New York City is going to court in a bid to shut down a controversial ride-hailing service that offers cheaper trips than Uber and Lyft — but which is accused of operating outside of Taxi & Limousine Commission regulations.
City lawyers filed court papers Friday in Manhattan state court against Yazam Inc., charging that the company’s Empower app has been “flagrantly flouting” the law since 2022 by operating as an unlicensed dispatcher of for-hire vehicles in the five boroughs.
“New York City will not tolerate companies that flout the law while putting drivers, passengers, and the public at risk,” Steve Banks, the city’s corporation counsel, said in a statement. “As detailed in our complaint, Empower has been conducting business in clear violation of New York’s licensing laws and other regulations, and we are seeking relief to halt these unlawful practices.”
The lawsuit marks the latest escalation in the city’s maneuvering against Yazam and its chief executive, Joshua Sear, who are facing millions of dollars in fines in Washington D.C. for being in contempt of a 2024 court order to cease operations.
The company, which operates as Empower, has repeatedly run afoul of the TLC, which regulates the city’s sprawling taxi and for-hire vehicle industry, by not playing by the commission’s rules, which include collecting per-trip taxes and surcharges.
TLC has warned drivers that they risk losing their licenses and getting slapped with fines of up to $500 by signing on with what the regulatory agency describes as “unlicensed software platforms that serve as bases by connecting drivers with trips.” TLC has also said that vehicle owners who link up with the service could face fines of up to $10,000.
TLC first hit Empower with a cease-and-desist letter in May 2022, according to court papers, then followed up with another one on March 18.
The latest letter urged the company to immediately deactivate the Empower app, and to contact TLC to “discuss the application process for a For-Hire Vehicle Base license.”
“We will not look the other way while illegal operators undermine our laws, exploit drivers, and put passengers at risk,” said Jason Kersten, a TLC spokesperson. “This action against Empower sends a clear message: if you operate in this city, you must play by TLC rules.”
Court papers point out that undercover TLC enforcement agents flagged Empower 32 times for unlicensed activity in 2022 and 2023.
“Empower ignored each of these violations, resulting in default judgments against it,” the court papers charge. “At no time has Empower sought to respond to, or dispute, any of these violations.”
According to TLC, another 38 violations have been issued against Empower since Feb. 4 of this year.
Empower — which also operates in Baltimore, South Florida and Winston Salem/Greensboro, N.C. — was founded in 2020, with drivers paying a subscription fee for a service that Sear has said allows them to “truly run their own businesses” while offering cheaper fares than the more established Uber and Lyft.
The company touts that it lets drivers set their own rates and get 100% of the fare.
Sear testified at the March 12 City Council confirmation hearing for new TLC Commissioner Midori Valdivia that the company had provided more than 100,000 rides in New York City in the prior week, a move that court papers describe as “an astonishing display of defiance.”
He also slipped in that he was bringing in TLC’s most recent commissioner, David Do, as Empower’s senior vice president of government and regulatory affairs — only for Do to decide against taking the job days later.
The lawsuit against Empower came as the office of state Attorney General Letitia James is reviewing potential violations by the company. City Councilmember Shaun Abreu, chair of the council’s transportation committee, has also said Empower is failing to collect legally required fees and taxes on each trip, including congestion pricing charges, sales taxes and airport surcharges.
“By operating outside the law, they undercut responsible companies and put both drivers and riders at risk,” Abreu told THE CITY. “This lawsuit sends a clear message that no company gets to profit by exploiting workers and ignoring the rules.”
Valdivia, the new TLC commissioner, has also vowed to shut down Empower.
There are more than 115,000 TLC-licensed vehicles, according to agency data, including more than 82,000 the so-called high-volume for-hire vehicles. Those include vehicles from Uber, whose arrival in New York in 2011 upended the yellow taxi stronghold, while also crowding city streets.
Sear and a spokesperson for Empower did not immediately respond to a request for comment from THE CITY.
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