Ride-sharing giants Uber and Lyft have attracted hundreds of millions of customers across the globe. They have done so by undercutting the price points offered by taxi companies. While taxis can still be cheaper than Uber and Lyft during "surge pricing" periods (when the supply-demand curve carries the price point higher), their best days are gone.
But now, Uber and Lyft are facing their own market disrupter, one that potentially poses a mortal threat to their business models. Enter Empower. It's a recent ride-sharing market entrant that tends to be significantly cheaper than its older competitors.
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Empower currently operates in North Carolina, New York, and Washington, D.C., but says it wants to expand. What makes Empower different from Uber and Lyft is that its drivers pay a subscription fee to the company in order to use its app. But after paying that fee, drivers set their own rates and receive 100% of the payment for each ride. In contrast, Uber and Lyft take steep commissions on each ride that its drivers accept. On its website, the company claims that "Empower is not a transportation provider like Uber or Lyft. Empower is a booking platform like Expedia."
How much do Empower drivers pay to access the app?
It varies. But in D.C., for example, drivers pay between $49.99 and $449.99 per month depending on their earnings.
I've been using Empower for about a month now. I've found its service to be generally excellent. While the quality of Empower cars is sometimes of a lesser quality to those of Lyft and Uber, such distinctions are marginal. Empower drivers are also abundant in D.C., making for short wait times. More importantly, I've found that around 85% of the time, Empower rides are at least 15%-30% cheaper than Lyft/Uber rides offering the same journey. The drivers that I've talked to also seem far happier with Empower than they were with Uber/Lyft. They say they are earning significantly more with the new service.
Empower is not perfect.
Albeit rarely, its rides are more expensive than Uber/Lyft. In addition, while Empower offers a ride price estimate before a rider books, drivers can accept that ride at a higher price point. This makes it important for riders to quickly check that the accepted driver is charging a fee within the estimated range. And as with some Uber/Lyft drivers, some Empower drivers manifest the tedious tendency of accepting a ride and then driving off in the wrong direction in order to earn an easy cancellation fee. Unlike Uber/Lyft, however, I've found that Empower's customer service is actually reachable. Emailing info@rideempower.com tends to get an effective response from an actual human being.
The underlying challenge for Uber and Lyft is simple. Namely, if Empower is earning drivers more money and saving riders more money, it may greatly threaten its competitors' business models.