D.C. Will Arrest This CEO if His Rideshare Alternative Doesn't Shut Down by Friday
Empower CEO Joshua Sear is guilty of providing a cheap, popular alternative to Uber in the nation's capital.
When Empower entered the Washington, D.C., rideshare market in 2020, it promised to disrupt the status quo by empowering drivers to work for themselves, set their own fares, and collect 100 percent of the proceeds—paying Empower a flat monthly rate to use its software. Despite delivering on this promise to its drivers—who earn more with Empower than by working for rideshares—and facilitating lower fares for riders, the company has faced relentless bureaucratic opposition. After a years-long legal battle with the city, including numerous cease and desist orders and tens of millions of dollars in fines, Empower's time in the nation's capital could be drawing to a close.
On September 26, D.C. Attorney General Brian Schwalb requested that Empower CEO Joshua Sear be incarcerated until Empower "has ceased operating in the District without registration." Last Tuesday, D.C. Superior Court Judge Shana Frost Matini declined to take Sear into custody on the condition that Empower stop serving the district by October 10. If Empower doesn't shut down its D.C. operations by this Friday, Matini will have the "contumacious" Sear incarcerated.
Sear tells Reason that "drivers using Empower are providing over 150,000 rides per week in the DC Metro area."* Its closure in the D.C. market would negatively impact the thousands of drivers who make a living serving the 250,000 riders who use Empower to get around the district and its environs on a budget.
On Tuesday, roughly 100 drivers and riders attended an Empower rally near the White House to protest the decision. One driver in attendance, a 57-year-old retired engineer who worked for Uber for eight years and Lyft for four years before subscribing to Empower a year ago, told Reason he's "satisfied driving for Empower because…they give us 100 percent of the rider fare." He explained that Empower is more profitable for drivers: "If you want to make $100 with Uber, you have to [make] like 16, 18 trips. With Empower, five, six trips you can make $100."
Bonnie, an 82-year-old resident of Dupont Circle, told Reason that old folks shouldn't be driving; they "need something [to get around], but Uber and Lyft are pretty expensive for someone to think of using it regularly. And Empower is reasonable, and the drivers are always wonderful." She said Empower is a "lifeline" for her sister, who doesn't own a car and relies on the service to bring her and her groceries to her home in Brookland.
As the mandated closure of Empower in D.C. will undoubtedly harm riders and the company's subscribers by forcing them to choose more expensive and less lucrative ride-sharing services, respectively, it's important to remember that this decision, and Sear's potential arrest, were preventable; both he and his company have repeatedly tried to comply with D.C.'s laws, but have been stonewalled at every turn.*
Empower was levied a $75,000 daily fine by D.C.'s Department of For-Hire Vehicles (DFHV) in 2024 for not registering with the agency, despite having tried to do so in December 2020. It was then slapped with an additional $25,000 daily fine from the Superior Court this past February, and Sear personally received a $5,000 daily fine in March. In May, Empower tried again to register with the city, submitting a digital dispatch service application. But the DFHV rejected it for want of a $250,000 surety bond, which Empower could not obtain due to the excessive fines pending against it.
The DFHV also denied Empower's private sedan business application, also submitted in May, for not providing a representative sample of its subscribers' insurance policies. Sear tells Reason that "there is no [legal] requirement…that applicants must provide a 'representative sample' of driver policies" and that the department was unable to "tell Empower when testifying before [the Office of Administrative Hearings] what would constitute a representative sample."
While the city has made it challenging for Empower to operate, it has allegedly engaged in illegal enforcement mechanisms against the company and its subscribers. In a federal complaint filed in July, Olushola Oduneye, an Empower subscriber, alleged that the DFHV violated his Fourth Amendment rights by stopping him, seizing his phone, and searching it without a warrant.
Ali Shir also declared that he was illegally stopped by DFHV enforcement officer Ceray Burns. Body camera footage shows Burns randomly stopping Shir, asking him whether he's working for Empower, Uber, or Lyft, and demanding to see Shir's phone, all while Shir maintains that he's not working as a private vehicle-for-hire operator. After Shir repeatedly refuses Burns' requests and asks to see a warrant, Burns impounds his vehicle.
Despite tens of millions of dollars of accumulated fines and bureaucratic obstruction, Sear says he will not stop fighting the legal battles required to serve D.C. drivers. Empower has appealed the denials of its DFHV applications to the Office of Administrative Hearings and has various appeals pending in the Court of Appeals. Empower is also pushing back in the court of public opinion.
Leading up to the Tuesday rally, the company launched a mass email campaign on Saturday. As of Monday evening, 10,000 emails had been sent to Mayor Muriel Bowser, her office, the City Council, and the DFHV to keep Empower open, according to Sear.
It's unclear if the public pressure campaign will convince Bowser and the D.C. government to keep the popular ride-sharing service operational in the nation's capital. Sear says he could live with Empower failing if it "were out-competed, someone had a better business idea, [or] a better model, [but] this company is not going to fail because of corrupt politicians and absurd, unsupported rulings from a court that are inconsistent with 250 years of jurisprudence."
*CORRECTION: This article originally cited an outdated source on the number of rides facilitated by Empower and misidentified Empower's customers.
