Who cares if cheaper Empower is unregulated in DC? Uber and Lyft did the same
Tom Rogan
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Why are Washingtonians using the Empower ride-sharing app?
I used Empower today because it connected me with a driver who charged $10.32 for the ride I needed to make. Lyft‘s cheapest 15-minute “wait and save” offer for that same ride was $10.99. Riding with Uber would have cost me $8.93, but only because Uber is offering me a temporary promotion that would have reduced the ride’s list price from $12.54 (I will save that promotion to use on a more expensive ride). I haven’t used the Alto ride-sharing firm. Put simply, Empower has disrupted the market by often offering cheaper rides than its competitors while also offering drivers higher earnings.
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Empower charges drivers a range of subscription fees to use its app. Drivers then make 100% of earnings on a ride and, guided by price recommendations from the app, are able to set their own prices for tender to prospective customers.
I’ve been using Empower since this summer and have found its rides are approximately 15%+ cheaper than Uber/Lyft offers about 85% of the time. Hence why Uber, Lyft, and Alto fear Empower. A ride service offering cheaper rides and higher-earning drivers can dominate both ends of the supply-demand equation. Those firms are thus hypocritically getting public relations firms to point out that Empower is unregulated in D.C.
NBC 4 reported on this concern on Wednesday, noting that the D.C. had sent a cease and desist order to Empower. But I’d argue that this regulation concern should be utterly irrelevant. Uber operated in an unregulated fashion in France, Italy, and certain United States locations in its formative days. Lyft did the same.
But what makes Empower distinct to these firms is that Empower drivers are making 100% of the earnings for each ride. In contrast, Uber and Lyft take hefty cuts of each ride’s earnings. Top line: the D.C. Department for Hire Vehicles wants to regulate Empower so that it can tax its riders and drivers to pay more for the city’s generally useless public services. Uber, Lyft, and Alto want Empower regulated so that the D.C. tax burden makes it more expensive for riders and thus less competitive.
Still, the top line is that many D.C. riders and drivers like Empower, something born out by an interviewee in NBC 4’s report. The firm’s CEO, Joshua Sear, told me he’s open to regulatory engagements with D.C. that reflect Empower’s different model to Uber and Lyft. He said, “Using Empower’s software and support services, over 10,000 drivers have provided over 4,000,000 rides to over 200,000 riders in the DC metro area. They have earned over $65,000,000.” He added that, “Empower’s business model has resulted in an increase in access to affordable transportation in historically underserved communities, particularly in South East DC.”
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This is good stuff. It’s also good for riders that Uber and Lyft are sometimes cheaper than Empower. So riders should keep using Empower if they like the drivers it connects them to. Drivers should keep using Empower if they find themselves making more money for their families. If riders prefer Uber, Lyft, or Alto, they should use those services instead.
This is not complicated stuff. Or at least it shouldn’t be.