Why Google’s Toronto Smart City Failed
Paris Marx is joined by Josh O’Kane to discuss how Sidewalk Labs decided to build a city “from the internet up” in Toronto, the concerns that existed with the project, and why it ultimately fell apart.
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Paris Marx: Josh, welcome to Tech Won’t Save Us.
Josh O’Kane: Thanks so much, Paris, so excited to be here.
PM: I’m really excited to chat with you to discuss some happenings that have been going on in Toronto the past five years that I think many of the listeners will have heard about and be pretty familiar with. Certainly, Bianca Wiley has been on the podcast before, so they’ll be familiar with her and her experiences with the Sidewalk Toronto debacle. But I want to start by getting some kind of foundational information for the listeners before we get started. Sidewalk Labs is really key to this whole project. It’s the partner that comes into Toronto to try to set this up. But where did Sidewalk Labs come from? How did this whole company in this endeavor get started?
JO: Sure. So at the beginning of the 2010s, Larry Page, the co-founder of Google ascends to the role of CEO, which he had previously absconded to Eric Schmidt while the company was in its development phase. Larry Page is obsessed with Nikola Tesla and wants to constantly innovate — he’s not really happy doing one thing. As a result, he establishes this one group that’s doing research over these things called moonshots. He wants to figure out how he can do 10 times better than anyone else at a bunch of different things. And if he does a few of them, hopefully, some of them could be the next big multitrillion-dollar market opportunity for Google. A few things happened over the 2010s. There’s one point where people were reporting that Larry and Sergey Brin, the other co-founder of Google, aren’t talking anymore. And it’s over that very strange, conflicting period that another secretive group within Google emerges called Javelin and they are exploring things even more intently and intensely.
One of the things they want to explore was cities, and with a small team, a bunch of people started to figure out: How can we disrupt cities? They’re thinking: What happens if we build this regulation-free, dome covered city on the sea, where we can experiment and figure out all these patterns about city living so we can invent these new technologies to make life better for people? They try all this, but they realize there are, in fact, laws at sea. Things kind of come shrinking down. They wind up spinning this out as a separate company called Sidewalk Labs. They bring in the former New York Deputy Mayor for economic development aims, Dan Doctoroff, who is a sort of a stalwart in the early part of the Bloomberg administration of New York. He was also a key campaigner — he tried to bring the Olympics in 2012. Doctoroff is very good at getting very interesting, very moneyed people in a room to try to bring projects forward. So they form this company called Sidewalk Labs. It’s about 2015 when this starts getting formalized.
Their first vision for what they want to do is to bring cities together, much like an Olympic bid, and asking cities to bid on the privilege of working with Sidewalk Labs, so they can build a neighborhood of the future. They do these case studies in Detroit, Denver, and in the Bay Area. They develop all these potential ideas and case studies for technologies. They’re still thinking about a dome in order to reduce the needs for heating and cooling individual buildings, sort of a more passive climate control dome, they want to have these very specific masterplan neighborhoods. They want to really focus on building buildings out of prefab modular building parts, primarily made out of wood, to lower the carbon intensity of the built form. Over time, they’re thinking about putting robotic taxis and these sorts of things to efficiently deal with waste and sort waste, and to develop new technologies. One of the things that they were talking about at this time was: Well, why don’t we equip apartments with smart mirrors so they can detect if there’s something wrong with your blood flow today? Maybe you have this coronary issue. These technologies exists, but they have not been implemented for a variety of reasons.
PM: Yeah, I’m not sure I want Google behind my smart mirror.
JO: And yeah, so they catch this big idea in mid-2010s back to Larry Page, this moonshot group that they’re trying to bring in. Depending on who you talk to, Larry Page either really liked it or did not think the ideas were innovative enough. Sidewalk Labs, this company that brought together all these really interesting urbanists and really interesting technologists, were coming up with interesting ideas, but executed in a way that, in hindsight, I think a lot of people would frame as dystopic rather than utopic. They are left rudderless in mid-2016, according to many folks that I spoke with.
At that exact moment, this somewhat obscure government agency in Toronto called Waterfront Toronto, unless you’re a really big Toronto urbanist, you don’t necessarily know about their work, but their job was taking the sort of post-industrial hollowed shell of a waterfront and making it more livable for the city. They got a new CEO — he’s this really ambitious guy and sees a lot of himself in what Sidewalk Labs is doing in terms of their ambitions around sustainability and working with the tech sector. He is trying to figure out what he wants to do with this little slice of 12 acres that this obscure agency actually owns. Normally, they’re developed on behalf of other governments. One of Dan Doctoroff’s former employees emails Dan Doctoroff. He happens to be working for Waterfront Toronto, and he says, and I’m paraphrasing, “My new CEO is very interested in your work, we should talk about this new project that we’re launching.” Then a year and a half elapses, this project winds up opening to a competitive process, Sidewalk Labs wins the competitive process. In October 2017, this company that just a year and a half earlier was left in this weird lurch, post a very strange meeting with Larry Page, now suddenly has the privilege of planning this neighborhood of the future on the Toronto Waterfront. And that was how everything began.
