12 May, 2020

Sidewalk Labs is closing down - Lessons from Toronto's realpolitik

Photo by Carr
Don't forget to also look at Mariana Valverde's 
important addition in the comments section.

So, Alphabet Inc. is pulling its daughter company, Sidewalk Labs (sister to Google) out of Toronto. Alphabet, whose „cash and influence encircles humanity” (Lorinc 2020) claims that it too has fallen victim to the Virus. This is a story that will carry well in times of corona, stirring fears that if giants can fall, we must all be doomed. It also demonstrates what underpins corporate urban development. Covid-19 and the associated shutdown caused financial uncertainty that forced Alphabet to reassess its priorities, and check it out: Toronto was not one of them. Perhaps, then, it’s departure is a blessing in disguise to even its most avid supporters, if Alphabet’s Quayside plans were only ever about money, and especially given that the company has a record of abandoning projects half-way through. Its exit is better sooner than later, before construction starts, before lives move in, and before urban socio-spatial (dis)integration takes over.

For an urban studies perspective, to us what was most striking about this whole saga was the hubris of large digital corporations (LDCs) when it comes to engaging with people, cities and real life. Lorinc (2020) was right when he said that not enough attention had been given to the differences between Toronto and New York City politics: Alphabet apparently believed that if you make deals with big government, local politics will just fall in line. Meanwhile, no one warned them of the idiosyncrasies of urban development in general and of the related nitty-gritty details about land-use development and planning in Toronto in particular. Sidewalk Labs set up shop in a city whose politics they barely understood and land use procedures even less. Meanwhile, the Canadian governments at all levels appeared to have no idea what they were getting into, and seem to have spent much of the last two years scrambling for a happy medium where they could both profit and save face. Let’s not forget that land use policy in Toronto for the past three decades (or more) has been about scaling back public institutions and boosting private profit (Bunce, 2017: Desfor & Laidley 2011). The staggering gap—the complete misunderstanding between the two sides—is probably one of the more important lessons for onlookers.

Multi-sided communication deficit
Alphabet’s practice of commodifying data, that is the new logics of accumulation often called surveillance capitalism, was a central critique point. It needed, and still needs, constant attention because remarkably few actually understand it. The GDPR, for example, may protect personal privacy, but it does not protect against surveillance capitalism and platform economics,

“The GDPR’s reach is not exhaustive… Data processing without compliance is still permitted for matters of state security, justice and military matters”
(Aho & Duffield 2019, 18)

These are vague conditions, indeed, easily buried in procurement contracts between governments and businesses. Further, according to EU regulators:

“Companies seem to be treating the GDPR more as a legal puzzle, in order to preserve their own way of doing things… rather than adapting their way of working to better protect the interests of those who use their services”
(EDPS, 2019 p5 quoted in Aho & Duffield, 2019 p.19)

And finally, practices of lethargic enforcement of the GDPR among host country data controllers is raising concerns about regulatory capture and the potential race among EU states to host company headquarters and assume this lucrative role (ibid.). In Toronto, Jim Balsillie, Shoshana Zuboff, Roger McNamee, and a number of residents, scholars, community groups and smaller tech firms (collectively known as Blocksidewalk) loudly slashed the project for its failure to address data protection and public interest. The fight was also taken up by the Canadian Civil Liberties association that filed a law suit against all three levels of Canadian government. The Canadian governments were charged with failing to protect its citizens.

In this context, it is important to note that Alphabet is hardly the only company that can push forward this extractive business model. Further, governments and legal teams are equally capable of generating the necessary jurisdictions and profiting as well.

There is thus (at least) a three-way communication deficit, opening questions that are still not answered: What are, in fact, the arrangements being made between governments and big business? What do these agreements look like and how does each side understand their role? What asymmetries and incongruencies exist alone therein? Also, what modes of communication are happening at the urban planning level? How deep and thorough are these conversations? The saga at Quayside exposed these issues.  And, there is work to do figuring it all out. Bridging this gap, for example, was a recurring topic in a recent post-Sidewalk webinar, entitled, "After Sidewalk, what is the future of smart tech for Canadian cities" hosted by the Canadian Urban Institute. Further path breaking events addressing this topic can be found at the Centre for International Governance Innovation.

