A Ride-Hailing Start-Up in Washington Tries to ‘Out-Uber Uber’
A company called Empower is trying to take on Uber, Lyft and local regulators as it piles up fines and draws new passengers to its service.
nytimes.com
On a recent Tuesday morning outside Union Station’s train hall in Washington, a stream of taxicabs, Ubers and Lyfts pulled to the curb to pick up passengers.
In the mix, too, was another type of vehicle.
“Right there,” said Jonathan Rogers, the head of the city’s Department of For-Hire Vehicles, pointing to an unmarked sedan dropping off a passenger. “That’s an Empower.”
Founded in 2019, the ride-hailing start-up Empower has become a serious rival to Uber and Lyft in Washington. It now does 100,000 rides in the city each week, good for 10 percent of the local market, a larger share than the city’s taxis.
But the company has refused to register with Mr. Rogers’s agency, meaning that it operates in the city illegally. While drivers and riders have taken to Empower because of its cheap prices, its rapid growth has been met with mounting legal troubles, and now, Mr. Rogers and Brianne Nadeau, a member of the District of Columbia Council who leads the Committee on Public Works and Operations, are making a push to shut it down.
The start-up has racked up over $100 million in unpaid fines. It is being investigated by the Council and has been sued by the District of Columbia attorney general’s office. Last month, a Superior Court judge ordered the company to cease operations.
To some regulators, Empower’s tactics are more than just familiar — they’re a page out of Uber’s playbook from when it arrived in Washington a decade ago and wrested control of the transit market from taxi companies.
Helmed by its founder, Travis Kalanick, Uber gained a reputation for bending the will of local governments with regulation-flouting tactics.
Through years of negotiations with Uber and its top rival, Lyft, lawmakers created a thicket of regulations in Washington and cities around the world — ones that new competitors now view as roadblocks that should be torn down.
Among them is Empower, led by its chief executive, Joshua Sear, which opened for business in Washington in 2020 and began ignoring those rules on arrival.
“Empower is trying to out-Uber Uber,” said Katie Wells, a labor expert and a co-author of the book “ Disrupting D.C.: The Rise of Uber and the Fall of the City.”
In spite of its legal strife, Empower has no plans to slow down, much less shut down. The company has raised $11 million from around 75 individual investors and has just 20 full-time employees, Mr. Sear said.
“We’re going to launch in additional markets, and we are trying to raise capital so that we can expand much faster,” Mr. Sear said in an interview. “This is only the start.”
The premise of Empower is simple. Drivers pay a flat subscription fee to the company each month, typically $350, and then set their own rates for rides, taking home 100 percent of the fare.
As a result, rides on Empower cost about 20 percent less than on Uber and Lyft, and drivers make around 30 percent more than they would on those apps for the same rides, according to pay logs reviewed by The New York Times and interviews with over two dozen drivers.
Empower does not market itself as a ride-hailing company. Instead, its drivers “work for themselves,” and the app works similarly to the way reservation apps connect restaurantgoers to restaurants, Mr. Sear said.
That framing, Mr. Sear said, absolves the company from having to register with the Department of For-Hire Vehicles, which would require Empower to provide or guarantee that its drivers had commercial insurance and pay 6 percent of its gross receipts to the agency.
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