PM: Yeah, I think that’s a really good encapsulation of that early period leading up to when the company gets into Toronto. I want to dig into a few details of that before we get to what actually happened when the whole process started to roll out, and they really needed to show what this neighborhood was going to look like. But I want to go back to Larry Page for a moment, right? Because there was some really interesting details in the book about how he has these ideas about transportation early on, he wants to develop a Monorail in Ann Arbor that has these individual pods for people to use. He is not a fan of high-speed rail, doesn’t understand how people would be attracted to that form of getting around. So how did these ideas that Larry Page has personally influenced the direction that Google goes in seeking out its ideas for transportation and for cities?
JO: I think if you look at that clash that you’re inferring to, and where things went with the whole Sidewalk Labs saga, even internally there were a lot of clashes between urbanists who really love the idea of densification, and the benefits that come with sustainability and transportation, and the extraordinary individualism of Silicon Valley, and in particular, the most moneyed individuals in Silicon Valley, and the philosophy that is entrenched there. So this Ann Arbor Monorail pitch that Larry Page originally came up with in the 90s, but was still very quietly pushing as late as 2009, when he was giving a commencement speech to the University of Michigan. This was a Monorail. He was standing in these bus shelters wondering, “How can I get out of this? Everyone else is driving a cozy car, I’m a student, I’m waiting for a bus, what if I come up with a solution?” It was the idea of something more easily attainable, this collective notion, but he proposed a more individualist idea in response to that, which is individual pods, rather than the idea of a standard rail line. And that philosophy is carried all the way through.
When I spoke with individuals who were working with Larry Page at this time, that streak of individualism, in some cases, it was described to me more like libertarianism, really ran through a lot of Larry Page’s ideas. He was really trying to think outside of the box, he didn’t really want that much density, but he wanted movability of buildings, buildings on wheels was an idea that both people were telling me and had been previously reported. These are some ideas about the cities of the future that are not necessarily reflective of how cities are actually built because of the nature of democracy and people coming together and having consultations and thinking about the slog of process.
PM: Yeah, I guess it’s also kind of the perspective of this really rich guy who’s in the Bay Area, and the really suburban part of that, and not really wanting to be in the city himself, but wanting to find some way to make these things sort of work. And it makes me think, when you’re talking about his Monorail project, we often see the kind of memes and GIFs of Lyle Lanley, the Monorail guy from The Simpsons, being used to criticize Elon Musk, but I guess Larry Page is more appropriate for that kind of criticism.
JO: And in fact, Larry Page and Elon Musk are friends, or at least were in the mid-2010s, when all this was happening, and they were quietly dishing about each other to other individuals. So that that checks out, I think.
PM: No, it makes a lot of sense. When we’re thinking about the ideas that Larry Page is putting forward and that Sidewalk Labs is later adopting, you talked about this really libertarian strand, this desire to build new cities and to really have few regulations on what the cities could do. You talked about how there was a real inspiration in looking at what Disney had done previously in Florida in getting a real particular regulatory structure that allowed it to have a lot of control over the land that it governed. What was that inspiration? What did they like about the Disney model that they wanted to see adopted in whatever they ended up building in the future?
JO: So, when the Walt Disney Corporation started buying up land in Florida, as it started to build that its empire there in the 50s and 60s, I believe, they effectively worked with Florida legislature and created a district that’s governed by effectively a Board of Directors made up of the largest landowners — and who are the largest landowners, but Disney and its affiliated corporations? As a result, they’re able to administer as much as possible about this land. This really influenced what Sidewalk Labs was looking for at the time. They were seeking powers over, not necessarily complete control of everything, but powers involving the police force, and, in particular, taxation. They wanted power over that in order to be able to — I presume — to finance a lot of these ideas that they wanted to do, to take a different view of how cities work. They very much wanted to put as much of that control as possible into the corporate power of Sidewalk Labs. Again, this didn’t happen with Sidewalk Labs. This was a series of ideas. But, this was a massive 437-page document that Sidewalk Labs has since taken a bit of a revisionist framing and saying that this was just a brainstorming exercise, but dozens and dozens of people spent thousands of hours putting this together. It was fundamentally a very good philosophical icebreaker, I think, for understanding how the organization really first saw itself and its genesis.
