Jail Time for Cheap Rides?

D.C.'s bureaucracy violates independent drivers' economic liberty.

Empower, a ride reservation service, has been hounded by Washington, D.C., regulators since it began its operations in 2020. The D.C. Attorney General has threatened to request that Empower CEO Joshua Sear be arrested for civil contempt if he refuses to comply with the Department of For-Hire Vehicles (DFHV) cease and desist order by Wednesday.* Mayor Muriel Bowser has the power to direct the DFHV to rescind its order, which would allow Empower to continue operating in the city.

Sear founded Empower in 2019, not as a transportation company but as a software company that serves independent professional drivers. Empower differs from the flagship ride-share services in multiple ways. Unlike Uber and Lyft, drivers who use Empower do not receive 1099 forms—they are not contractors, but customers, according to the company.

The company also does not collect a percentage of every fare, nor does it set them; its drivers set their own rates by adjusting their minimum and base fares, per minute, per mile, and surge prices as they see fit. They then pay Empower a flat monthly fee of $349.99 for access to the D.C. Monthly Platinum plan, which "provides drivers with unlimited access to Empower's software and support services." Empower's suggested rates are "set so that drivers make 20% - 25% more on average than they would if they were driving on behalf of Uber/Lyft [and] riders also save 15-20% on average."

Empower also does not provide its drivers with commercial insurance, to the chagrin of the DFHV. Instead, drivers who use the app are responsible for securing this insurance themselves. Empower provides a link to Research Underwriters, a specialty insurance broker for the transportation industry, on its FAQ for drivers who would like to get a quote. Uber and Lyft, meanwhile, both provide their drivers with over $1 million in third-party auto liability coverage and, for drivers with qualifying personal auto insurance, cover the cost of car repairs or its cash value (after a $2,500 deductible). Those two ride-share companies, unlike Empower, are registered with the DFHV as vehicle-for-hire businesses and, as such, not only maintain required levels of commercial insurance for their drivers but also deliver 6 percent of drivers' gross revenue to the department.

Empower challenged the DFHV's November 2020 cease and desist order. In February 2024, the D.C. Court of Appeals reversed the Office of Administrative Hearings' (OAH) upholding of the DFHV's order but upheld the OAH's classification of Empower as a private vehicle-for-hire business. The DFHV issued another April 2024 cease and desist order, which the D.C. Superior Court upheld in November 2024 on the grounds that Empower refused to register with the DFHV while acknowledging that it "'is a vehicle-for-hire company subject to the DFHV's regulation.'"

Despite the Superior Court ordering Empower to immediately cease operations, its operations have expanded: Roshn Marwah, Empower's chief of staff, tells Reason that the app facilitates 120,000 rides and $2 million worth of fares per week. On February 28, around two dozen independent drivers and riders gathered in front of Lulu Vere Childers Hall at Howard University, where Bowser was delivering remarks at the university's 158th Charter Day Convocation. Protesters were chanting "Drivers' rights are civil rights" and "support drivers, not Uber," hoping to persuade Bowser to direct the DFHV, which falls under her authority, to rescind its cease and desist order. Protesters explained to Reason how shutting down Empower would reduce driver earnings and autonomy and increase prices for riders.

Fred, a 33-year-old Cameroonian immigrant, tells Reason that, when using Empower, "you really are in control…you feel like [you're] really working for [yourself]." Fred argued that, just as Airbnb is not the employer of homeowners who use its platform, neither is Empower drivers' boss. Sam H., a 55-year-old federal employee who drives to earn additional income, says Uber doesn't tell drivers the payment or the destination when arranging pickup—the price ultimately paid by riders is withheld from drivers, who Sam says are discouraged from speaking to riders about prices. Kayla, a 33-year-old who frequently flies in and out of Baltimore for work, described Empower as "the only really affordable ride share….Lyft is not really competition, just preference."

Prohibiting vehicle-for-hire operators from directly registering with the DFHV benefits incumbent ride-share companies at the expense of riders and independent drivers. If Empower is forced to shut down its D.C. operations on Wednesday, lower-income riders and working-class drivers will bear the cost for no discernible benefit to the public.

*CORRECTION: The original version of this article misstated the conditions under which Joshua Sear would be arrested.