The rideshare game is tough folks, even for Uber and Lyft. With millions of rides provided, with billions spent in marketing to grow their top line, both companies have yet to turn a profit.
Barriers to entry in this game are extremely high, otherwise, there would be various others competing for the passenger’s disposable income.
With all their might, and their asymmetric information advantage over the driver and rider, Uber and Lyft have managed to lose billions of dollars in the past decade. Why is that? Maybe it is their business model, maybe they are not disrupting high-margin businesses after all.
All that said, there are companies out there seeking to do a better job than Uber and Lyft and be fairer to drivers. RSG readers have been reaching out to us recently about a rideshare company called Empower. Here are my thoughts about Empower.
Empower: A More Driver-Friendly Rideshare Company?
My initial take is that it seems like a more driver-friendly app-based on-demand rideshare service. The following is from the Empower website:
Transforming Rideshare – With Empower, drivers set their own rates and get 100% of the fare, and riders can get more affordable rides from drivers they trust. By decentralizing rideshare, drivers earn more, and riders pay less and can feel safer requesting a favorite or a same gender driver.
Empower is revolutionizing mobility. Not by providing transportation, but by putting transportation decisions back into the hands of drivers and riders, where they belong.
At Empower, we believe that everyone has a voice and we are listening. TOGETHER WE CAN EMPOWER!
Ok, that sounds good for starters, but what is in it for the driver and passengers? Rideshare is not rocket science, you push a button on your cell phone and hopefully, a clean car with a safe driver will show up to take a rider from point A to point B.
“Transforming Rideshare” is not as easy as it sounds, and there have been many who tried and failed. Sidecar, Ride Austin, and Juno come to mind. Unless you have a few billion dollars lying around, cracking into the Uber and Lyft duopoly is a gargantuan task.
What Does Empower Offer Drivers?
According to Empower’s website, starting with a “30-day free trial”, drivers:
- Drivers get to set their own rates
- Keep 100% of their fares
- Have their own dedicated local customer support team
- “Are provided with the information and tools they need to take control of their financial future”
This all sounds good, but the word “trial” and low monthly fee caught my eye. Is this another subscription-based platform offered in the past?
What Does Empower Offer Riders?
One of the biggest challenges for most companies when starting their own rideshare business is demand from passengers.
It’s a balancing act, but in the end, rideshare companies absolutely need passengers.
- Riders pay 20% less on average for rides compared to Uber or Lyft
- Riders can request a particular driver or same-gender drivers to feel safe
- The ability to add favorite drivers
- Get $10+ in free rides when you first sign-up for Empower
After passenger demand, the next question is: Will Empower have enough drivers for that demand?
While I like the same-gender driver requests, do they have enough drivers to make that a reality? Getting same-gender drivers is something Uber or Lyft could easily do but have not done so far.
They would solve a lot of their safety issues if they did.
What Else Does Empower Say About Their Services?
There’s not a lot about Empower out there, so much of this information comes from Empower’s FAQ section.
One thing that stood out to me:
“Drivers pay Empower a flat monthly subscription fee, which is significantly less than the amount that Uber/Lyft are taking from drivers. Empower is currently available in Washington DC Metro, NYC Metro, and Piedmont-Triad NC.
The first month is free! After that, if you indicate that you want to continue to receive ride requests, you’ll be charged your local market monthly subscription price.”
So it is a subscription model! Empower also says they provide drivers with a “suggested rate card” but drivers control their own rate cards.
How Much is an Empower Subscription?
Learn more about all their different subscription rates for drivers here.
Does Empower Provide Insurance to Drivers?
Empower does not provide insurance to drivers (you’ll have to find your own rideshare insurance for now).
What Are People Saying About Empower?
As with many other on-demand gig economy platforms, all these comments should be taken with a grain of salt. There will be trolls pumping Empower up as well as comments dumping on the company.
One RSG reader reached out to us about Empower, and he says he’s very happy with it, but he did complain he’s not receiving marketing materials and Empower doesn’t seem to be handling customer service well:
“I’m averaging about twice what I make with Lyft on their rides… They are a little slow on the uptake. I have now asked them for personal advertising materials about 5 times with no response. They don’t seem to get that every Lyft ride is a chance to convert people to their rideshare service. Oh well.”
Takeaways for Drivers: Is Empower a Scam?
I am not going to lie and say that Empower is redefining rideshare. From everything I have read, the company seems like it has actual passengers and drivers. They seem like they are expanding. I looked at the bios of the founder and the board of directors, and they seem like qualified legitimate professionals.
I wish Empower all the success because rideshare drivers truly need an alternative to Uber and Lyft. Unfortunately, there have been many casualties in this tough industry.
Can Empower survive with just a subscription fee charged to drivers to provide them with everything Uber and Lyft have not? Empower doesn’t look like a scam but will they be able to sustain their operations for too long without major funding?