D.C. Regulators Are Forcing This Rideshare Alternative Out of the Market
D.C. Superior Court Judge Shana Frost Matini ruled Monday that Empower, a software service that enables independent drivers to arrange rides with customers, remains in contempt of the court’s November 2024 order to cease and desist operations, following a conditional order of contempt issued in February. Matini also found Joshua Sear, CEO of Empower, to be in contempt and levied a daily $5,000 fine until the company is brought into compliance. For Empower to comply with the court order, it must shut down its D.C. operations, which will rob hardworking independent drivers of a significant source of income.
At Monday’s evidentiary hearing, attended by Reason, Jonathan Rogers, director of the Department of For-Hire Vehicles (DFHV), testified that the DFHV, which regulates all vehicle-for-hire services in the city, has never received the $5,000 application fee or the $250,000 security fee from Empower to register as a digital dispatch service or private vehicle-for-hire business. Since the DFHV’s first cease and desist order in 2020, the company has argued that it is a software service, not a ride-hailing service, and therefore not subject to the department’s jurisdiction.
Rogers also testified that, while Empower uses the same background checking service as Uber (Checkr), its trade dress—the logo displayed by for-hire vehicles—proposal was insufficiently detailed. Empower also doesn’t verify whether drivers carry commercial insurance and does not remit 6 percent of its customers’ (drivers’) gross receipts to the city. (Rogers acknowledged that Sears tried to arrange to make payments to the city but was unable to because Rogers himself did not put him in contact with DFHV’s account managers.)
Though Empower’s attorney argued that the company complied or was striving to comply with nearly all of the DFHV’s regulations, Rogers insisted that the commercial insurance requirement must be met for an application to be approved. Rogers also stated that D.C.’s Department of Insurance, Securities and Banking did not have plans to create an independent driver insurance fund that could be paid into in lieu of obtaining commercial insurance, which means Empower may not receive interim or conditional approval as no such approval exists.
In his testimony, Rogers also emphasized that the city has many protections against discrimination and that the DFHV is responsible for ensuring fair and equitable transportation services. Invoking Empower’s philosophy of “freedom and independence” for drivers to choose whom to serve, where to go, and what fares to set, Rogers suggested that the company would insufficiently enforce anti-discrimination statutes. However, after complaining about the deluge of emails he has received from concerned drivers and riders on his work email and phone number (which are publicly available), Rogers admitted that he’s “sure they do want this service to exist.”
Reason has attended two rallies for the company in Washington D.C. this year—one at Howard University on February 28 and another on Pennsylvania Avenue on March 13. Many in attendance, drivers and riders alike, were ethnic and racial minorities—and a majority of the drivers Reason spoke to were immigrants. Moreover, the riders in attendance, including women, reaffirmed their allegiance to Empower because of affordability and positive interactions with their drivers. Sierra, a 22-year-old employee at a cancer nonprofit, said “When the Metro stops at midnight and the young people are outside, we have no choice but to take some sort of rideshare. And I don’t think it makes sense to have it cost $50.” Cameron, who declined to share her occupation and age, told Reason that she hasn’t “had any bad issues with Empower….On Empower, you have the option to choose the gender of your driver, and you don’t have that on Uber and Lyft.”
The D.C. Court of Appeals determined in a February 2024 ruling that the DFHV did not provide the Office of Administrative Hearings (OAH) with any reason to believe that Empower and its subscribers were not complying with DFHV’s requirements and that “there was no evidence that Empower’s failure to register actually caused immediate and irreparable harm to the public.” The Court of Appeals also determined that Empower “is a private vehicle-for-hire company subject to DFHV’s regulation.”
Empower still refused to register, maintaining that it is not a private vehicle-for-hire company, so the DFHV issued another cease and desist in April 2024. The OAH issued a final order affirming this cease and desist in May 2024. Empower challenged the OAH ruling in the D.C. Superior Court, which resulted in Matini’s November 2024 order that the company “shall immediately cease operations as a digital dispatch service and private sedan business.” Matini found Empower in conditional contempt of court in February 2025 for failing to discontinue its operations while unregistered with the DFHV.
On Monday, Matini reaffirmed this ruling, stating that “Empower is neither in full nor substantial compliance” and must comply with the cease and desist order issued by the OAH. “Quite frankly, it’s troubling that Empower has come to the Court and said that ‘you can’t shut down this app that all these drivers depend on.’…Empower should have been in compliance with the law before selling its drivers a bill of goods,” Matini added.
The D.C. Court of Appeals will hear oral arguments from Empower challenging the OAH’s May 2024 cease and desist order sometime between April and June. Empower is also appealing the Superior Court’s November 2024 injunction and its February 2025 contempt order.
Empower users were still able to reserve rides to and from D.C. on Wednesday. Sear tells Reason the company “will continue to ensure that its customers, who provide access to affordable transportation in some of the most underserved communities in the District, are able to continue to use Empower’s software to run their own businesses.”
“I will personally do everything in my power to not put thousands of people out of work and tens of thousands of people in a situation where they have less money in their pockets and have to pay more or have less access to affordable transportation,” before Monday’s hearing, says Sear. By keeping the app open at a multi-thousand dollar expense to himself, Sear is putting his money where his mouth is.
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