Helmed by its founder, Travis Kalanick, Uber gained a reputation for bending the will of local governments with regulation-flouting tactics.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 startup 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% of the local market, a larger share than the city's taxis.
But the company has refused to register with Rogers' 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, 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 startup has racked up over USD 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 CEO 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."
Despite its legal strife, Empower has no plans to slow down, much less shut down. The company has raised USD 11 million from around 75 individual investors and has just 20 full-time employees, Sear said.
"We're going to launch in additional markets, and we are trying to raise capital so that we can expand much faster," 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 USD 350, and then set their own rates for rides, taking home 100% of the fare.
As a result, rides on Empower cost about 20% less than on Uber and Lyft, and drivers make around 30% 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, Sear said.
That framing, 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 have commercial insurance and pay 6% of its gross receipts to the agency.
Local officials have disputed that characterization. They have accused Empower of not meeting safety requirements, and they issued it a cease-and-desist order in 2020. In February, however, the District of Columbia Court of Appeals overturned that decision and ruled that Empower did not present a risk to public safety but was still required to register with the city.
Sear has fought back against Nadeau and the city's regulators, who he claims are doing the bidding of Uber's lobbyists. While Uber did not directly address Sear's accusations, it said in a statement that it "has partnered with elected officials and policymakers to establish a regulatory framework that ensures safe, convenient, and affordable rides while prioritizing essential protections for both riders and drivers."
In September, Sear mobilized 1,300 people via the Empower app to sign up to testify against Rogers at his agency confirmation hearing, which Nadeau then delayed.
He has also held rallies for Empower drivers at Washington's city government building during Nadeau's office hours. At one of these rallies in November, Empower drivers carried signs in the streets that read: "Barbers work for themselves. Why can't drivers?" and "CM Nadeau, why can't I work for myself?" A truck carrying an image of Nadeau portrayed as a marionette drove around the block. Above the image read: "The Uber Puppet."
Empower provided the signs and gave any driver who showed up USD 20 in ride credit and free pizza, which some drivers admitted was a draw.
"The approach that they've taken thus far in D.C. is a lot of gaslighting, a lot of publicity stunts, a lot of misinformation," Nadeau said. "The lack of self-awareness that they are fundamentally the same as Uber was when it came in is astounding to me."
Empower has also prompted its riders to send hundreds of emails to Nadeau and Rogers lobbying for the service, according to copies of the messages seen by the Times. (Uber tried something similar in Washington called Operation Rolling Thunder in 2012, in which Uber riders were prompted to email to lawmakers complaints about the taxi industry.)
One rider, who said they were a low-income cancer patient, wrote of using Empower to get to and from doctor appointments in a part of the city that had no public transit, saving tens of dollars each ride. Another wrote that they were disabled and unable to use public transit but used Empower regularly because it was cheaper than Uber and Lyft.
In other instances, Sear's email tactic backfired, and riders sent messages about problems they'd had with Empower's drivers.
"Tonight my driver was drunk, drinking, swerving as he drive & also being creepy flirty," one rider wrote.
"One driver drove off with all my belongings. My purse, laptop for working, house keys, basically everything I own. The customer support app is no help," said another. "Something must be done."
Empower's popularity has risen as pay for gig workers on rival platforms has declined. While Uber became profitable for the first time last year, many of its drivers, who would provide only their first names for fear of reprisals from local officials, say their work is now more challenging - and less lucrative- than ever.
Moses, 33, a Nigerian immigrant who had driven for ride-hailing companies since 2015, said he makes as much as USD1,800 a week using Empower. But driving for the app carries its own set of risks, as he and others have learned - during the crackdown by local officials, the city has sent enforcement officers to fine and impound Empower drivers' vehicles.
Ridvan, 24, said his car was impounded while he was driving for Empower this year. He was without a vehicle for four days and had to pay USD 500 to retrieve it, but after paying the fee, he was driving for Empower the same day.
Ridvan said that is a risk he is willing to take, adding that he earns around USD 350 for every USD 200 he would make driving for Uber.
Enforcement has done little to stop the app's growth, and Empower has gone years without paying the USD 75,000 in daily fines it has been assessed. Local officials also recognize that many of the company's drivers are low-income residents who don't know the app is illegal.
"We realize they're collateral damage," Rogers said.
As a result, the city has been light on enforcement, impounding only about 45 vehicles each month. Rogers has also refrained from escalating enforcement actions, such as having his officers order fake rides on the Empower app to catch drivers.
Sear, a former corporate lawyer, hopes to save the company's operations in Washington through legislation. In May, he wrote a proposed bill that would require drivers, not companies, to register with the city agency, similar to how Uber and Lyft drivers in New York City must register individually with the Taxi and Limousine Commission.
He said he has asked all 13 council members to sponsor it and has met with the staff of nine of them. None of them have taken up his bill, and Nadeau scoffed at the idea.
"That we should change our law to accommodate them is incredibly ridiculous," Nadeau said. If Empower continues to avoid paying its fines, the civil penalties could become criminal ones, she said.
After the attorney general's lawsuit, a Superior Court judge ordered Empower to cease its operations last month. This month, , the attorney general's office asked the court to hold Empower in contempt.
Sear has no plans to budge. For now, he said, Empower is self-sustaining and profitable, and it expanded its service into Baltimore last month.
When asked about the prospect of criminal charges in an interview at Empower's office in McLean, Virginia, last month, Sear appeared unbothered, holding his hands above his head as if being handcuffed.
"Bring it on," he said. "You'll only make Empower even bigger."
