Empower, a ride-hailing app that has generated controversy by bucking regulators in Washington, D.C., has expanded service to Baltimore as a state regulatory board has tried to stop it.
The company’s announcement came Friday, shortly before a D.C. judge forced the company to cease operations in the nation’s capital. That’s because the company, which markets itself as a cheaper alternative to Uber and Lyft, had not registered with a District of Columbia agency that oversees for-hire vehicles. D.C. requires companies to pay taxes and congestion fees, have insurance and conduct background checks, in addition to subjecting them to additional oversight. Empower has kept costs low by not complying with such requirements, officials said.
Empower CEO Joshua Sear rebuffed these claims earlier this year and told local media that every driver undergoes a background check. The company, which facilitates over 90,000 rides a week in the Washington metro area, contends that drivers who appear on the platform are not employees, but rather buyers of software that in turn helps them reach riders. Drivers pay for software access, then set their rates and keep their earnings.
If the app gains traction here, Empower could drive down prices for ride-hailing Baltimoreans. It could also bring some of the D.C.-area chaos that it ignited up to Charm City.
Empower has not yet engaged with the Baltimore City Department of Transportation, Sear said. “We welcome the opportunity to work with them to improve the lives of drivers and help facilitate more transportation options for Baltimore Metro Area residents,” he added. “We intend to reach out after the holidays.”
Here in Maryland, the state’s Public Service Commission regulates ride-hailing companies such as Uber and Lyft, issuing them “transportation network company,” or TNC, licenses.
Ride-hail drivers also have to apply for and obtain a specific license from the commission in order to operate — they do so through a specific operator, such as Uber or a taxi company. The license doesn’t cost the driver anything, but requires a fingerprint-supported criminal background check and compliance with all Maryland insurance and vehicle registration laws.
In April, the PSC filed a formal complaint against Yazam Inc., which it says has operated as a TNC under the name Empower in Maryland since at least 2021, and has done so without authorization.
The commission directed Empower to apply for authorization in January 2022, writing in a letter that it could face fines of up to $2,500 for every day it was out of compliance, as well as possible criminal consequences.
The company had not done so by the April filing, the commission wrote in its complaint. The company “continues to operate unlawfully in Maryland,” the complaint alleges.
A PSC spokesperson declined to comment on the matter and cited the pending case against the company. Officials at Baltimore’s transportation department, which has a rideshare coordinator on its staff, also did not respond to request for comment.
In its response in June, Empower argued that it is not a TNC because of the nuances that differentiate it from Uber and Lyft, and therefore it is not subject to Maryland’s regulation of ride-hailing companies. “Empower does not provide transportation anymore than OpenTable provides lunch or Expedia provides flights,” the company wrote.
The company response also argues that Empower isn’t harming Marylander consumers but rather providing additional competition that is helping them. It further alleges that the commission itself has even recognized that Empower does not fit Maryland’s definition of a TNC.
Empower, based in McLean, Virginia, has been marred by controversy since it launched in the District of Columbia in 2020. Earlier this year, a woman told police in Arlington, Virginia, that she was sexually assaulted by an Empower driver. The driver has since been suspended, The Washington Post reported.
Competitors Uber and Lyft also pushed back against regulation in Washington, D.C., during their infancy about a decade ago, but came to a resolution with the local government.
These scandals prompted D.C.’s attorney general to file a lawsuit against Empower in July. He accused the company of failing to maintain rider records and conduct background checks adequately.