PM: For people listening, as Josh was describing that, he was holding off like a massive tome of a yellow book, which is what contained, you know, many of those ideas that Sidewalk Labs was pushing. Before we get into the Toronto aspect of this, you also talked about Dan Doctoroff. Can you expand a little on his role in this and the approach that he takes to cities and to major projects that he really used in the past when he was working on the Olympics bid and in the Bloomberg administration in New York City, and how these ideas were also brought to Sidewalk Labs and its approach to things?
JO: For sure. Dan Doctoroff was a pretty divisive figure in recent New York political history in that he did really speed up a lot of projects that had been languishing for decades. New York’s got 520 miles of waterfront — a lot of it was still in this post-industrial haze, much like Toronto’s was when they first came to town. Doctoroff saw it as his mission to rethink how can we push through and redevelop, as much as possible, with an eye towards the Olympic Games, which he, prior to becoming Deputy Mayor, had already been trying to work on a bid for and bringing a lot of the private sector together to do a lot of fundraising. And then as Deputy Mayor, he intertwined these goals of economic development and also preparing the city for the Olympics. And he was known from the news clippings that I read in his time there as well, even in his own memoir, as someone who really pushed things through.
A lot of people drew comparisons to Robert Moses, the juggernaut of New York politics, who was never elected but completely reshaped the city, plowing through literal whole communities just for the sake of reorienting New York towards the car. He’s gotten a lot of comparisons, though he didn’t quite literally plow through communities to the same extent, but one of his big legacies is around zoning. There have been a variety of academic criticisms of his approach to zoning that actually argue that, in certain cases, existing wealthy neighborhoods with a larger, whiter and more wealthy demographic had preservation attached to them, whereas other ones that might have been lower-income were filled with more minority populations were more likely to be zoned in such a way that we’re getting the greater density the city needs, but at the expense of people who are less privileged. There were a variety of criticisms leveled towards the administration around it zoning that he takes a lot of responsibility for personally, because he believes that the zoning in New York was archaic and tried to really rezone much of the cities so that redevelopment could happen so they could get more bigger buildings.
So he was trying to densify New York, he was trying to get more affordable housing — the way he went about it was quite divisive. And you could also argue that it wasn’t enough. New York during the time, particularly during the entirety of the Bloomberg administration, is where the math has largely been done. He was Deputy Mayor for the first half roughly of that. He argues that he took, what I believe to be, a record amount of either the preservation or the creation of affordable housing, and yet New York, actually, on the whole over the course of the whole Bloomberg Administration became significantly more expensive to the average person, where the average rent burden went up and shot up to, I believe, more than half the population had what’s considered an untenable amount of their income going towards rent or mortgage costs. Even though he had a number of positives towards working towards affordability and densification in New York, he left a lot of frustrated people in his wake. And it can be very strongly argued by some of his opponents that he didn’t do enough.
PM: I think you’ve described it really well. And of course, one of the things that stood out to me as I was reading your book, and it reminded me, you know, reading this in the past was how Hudson Yards this development that is very wealthy, is very focused toward a particular part of New York benefited from financing or funding that was supposed to be going to less well-off parts of the city, but were then funneled into this project for the wealthy. So in your earlier answer, you brought us up to October of 2017, when this announcement was being made, that Sidewalk Labs was chosen by Waterfront Toronto in order to develop this small 12 acre parcel on the waterfront that was called Quayside. At that announcement, you have Justin Trudeau, the Prime Minister of the country, Eric Schmidt, the CEO of Alphabet, or maybe it was Google at the time, I can’t remember, the Mayor of Toronto is there, the Premier of Ontario, Dan Doctoroff is there, they’re all making this big kind of announcement. They’re all excited about what’s going to happen here. What is the mood when this announcement is made among these people, but also among the broader public? What are people thinking when this deal is announced?
JO: It depends on what kind of person I think you are, if you’re a person who likes to be adjacent to greatness, which a lot of Toronto is. Toronto is, as a city, very interested, I think, in these kinds of partnerships. And as a result, there’s a large amount of the chattering class that is very happy when this comes in, because it’s solves a lot of economic development issues without actually necessarily putting in the work on a local level. So from an economic development perspective, a lot of people locally really considered this a win. I mean, Justin Trudeau himself called it extraordinarily exciting, which set off a lot of conspiracy theories because this was a fairly tendered contest according to [Waterfront Toronto], though there are a lot of suspicions around it. I spent years investigating this, the Ontario Auditor General spent a lot of time investigating this. But it’s still set off a lot of conspiracy theories about what Justin Trudeau’s role was in all of this, which probably distracted from a lot of the bigger picture questions about what the consequences are of this kind of public-private partnership. But then immediately, you have a lot of people who are also asking the questions like: Wait, how did this happen? And what are the consequences?