Sidewalk has left Toronto. Yet, weak, sloppy and patronizing public communications (see Google’s Dan Doctoroff’s swan song, and the empty-signifier good-bye letter from Waterfront Toronto) have left many wondering what the real reason was: Did Alphabet tire of public political campaigning? Or do they have bigger fish to fry in New York? For sure, we will be keeping an eye on the NYC mayor elections in 2021. Meanwhile statements from the City, the Province, and from Ottawa are still outstanding. Surely (!), there are different reasons in each case, but the outcome is the same: silence. As researchers, we sincerely hope that they will open up for comment.

There is also a more general lesson to be learned for other cases where LDCs try entering the field urban development: It is still necessary to seek out the blind spots. It is still largely unclear what needs to be known, or can be expected, when LDCs go for the urban without knowing how cities actually ‘work’ but are committed to their own interests in maximising power and profit. Dick Walker’s (2018) account of the long-term transformation of San Francisco and the Bay Area under the siege of the digital economy has demonstrated what happens when even an informed community of politically sensitive citizens fall victim to what is neatly framed as “cultural-cognitive” capitalism. Maybe New York City can also contribute to this debate, as it was not so long ago that Amazon.com was forced to retreat from its plans for a second headquarter on Long Island. Comparable to the case of Sidewalk, this was also caused by heavy public dispute over a deal that was initially, and rather secretly, made between political elites and the corporation.

In a paper we recently published in Urban Planning (open access), we concluded our critical exploration of the (post-)politics of the supposedly "smart" digital city as follows:

“While Toronto’s waterfront development as a hub in technological innovation is unfolding as an exercise of politics, perhaps there is a glimmer of realpolitik, as [advocacy] groups filled the discursive void by raising pointed concerns that were left unaddressed.”
(Carr & Hesse, 2020, 79)

Perhaps this is the story that Sidewalk’s clash with the mere urban planning reality also tells us: that a battle between big tech and civil society could also mark a return to the political that cannot, and should not, be simply ‘written off’ (ibid.).

Constance Carr, Markus Hesse

Aho, B., Duffield, R. 2020. Beyond surveillance capitalism: Privacy, regulation and big data in Europe and China. Economy and Society, 1-26. DOI:10.1080/03085147.2019.1690275
Bunce, S. 2017. Sustainability Policy, Planning and Gentrification in Cities, Routledge
Carr, C., Hesse, M. (2020). ‘When Alphabet Inc. plans Toronto’s Waterfront: New post-political modes of urban governance’. Urban Planning, 5(1), 69-83. DOI: 10.17645/up.v5i1.2519.
Desfor, G., Laidley, J. 2011. Reshaping Toronto's Waterfront. University of Toronto Press.
Walker, R. A. (2019). Pictures of a gone city. Oakland, CA: PM Press.

Further Readings at Urbanization Unbound
Carr, Hesse. 2020 New publication in a special issue of Urban Planning (open access) on smart cities
Carr, C. 2019. Urban planning and the theatrics of aggressive scooter companies: This time the City sent the Bird flying
Carr, C. 2019. It matters how smart cites are governed
Carr, C., Hesse, M. 2019. Digital Urbanism and the Challenge of Urban Governance (DIG_URBGOV) – Short Research Summary
Carr, C. Hesse, M. New Publication on Smart Cities in Forum für Politik Gesellschaft und Kultur
Carr, C. 2019 Digital and city development and urban governance in Toronto
Carr, C., Hesse, M, 2019. Some notes on smart cities and the corporatization of urban governance
Carr invited to York University's CITY Institute as a Visiting Scholar, 2019
Hesse, M. 2018. 2HQ2 - Two new seats for the new Amazon.com Headquarters, not one

Carr 2018. Wagering the Waterfront? Angling the abc & xyz of Quayside Toronto
Carr, Lutz, Schutz, 2018 There is no one human scale - Reflections on urban development practice in Luxembourg
Carr/Hesse 2017. The Corporate City Looming? Part I
Hesse/Carr 2017. The Corporate City Looming Part II: The “smart” City competes
Carr 2017. Digital Cities - Toronto trying to get ahead
Carr 2017. Hipsterland in Toronto's East Downtown