't have plans to." And yet ... YET! ... in early May 2020, the same Uber spokespeople "declined to comment" on a potential Dallas HQ move.

4. Now, it's worth investigating two things here. (1) is that Uber, while a well-known "disruptive" company, has laid off thousands of people since the start of COVID. While it does still seem to employ north of 18,000 people, it also hasn't ever turned a profit,  and it lost $8.5 billion in 2019. So while it would be a notable grab for Dallas and change the composition of the city and surrounding areas, it's also not necessarily the most stable company ever, despite its brand-name value. The other thing -- (2) -- to investigate as regards HQ relocations is that often, the employee counts have already grown in areas outside of San Francisco. For example, Wells Fargo's HQ is technically in SF. But its largest employee base is in Charlotte, and most of its execs are in NYC. So what's "really" the HQ, right? Chevron is similar. It has 5,187 people in the Bay Area (San Ramon), but 6,989 in Houston. The HQ is officially northern California, but the base is moreso Houston. 

5. What that all means is a "hub and spoke" model could become common around relocations. You are seeing this with Peloton right now. They are still based in NYC, but deeply expanding their Plano footprint. On paper, the HQ might always be New York City, but the employee count in Plano might grow and grow while NYC stays flat or reduces. At that point, what's the "real" HQ? Probably Plano, and thousands moving there to work for Peloton (or stay with Peloton) has a bigger impact on North Texas than whatever moves are being made in NYC. Oftentimes in companies, execs or those who own the brand want to stay in a certain place -- coastal, or near investment partners -- and are OK to have the employees live in other, less-costly areas. You may increasingly see this, which will shift the demographics (and pricing!) of North Texas as a result.

This is a story to keep an eye on into 2021 and beyond.

 

About the Author

Ted Bauer

Ted Bauer is a writer/editor for White Rock Locators focused on as much cool content about the DFW Metroplex rental scene as he can possibly find week-to-week.