This is a company that has completely single-handedly until Facebook, then it was two-handedly, reshaped the economics, if not shaped from the beginning, the economics of the Internet, largely through the collection of data, of the kind of traces we leave walking around online. Well, if we’re walking around a real city, we are leaving around whole new kinds of data. This could be presenting an enormous amount of privacy concerns — as well as from an economic development perspective. This is wealth that could be generated by a large American corporation by data that’s created by Canadians, and who should get the economic benefit out of all that? So you’ve got a lot of centrists who are very much economic nationalists, or how I refer to them my book, where they’re like: Wait, what the hell are we supposed to be? Is this going to be supporting the local economy? Or is this going to take all this intellectual property and is it going to be benefited from in the United States? And you have a lot of other people who are saying: Well, what’s this supposed to mean for my privacy? I mean, this is such a data collecting oriented parent company. And then there’s the broader issue that people like Bianca Wiley, as you mentioned earlier, were starting to bring up very quickly, which is: Is this a question about privacy or is it about privatization of government services? Who is going to have a say in what is being developed here in this extremely valuable piece of redevelopable real estate at the center of one of the biggest cities in North America? Who’s going to get a say in these decisions? And how much of that is going to go to the private sector? What does that mean in the democratic context?
PM: Yeah, and these are really important questions, and I want to return to them in just a second. How long does it take for that kind of activist contingent, for that kind of critical voice to really take hold and start to have consequences for the project? Is this something that is really present in October or November of 2017? Or does it take a while to really kind of get its legs and take off?
JO: The criticism of the project started out in more generalized terms. If I’m thinking with the average Torontonian, you’re going to have individuals who are very often thinking about the ways that governments interact with technology companies, people like Bianca Wiley, who within weeks was showing up on talk shows, explaining what the real consequences of this could be. It took eight or nine months for the substantive concerns to really enter the public mind. That doesn’t mean that people weren’t discussing this. Some of the first news articles were about the privacy consequences of all this. A lot of professors were immediately raising those issues and raising the issues about is this going to involve the privatization of government services. But it takes about eight months or so when, in the summer of 2018, mysteriously the CEO of Waterfront Toronto resigns. And as I report in the book, a lot of individuals were concerned about how organized he was or perhaps how excited he was about this partnership, that some of the details that the people who worked with him, were concerned about some of the details. So out of nowhere, the CEO of the government organization that brought Sidewalk Labs to Toronto resigns. A lot of people were like: Well, what does that actually mean for the partnership? What does this mean for the government’s stewardship of what’s supposed to be a public-private partnership? Where’s the public part of that?
Then in quick succession, you lose a handful of project advisors who are really concerned about the substantive nature of this project. You lose John Ruffolo, who is one of Canada’s most well-known venture capitalists, a huge booster of the local tech economy, resigns because he is frustrated about having to sign an NDA, because if there’s things he wants to criticize, he wants to criticize them loudly and clearly. He is walking away. Then Julie Di Lorenzo, who is on the board of directors of Waterfront Toronto, winds up resigning because she’s worried about the voice that Waterfront Toronto could have in its conversations with the governments that sort of fundamentally own this agency. At this point, that is when the controversies go from more like what could happen to what is happening. And that is when you started to see a lot of people started to raise concerns about: Oh, what is happening in my city like this? People who were originally starting to think: Oh, this is going to be an interesting, smart city, maybe this is going to be great for affordable housing, or making the waterfront more accessible, are starting to wonder: Wait, what are all these people doing leaving this organization?
PM: It certainly presents a lot of questions, right? When you’re watching this happen, and when there’s also already probably some concern about a major company like Google coming in, and what’s going to be the implications, even though Sidewalk Labs is kind of an arm of Google, but still Google, ultimately. So for me, when I was reading through your book, it seemed like the concerns about the project really fell into two kind of broad categories. And you’ve outlined them just a few minutes ago, right. And the first of those is really around data collection, around privacy, around the implications of possible surveillance that this project presents. So what were the concerns around that? You know, what were the kind of proposals that Sidewalk Labs was making that got people concerned? And how were their kind of responses to that unable to address those criticisms?
JO: Yeah. So what’s really funny is that Sidewalk really was responsive to criticism. Out the gate, they bring in Ann Cavoukian, the sort of founder of this framework, and she, internally, is hired as a person to hold them to account about privacy and can be an attack dog when she wants on media and online if she wants to, and basically says: Listen, no, I’m not letting them do anything if we are not going to de-identify data from the jump. We’re not going to let them collect anything that would harm your human right by eroding, at the beginning, privacy. She was very careful about all of this. But then in October of 2018, Sidewalk comes out with its data governance proposals, where they want to create this new term called Urban Data, which was this very confusing term of new kinds of data that you generate when you go around the city. But it’s also like the temperature, not necessarily temperature, but sort of outdoor conditions, monitoring environmental conditions, but also people’s actions, sometimes in semi-private spaces like lobbies and buildings.
