Is the long saga of the ride-hailing app Empower finally over?

I’m going to age myself: I still remember when Uber first came to D.C. The app-hailed black cars were suddenly all the rage, in large part because the city’s taxicabs at the time left plenty to be desired. But D.C. regulators quickly cracked down, arguing that the new service skirted the law.

A lengthy political and legislative fight followed. Uber users and drivers flooded the D.C. Council with demands that the service be legalized, which were eventually successful (and the company’s aggressive tactics in D.C. became a blueprint for how it entered new markets). 

More than a decade later, and we’re watching the same movie: An upstart company flagrantly thwarting regulators to disrupt the existing industry — only now, Uber, Lyft and their competitors are the legacy businesses.   

Much like its predecessors, Empower, an app that connects riders and drivers, is claiming to be a technology platform, rather than a ride-hailing app, that doesn't need to comply with certain regulations.  

The company has been at loggerheads with the city for five years, facing tens of millions of dollars in fines as it continued to defy the orders of regulators and judges. In many ways, it’s a replay of Uber’s battle. But D.C. lawmakers and officials have been less willing to entertain the company’s claims and have held firm on forcing it to comply with local laws. 

The long saga seemed to be finally approaching the end. After the CEO was threatened with jail time, he said the company would shut down its D.C. operations by October 10. But in a Hail Mary play this week, Empower now says that it will break its contracts and offer the service to drivers for free — which, it argues, means that they can keep operating. It remains to be seen what a judge will make of the move. 

Below is everything you need to know about the long and meandering fight over Empower.

What is Empower?

From a rider’s perspective, Empower — which was founded in 2019 and is based in McLean, Virginia — is a ride-hailing service not unlike Uber or Lyft. You use an app to request a ride, you go from point A to B, and you pay for it via the app, simple as that. 

Empower, though, says it’s 20% cheaper than its larger and more established competitors on average. For a 3.5-mile ride from my apartment to the White House, for example, I’ve found rides on Empower for less than $9. The same ride on Uber would set me back about $17.

Instead of setting fares and taking a cut of every ride, like traditional ride-hailing apps, Empower charges drivers a monthly subscription fee to use the app and largely lets drivers set their own rates. Empower says this model is better for drivers — many of them immigrants — because it frees drivers from kicking back a portion of their fares to corporate behemoths, which can also help bring down costs for riders.

“We built this platform to allow folks who want to be able to work for themselves to be able to do so and provide choice to riders who might not like that when they get an Uber the driver is only getting paid $8 on a $30 ride,” said Empower CEO Joshua Sear during a protest close to the White House on Tuesday.

If you listen to some of Sear’s customers — drivers and riders alike — Empower seems to be onto something.

“I only use Empower because I make more money than other [apps],” driver Abdel Ahikhoune told me at the protest.

D.C. resident Sachait (he declined to share his last name) argued that “the way the economics of the Empower model works makes more sense for the rider and the driver themselves.”

According to Sear, more than 100,000 riders are using the service each month in D.C. The company also operates in Winston-Salem and Greensboro, North Carolina; Baltimore; and New York City.

So what’s D.C.’s problem with Empower?

Current law requires ride-hailing companies to have a license to operate as a Digital Dispatch Service (for their app) and as a Public Sedan Business (for private cars and drivers). Empower, though, is not licensed in D.C. for either. 

Empower argues that it doesn’t need to register with the city, claiming it’s not actually a ride-hailing service like Uber or Lyft, but rather a technology platform that allows independent drivers to connect with passengers. The company compares itself to Expedia and how that lets you book a flight, or OpenTable, which connects diners to restaurants to make a reservation. 

Clever a legal distinction as that may seem to be, D.C. regulators don’t buy it — and neither have several judges. The regulators argue that Empower hasn’t successfully registered in D.C. because it doesn’t meet some critical requirements, namely the need for commercial insurance that companies like Uber and Lyft have to hold. (Empower leaves insurance up to individual drivers; most personal insurance policies, though, don’t cover the use of a car for commercial purposes.) 

Additionally, D.C. says it can’t be sure that Empower is conducting the required background checks on drivers (though the company claims it does) and that drivers and the company are paying the required 6% in taxes on what they make. The company also isn’t paying a 25-cent surcharge that is imposed on Uber and Lyft rides, which helps fund Metro. 

Empower has become something of a cause célèbre amongst libertarians, who see it as a cheaper alternative to Uber and Lyft, better for drivers, and proof that city regulations have unnecessarily driven up the cost of ride-hailing services. 

But critics and some local officials say it’s actually just another company trying to make money by breaking the law. 

“Like all things that are less expensive, usually it's because they're cutting corners, right?” says Ward 1 Councilmember Brianne Nadeau, who has battled with Empower since last year, when the D.C. Council committee she chairs announced it was investigating the company. 

That has also been the argument against Empower in a handful of lawsuits it has already faced. In one that’s still ongoing, a resident who used Empower to book a ride that resulted in a crash said they were unaware that the driver didn’t have the appropriate insurance that under normal circumstances would help cover medical expenses. 

“By representing to District of Columbia consumers that it can provide rideshare rides more cheaply than Uber or Lyft, but not explaining that it does so by violating its legal duties to provide the insurance required under District of Columbia law, Defendant Empower misleads consumers… concerning the reason for its price in comparison to its competitors' prices,” reads the lawsuit. (Empower is fighting the suit.)

