A new ride-hailing service in Washington is challenging Uber’s dominance with lower prices and a unique business model
Washington: Recently, outside Union Station, a mix of taxis, Ubers, and Lyfts were picking up passengers. Among them was a new player called Empower.
Empower, which started in 2019, is quickly becoming a competitor to Uber and Lyft in the city. They’re doing about 100,000 rides a week, which is around 10% of the local market share, even more than taxis.
However, there’s a catch. Empower hasn’t registered with the local Department of For-Hire Vehicles, meaning they’re operating illegally. While riders love the lower prices, the company is facing serious legal issues, and local officials are trying to shut it down.
They’ve racked up over $100 million in unpaid fines and are under investigation. A judge even ordered them to stop operations last month.
Some regulators see Empower’s approach as a repeat of Uber’s tactics from a decade ago when it disrupted the local transit scene. Uber, led by Travis Kalanick, was known for bending the rules to gain market share.
Empower, run by CEO Joshua Sear, opened in 2020 and has been ignoring regulations since day one. “Empower is trying to out-Uber Uber,” said Katie Wells, a labor expert.
Despite the legal troubles, Empower isn’t slowing down. They’ve raised $11 million from investors and have plans to expand. Sear mentioned they want to launch in more markets and are looking for more funding.
The way Empower works is pretty straightforward. Drivers pay a monthly fee, usually around $350, and keep all the fares they earn. This makes rides about 20% cheaper than Uber and Lyft, and drivers earn about 30% more.
Interestingly, Empower doesn’t market itself as a ride-hailing service. Instead, they say drivers are “working for themselves,” which helps them avoid some regulations.
Local officials disagree, claiming Empower isn’t meeting safety standards. They issued a cease-and-desist order back in 2020, but a court later ruled that while Empower isn’t a safety risk, it still needs to register.
Sear has pushed back against the city’s regulators, claiming they’re just doing Uber’s bidding. Uber didn’t directly respond but stated they work with officials to ensure safe rides.
In September, Sear rallied 1,300 people through the Empower app to testify against the city’s agency head, which led to a delay in the hearing.
He’s also organized rallies for Empower drivers, where they protested against local officials. Some drivers even received ride credits and free pizza for showing up.
Nadeau, a city council member, criticized Empower’s tactics, saying they’re just like Uber when it first came to town.
Empower has encouraged riders to email local officials in support of the service, similar to what Uber did years ago. Some riders shared how Empower helped them save money on rides to medical appointments.
However, not all feedback has been positive. Some riders reported issues with drivers, including unsafe behavior and lost belongings.
As Empower gains popularity, many drivers on other platforms are struggling. While Uber has become profitable, many drivers say their earnings have dropped.
One driver, Moses, shared he makes about $1,800 a week with Empower, but there are risks. Local officials have been cracking down, fining and impounding vehicles.
Another driver, Ridvan, had his car impounded while driving for Empower. He paid $500 to get it back but was back on the road the same day.
Despite the risks, Ridvan prefers Empower because he earns significantly more than with Uber.
Local officials are aware that many Empower drivers are low-income and may not realize the service is illegal. They’ve been lenient, only impounding about 45 vehicles a month.
Sear, a former corporate lawyer, is trying to change the law to allow drivers to register individually instead of the company. He’s met with several council members but hasn’t gained any support.
Nadeau dismissed his proposal, saying it’s ridiculous to change the law for Empower. If they keep ignoring fines, they could face criminal charges.
After the attorney general’s lawsuit, a judge ordered Empower to stop operations. The attorney general’s office is now seeking to hold Empower in contempt.
But Sear isn’t backing down. He claims Empower is profitable and recently expanded to Baltimore. When asked about potential criminal charges, he shrugged it off, saying it would only make Empower bigger.
This article originally appeared in The New York Times.
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