Again, Sidewalk is promising to de-identify all this and embed privacy as much as possible. And the two areas kind of start bashing their heads, privacy and privatization. People started getting frustrated that Sidewalk Labs is proposing a policy idea in the first place. Because the idea of Urban Data doesn’t exist for the Canadian legal framework. And I started calling all these privacy lawyers, they’re like: We don’t understand, this doesn’t exist. And it’s okay if you want to present this, but generally, a government is going to try to determine this, and then you can work within those strengths. And that wound up blowing up, a couple of people started threatening to resign, one person did resign, not necessarily over that, but adjacent to that.
People started getting very concerned about what Sidewalk’s role might be in making decisions that people would likely want their governments to do. A lot of these arguments were made very eloquently by Bianca Wiley. If you are the vendor, so to speak, like why should you set the terms with which you can play? Which is, you know, generally very sort of boring public-private partnership jargon, but it’s very consequential to who benefits both from a legal and wealth-based perspective. You know, these are pretty heavy questions. In the end, and this is one of the things I want to make clear is Sidewalk didn’t wind up building anything. So these things were only ever debated in theory. And I think one of the benefits of having to think about this project in hindsight is we can think about what questions we want to ask in the future of cities. Just as a reporter, this is me always trying to give the benefit of the doubt to individuals. Sidewalk Labs didn’t do any of the things that it was necessarily accused of. It kept proposing ideas and it was the ideas that proposed but didn’t necessarily execute that constantly got it into the controversies that it did. Even though none of this happened, I think, it will serve as an interesting lesson for cities and governments going forward, trying to figure out how they want to think about technologies of the future as they get embedded in cities.
PM: It’s a really good point. And I want to come back to it in just a second because it relates to something that I want to talk to you about. But I want to get to that kind of second category first, right? And I feel like that, as you discussed, is really around questions of privatization, right? Like, who’s going to control these things that are happening around land and who’s going to own and control this land is really key land on the waterfront, and also have control right, who actually has control of what is going on here? Who has the authority over what is happening? What were the concerns that were leveled in terms of what Sidewalk Labs was proposing on those sorts of questions? We talked before about the interest that the organization and some of the people higher up in the organization had around getting more powers from government in order to administer, you know, the territories that they have control over. What were the concerns there?
JO: So in 2019, the National Observer and Toronto Star get access to the slide deck that is an internal Sidewalk Labs slide deck that shows that they want to have powers over more than just these 12 acres, that they’re interested in accessing more of what Toronto calls the Port Lands which is an even more industrialized, confusing area that’s immediately adjacent to downtown that is sort of like this hodgepodge of film studios and a concert venue. It’s adjacent to downtown and yet, it’s almost like an industrial park. The city has been trying to figure out what to do with it for years. It’s not really within Waterfront Toronto’s purview, but internally and without Waterfront Toronto knowing, they’re talking to their parents at Alphabet about what they’re planning on doing with this land. I also want to clarify here that the company made it very clear they wanted more than 12 acres, and they believed right from the beginning and wrote it down in their response that they did make public that they always wanted more than 12 acres. They sort of described it constantly as the Eastern Waterfront in Toronto, we call it the Port Lands, it’s the same thing fundamentally. They were very clear about this. But this leak, that they were actively talking to Alphabet about it, creates an enormous amount of concerns, and this is where a lot of the people who were opposed to the project rally around.
Within like a week and a half or two weeks after this story comes out, they create this entity called BlockSidewalk where they’re trying to centralize their concerns. In part, some of the people, not all of them involved, somewhat modeled this after sort of group of opponents in Berlin called Fuck Off Google! What I always joke that writing a book is great because you can swear as much as you want in a thing that will be in libraries. But some some of the individuals involved sort of modeled it off of Fuck Off Google! which was part of a broad contingency of opponents to a startup campus Google was proposing for Berlin, that was successful in sort of basically making Google back down, and they wound up paying like 14 million Euros to these two social organizations to take over the space. This sort of idea of well, how is Sidewalk Labs going to get powers over this land, really centralizes a lot of opposition to the project that had been somewhat disparate before. And it galvanized a lot of people. lf you are thinking in really esoteric terms, as much as I would imagine that people who follow this podcast and who read the book very much understand what the consequences of the privatization of public matters is, that is esoteric to the average person. But Toronto is and has been for many years now in what is functionally a real estate crisis, where every square inch is commoditized. And if some of the most valuable land in all Toronto is suddenly up for grabs by this organization that people were already questioning in the first place, that is a much more tangible controversy for a lot of people.