Why is Empower possibly shutting down?

The possible shuttering of Empower’s operations in D.C. isn’t exactly sudden or unexpected; the regulatory and legal case has been going on for years.

The city’s first attempt to shut Empower down until it properly registered dates back at least five years. D.C. again told Empower to stop operating in the city in December 2023. (It also impounded vehicles of drivers using the app, but has since stopped doing that.) The company ignored the order, and a year later, a D.C. judge told the company to comply. Empower never did, though.

In February, the judge held the company in contempt and hit it with $25,000 daily fines until it closed up shop. A month later, the judge also ordered $5,000 daily fines for Empower CEO Joshua Sear, which still didn’t compel the company to abide by the court order.

As of last month, D.C. says Empower had been in contempt of court for 239 days — totaling almost $6 million in unpaid fines. Sear himself had been in contempt for 197 days, worth an additional $985,000 in unpaid fines. And that’s on top of another $43.5 million in unpaid fines that Empower faces from DFHV for operating in D.C. without the proper licenses. All told, the company owes D.C. at least $50.4 million, an amount that Sear says the company can’t pay.  

“Fines are not working as a sanction to compel Defendant to obey this Court’s orders and the law,” D.C. argued in a recent court filing. Judge Shana Frost Matini agreed, and threatened to send Sear to jail if he didn’t finally come into compliance with her order. 

“You don’t get to decide what laws you like or what laws you don’t like and what laws should apply to you,” she said, according to The Washington Post. 

That caught his attention, and Sear said he would shut down Empower in D.C. by October 10. 

What has Empower tried to do to fix the situation?

The company approached D.C. lawmakers early on, looking for a carve-out in the city’s existing ride-hailing law so it could operate legally. In short, it wanted individual drivers to be able to work for themselves and register directly with the city, instead of a company like Empower having to do it for them. 

But that pitch fell flat. “Instead of participating in the existing law that we have for [companies] like Uber and Lyft, they were like, ‘We're special and different because we're a tech platform,’” says Nadeau. “I don't know if you remember that narrative from the original days of Uber and Lyft.”

Nadeau is right: When Uber came stomping into D.C. in 2012, it largely spurred attempts by the city to regulate it by arguing that it wasn’t a transportation company, but rather a tech platform. Uber did eventually come around to being regulated, though. 

Sear also says that he has tried to register Empower, but has been rejected. City officials say his first application in 2020 was incomplete, mostly because it lacked the required proof of commercial insurance coverage for drivers. Much the same happened this May, when another attempt to register failed.

In the meantime, Empower did pick something else up from Uber: a desire to fight, and fight hard. 

The company has used its list of users and drivers to organize protests, and it has directed tens of thousands of emails to city leaders over the years. Both tactics were on display this week. (Empower is similarly fighting regulators in Maryland. It says it’s operating in Virginia, though it is not licensed there.)

On Tuesday, Empower officials, drivers, and riders protested the company’s impending closure in D.C. in front of the White House, asking President Donald Trump to intervene to save the company. It also buried the council in historic amounts of automatically generated email messages. Individual council members reported getting upwards of 7,000 emails over the weekend; the council as a whole says it received more than 600,000 emails, forcing IT personnel to start blocking the onslaught. 

Earlier this year, two Empower officials also launched an attempt to recall Attorney General Brian Schwalb from office, claiming he is unfairly and illegally beholden to Uber. Schwalb responded by arguing that Empower was abusing the recall process as a means to intimidate him over the city’s legal case against the company. Empower’s attempt to recall him from office recently ended with no money raised and no signatures collected.

At Tuesday’s rally, Sear again repeated the claim that D.C. was coming after Empower because it poses an “existential” threat to existing ride-hailing companies like Uber and Lyft. “This is simply about a desire to make sure the competition to Uber goes away,” he said. 

Some drivers went even further, calling on Trump to take over D.C. and depose Bowser.

What happens next?

While Sear had said he would shut down Empower by October 10, the company's lawyers told Judge Matini on Wednesday evening that it is actually doing something else altogether — and won't be going away.

In short, Empower now says it's breaking the contracts it has with all the drivers using the platform, who will now be able to use it for free. (Recall that they have been paying a monthly subscription fee.) Empower argues that D.C.'s definitions of Digital Dispatch Services and Public Sedan Businesses require a contract between the company and drivers, and without such a contract, the company wouldn't qualify as either a DDS or PBS. They argue that Empower doesn't have to shut down since it falls into a seemingly unregulated part of the law.

"To be clear, having to take these steps is not what Empower wants," wrote the company's lawyers in a filing with the court. "It is not how Empower prefers to operate in the District. It will hurt Empower’s business. But it is the method of compliance that will do the least harm to the public, which Empower cares deeply about even if the District does not.”  

D.C. will have a chance to respond and Judge Matini will have a chance to ask questions during a hearing scheduled for October 14. But even if this ploy works to keep Empower alive, it would put individual drivers at risk of having their cars impounded since they would essentially be operating unregulated ride-hails.

In the meantime, Nadeau says that riders who are concerned with the cost of Uber should use the city’s traditional taxicabs instead — which can now be hailed using the Curb app. Taxicabs have fixed fare rates, so in some cases they may be cheaper than any of the alternatives.