Even just yesterday, I was actually like onstage at a conference with people from literally both Waterfront Toronto and BlockSidewalk. And you know, even though I interviewed them all for the book, I was talking to Thorben Wieditz, from BlockSidewalk. And the idea of more land, he brought up, is also a greater opportunity for data collection. There’s more possibilities for sensors and more people walking around, there’s a greater data pool that could then be used to identify patterns, and you know, monetize things in an even greater way. These were a lot of the concerns that’s really started crystallizing in the public’s mindset in the first half of 2019. And then, in June 2019, the company puts out it’s four book long, 1500-page draft masterplan, where they crystallize a lot of these ideas. They reintroduce this Urban Data category that many, if not most, if not possibly all of their independent and government privacy advisors have warned them: Please don’t say this, this just doesn’t fit within the framework of Canadian law. They bring this back, they crystallize how much land they want more power over. I want to be careful in saying they didn’t necessarily want to build over all this land, but they did want powers over and potential financial gain from land 16 times as much land as Waterfront Toronto had given them the right to in its competitive process — even more than the Waterfront Toronto had the power to actually hand over.
And so this draft master plan, though, again, filled with a lot of very progressive looking ideas, and genuine ideas for the future of cities, was presented in such a way that pretty much everyone on any part of the political spectrum got frustrated at. With the exception of the individuals who saw it as a great economic booster, there was something in there for everyone to like, and there was something in there for everyone to hate. And in general, my reading of everyone that I spoke to is people leaned more towards the controversy side of it.
PM: One of the things that I remember being a concern is that, you know, these technologies, even if they were restricted to the 12 acres of Quayside, you know, these technologies would get implemented there, but then slowly kind of seep their way into the rest of the city into other kinds of systems that existed. But I’m happy that you brought up the Master Innovation and Development Plan, because I wanted to get to that because you were talking earlier about how sidewalk was responsive to some of these criticims, especially around data, right. But it seemed like again and again there was maybe even a tug of war within the organization, where on one hand, there would be kind of responses they were listening, but then the sorts of things that they were supposed supposed to have addressed or gotten rid of, then keep showing up again. For example, in the innovation plan, the master plan, where concepts that people thought had gone away, were done with, then reemerge once again. And it’s like, they’re not listening to the people who they’re supposedly consulting with or who they say that they’re listening to.
JO: Yeah, a lot of people that I spoke to who were consulted were concerned that they were and they multiple of them use the phrase window-dressing. And if you actually like read Dan Doctoroff’s memoir — I might be the only person other than him who’s read it twice — he very much admits that he will bring a lot of people together for the sake of creating the idea of unity around something and creating the idea of ownership, which maximizes the ability for those ideas to sail through. It’s very much a corporate boardroom tactic. And that was very much I think, sort of scaled up to quite a large size with this project. And with this MIDP as everyone referred to it and you called it by its proper name, I just call it the Draft Master Plan because the more words I use, the more I find people fall asleep when you talk about these sort of legalese things.
PM: A long term, or a long name rather.
JO: Yeah, a lot of the concerns that people had about that they crystallized in such a way that no one was happy, and they brought people together that you wouldn’t necessarily expect to come together. So one of the things that I’m glad I did the book for rather than just sort of do the news stories from the newspaper and walk away, a theme really starts building up when you study this much more closely in sort of an investigative way. Alphabet was telling things to its parent company that were different than what it was telling to Waterfront in some cases. And one of the things that shifted and that people told me within Waterfront was that this was an organization and a project where Dan Doctoroff would constantly go up, he was working the hotel ballroom circuit, the C-Suite circuit, and just talking to everyone we could. He kept talking about this phrase the “patient capital” of its parent company — the idea that alphabet had so much money that they didn’t need an immediate return.
But then, as you move towards the end of the project, it becomes a lot clearer both in the patterns of their decisions, but also, as we move towards 2020, towards the project’s eventual cancellation, Dan Doctoroff is there saying this: This is a project that needs a return, this needs to profit. Alphabet is a publicly traded organization that owes profits to its shareholders, that is how its governance works. Tthat narrative became more and more clear — he was always talking about: Oh, we have patient capital, we can take our time, we can invest this and not need a big return right away to our parent company expects a small return, doesn’t need to be a big return. And if you use that as a backdrop of what you’re seeing, particularly through 2019, you can sort of see this as: Okay, well, this Master Innovation Development Plan was viewed, including by people inside Waterfront Toronto, as, even if they don’t get what they want in Toronto, they now have a catalogue of things they can sell to other cities. And it becomes more and more clear that this is not necessarily something that is geared towards Toronto, but that Toronto is a backdrop for them to sort of work out these details in real time, which frustrated the government organization that had signed up to deal with all this, then lost the CEO that helped them sign up for that. And they’re trying to scramble to bring this back into the public interest. And they are getting increasingly frustrated with this kind of approach, because they wanted something that would work on the 12 acres that they had given them a contract for.
PM: You can definitely understand that frustration, right. And you talked in the book, how it was like, even though there were these negotiations between Waterfront Toronto and Sidewalk Labs, that it was really a three-way negotiation going on, and Alphabet was kind of in the background. And you knew it was always kind of there, right? The project, as we know, ultimately gets cancelled in May of 2020. And then in the book you explain that near the end of 2019, there are changes within Google itself, where Sergey Brin and Larry Page kind of stepped back from their roles. That leads to less of a desire within the organization to fund these moonshots. You know, we’ve already talked about the activist pressure that was there. Certainly we know that COVID-19 really hits in March of 2020 in North America. What ultimately leads to the cancellation of this project? Is it one of these specific things or is it the mix of it? How would you explain it?
JO: I would apply this instinct to any corporate statement that I get, which is that when a company issues a press release with a massive piece of news that there’s more than what they’re writing in the press release, especially if they’re not going to give interviews that day. The argument of the press release, when Sidewalk Labs left in May 2020, which was that the economics just didn’t make any more sense on the 12 acres of Quayside. Journalistically that just set off an alarm in my brain: What does this actually mean? What really did cancel it? And the funniest thing about it is, you know, after like two and a half years of investigating after that for the book, is that it was really what cancelled the project. But there’s so much more context around that, and it kind of comes down to everything that we’ve already talked about, which is the economics didn’t make sense on 12 acres, particularly during the uncertain, early days of the pandemic. But that was only because Sidewalk had been hoping that they would get more than 12 acres in the first place. And people in October 2019, after this sort of form of long battle over this Draft Master Plan, people inside Sidewalk had already been scrambling to figure out how to make their numbers work on the only plot of land they had ever been promised.
And if you look carefully at the language the Sidewalk was using and the letters exchanged, which I’m not asking your listeners to do, trust me, I’ve read the boring letters. But if you look at the language that was used there, it’s very tentative, it’s very careful. And it really kind of underlines that the economics of the project were probably never going to work on 12 acres to begin with. I can’t prove that necessarily, but the many, many, many people that I’ve spoken to, and the documents that I’ve read, really suggest that in order for this to financially work for them, and there is an increasing amount of pressure for this to financially work for them, as Larry Page and Sergey Brin stepped down, they would have needed more than 12 acres to scale these technologies. And from a technologist perspective, that does make sense. You want to scale as widely as possible to test things out to make sure things work, that you’re not just putting in like one traffic light at this sort of like meagre 12 acre site, and trying to figure out traffic patterns that might help you develop some new IP that can change the world. You can’t do that on 12 acres. That makes sense. But it was still all they ever got.
And even though, and we do not need to get into this, but there was a constant tug of war between Waterfront Toronto and Sidewalk Labs over what the original request for proposals was even for and Sidewalk always insisted that there was a greater chance to get access to more than 12 acres than Waterfront Toronto ever said publicly. Fundamentally, Sidewalk Labs was already kind of hanging by a thread to try to make the math work on 12 acres. I think they could have, but the pandemic actually did tip the scales just enough that they walked away, which is funny that like my journalistic instinct of ‘I need to investigate this,’ wound up coming all the way around to the same thing. It just takes a lot of context to explain that it is and both isn’t because the economics of 12 acres and a pandemic doesn’t work.
PM: It’s so fascinating to think about how it leads up to that moment. As you described in the book, how these two kinds of organizations are kind of going back and forth as to what was in the initial proposal, what they were actually offering, and like, you know, sidewalk, kind of picking their pieces of it to show actually, it was about something bigger. I think this has been fascinating. And I want to close with a few kind of broader questions to close the conversation. You know, you talked about what was going on in Berlin, and you obviously went over and reported on that as well, the opposition to the Google campus that was going on over there. But you know, at the same moment, as this controversy around Sidewalk is happening; what’s happening in Berlin with Google is happening; there’s also the opposition to Amazon’s second headquarters that’s planned in New York City, and the whole process around that, the subsidies it’s supposed to get; there’s opposition to Apple stores that are planned for main squares in Stockholm and Melbourne, and they end up getting cancelled. What is in the air around this moment that is leading to this real backlash against these tech companies who are really trying to make a footprint in these cities around the world?
JO: I think people are realizing what was missed in the development of the economics of the Internet, which is that in the data that we generate, we get very little say in how it is used and how it is monetized. And this is what I wrote about. When I tried to sort of draw these threads together, as all over the world, digital technology companies are starting to push into the physical world around us. That’s going to have consequences — people are now recognizing that more than they did with the digital economy. I think with hindsight, and the Cambridge analytical scandal blew a lot of this open for the average person. These are concerns that existed among, you know, a lot of factions and people who took their activism activism very seriously. But it didn’t reach, necessarily, a broad collective scale, it was probably sometime in sort of mid-2018. And with that benefit of hindsight, and with the recognition that these companies are taking the sort of many, many billions and trillions of dollars that they’ve generated in the digital world and moving into the physical world, people are starting to question it at a scale we haven’t seen before. And as a result, you’re seeing opposition to what’s being done by Google, and what is being done by Amazon. And to the extent that you’re just describing, you know, Apple stores, as well. How does that change the built world around you and who do you want to have a say in the future of the cities you’re a part of?
PM: It’s a really good point, right? Because a lot of this stuff happens at a similar moment as, you know, the so-called ‘Techlash’ is kicking off, Cambridge Analytica in 2019. So it’s this moment where there’s this real turn and reconsideration of the impact of tech and tech companies in our world and in our cities as they’re trying to move into that physical world. You talked about Justin Trudeau, who was certainly a figure in this or that people talked about in relation to it more broadly. When the Liberal government, under Justin Trudeau, came to power in 2015, it seemed like there was a real desire from them to be close to tech companies, to show that they had a good relationship to tech companies and that they were attracting more of them to Canada. Even with the Sidewalk Toronto project, Justin Trudeau appeared at the announcement and was really excited, said him and Eric Schmidt had been talking about it and wanted it to happen. But in recent years, it’s been clear that, I think, Trudeau and the Liberal government have been wanting to be a bit less close to the tech companies, not wanting to be at those announcements all the time and show that they’re close to these giants, as public opinion has changed. What explains that shift? And what role did the Sidewalk Toronto project play in it?
JO: Yeah, it’s funny, I wound up writing about this probably six months after the Sidewalk project ended in the first term of the current Federal Liberal government. There was very much a conflation between progressive politics and progress in technology. But progress in technology, in a market economy, fundamentally re-entrenches wealth in a lot of ways. But the idea of progress in 2015, prior to the Techlash, to a large number of individuals, it very much was: Oh, that’s going to be the coolest job, you’re going to be the forefront of what is interesting in new developments in society. And in terms of sort of how governments dealt with it, this seemed like a real easy economic development play. But I’ve read like 1000s of pages of email chains and memos from Canada’s Federal Government. And there was very much a huge excitement, from a Federal economic development perspective, of courting these companies to bring great jobs and really make Canada a tech hub. Part of this, from my conversations with individuals who a part of this was, this was a bit of a response to the Conservative Government that had governed the country for roughly a decade.
Prior to this, Canada is a country that is built around resource extraction. And this is a lot more progressive seeming and sustainable than that. And it was a great opportunity to sort of align yourself with these organizations. Then the ‘Techlash’ happened, then Cambridge Analytica made a lot of people more skeptical of technology companies. Eventually we started talking to people within the government, my colleagues and I at the Globe and Mail. The Sidewalk Labs and Cambridge Analytica were what made Canada’s Federal Government kind of take a step back and rethink what they were planning on doing. And then by late 2020, they introduced like six bills in a row to try to regulate the Internet and sort of restrict the power of large technology organizations. A lot of those bills wound up getting stalled in Parliament as the Government forced another election, and a lot of them are continuing to stall, not stall, but very slowly going through Parliament. So there were major shifts, but there was almost a bit of a lag time following the Techlash in terms of just actually introducing policy to address how big technology companies are interacting with people in Canada and the Canadian economy.
PM: One thing that stood out to me is that you talk about that lag, I feel like Canada has really been behind in taking some of these more regulatory approaches to the tech industry as compared to some other countries out there. To close off our conversation, the Sidewalk Toronto project hasn’t just been canceled, but Sidewalk Labs itself is no more. It was wound up and some of its pieces were absorbed into Google itself. What has this project, and I guess this larger moment that we’ve been talking about, taught us about tech’s approach to cities, and why they seem to keep failing?
JO: There’s a philosophical difference between what underpins the technology economy, and what historically has led to cities that people are happy with. Tech often brings a top-down approach to how decisions are made. And cities, when done well, when done with the sort of least amount of criticism and most amount of happiness, are generally bottom-up organizations where people decide what’s happening. And what we saw with Sidewalk Labs, and what we saw with the Toronto saga, was a debate from those two very different perspectives of who gets to have a say in the future of cities. Nothing got built, everything was only ever in theory, but I think it’s a really interesting lesson for how we want to approach the way technology is embedded in cities because it’s going to happen. And if there are any lessons that can be learned about how things worked, and hopefully my book will be a good guide for that.
PM: Yeah. And hopefully, we can ensure that the way that technologies are implemented in cities is a way that serves the public and the people who should be benefiting from these things and not just a company like Sidewalk Labs or Google or what have you. Josh, it’s been really great to speak with you. I really appreciate you taking the time. The book is so fantastic and gives such a great insight into this moment, this whole project, how it came to be, and how it collapsed. Thanks so much for taking the time.
JO: Thanks so much, Paris, this was great.