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 \u2014 but which is accused of operating outside of Taxi & Limousine Commission regulations.<\/p>\n
City lawyers filed court papers Friday in Manhattan state court against Yazam Inc.<\/a>, charging that the company\u2019s Empower app has been \u201cflagrantly flouting\u201d the law since 2022 by operating as an unlicensed dispatcher of for-hire vehicles in the five boroughs.<\/p>\n \u201cNew York City will not tolerate companies that flout the law while putting drivers, passengers, and the public at risk,\u201d Steve Banks, the city\u2019s corporation counsel, said in a statement. \u201cAs detailed in our complaint, Empower has been conducting business in clear violation of New York\u2019s licensing laws and other regulations, and we are seeking relief to halt these unlawful practices.\u201d<\/p>\n The lawsuit marks the latest escalation in the city\u2019s maneuvering against Yazam and its chief executive, Joshua Sear, who are facing millions of dollars in fines<\/a> in Washington D.C. for being in contempt of a 2024 court order<\/a> to cease operations.<\/p>\n The company, which operates as Empower, has repeatedly run afoul of the TLC, which regulates the city\u2019s sprawling taxi and for-hire vehicle industry, by not playing by the commission\u2019s rules, which include collecting per-trip taxes and surcharges.<\/p>\n TLC has warned drivers that they risk losing their licenses<\/a> and getting slapped with fines of up to $500 by signing on with what the regulatory agency describes as \u201cunlicensed software platforms that serve as bases by connecting drivers with trips.\u201d TLC has also said that vehicle owners who link up with the service could face fines of up to $10,000.<\/p>\n 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.<\/p>\n The latest letter urged the company to immediately deactivate the Empower app, and to contact TLC to \u201cdiscuss the application process for a For-Hire Vehicle Base license.\u201d<\/p>\n \u201cWe will not look the other way while illegal operators undermine our laws, exploit drivers, and put passengers at risk,\u201d said Jason Kersten, a TLC spokesperson. \u201cThis action against Empower sends a clear message: if you operate in this city, you must play by TLC rules.\u201d<\/p>\n Court papers point out that undercover TLC enforcement agents flagged Empower 32 times for unlicensed activity in 2022 and 2023.<\/p>\n \u201cEmpower ignored each of these violations, resulting in default judgments against it,\u201d the court papers charge. \u201cAt no time has Empower sought to respond to, or dispute, any of these violations.\u201d<\/p>\n According to TLC, another 38 violations have been issued against Empower since Feb. 4 of this year.<\/p>\n Empower \u2014 which also operates in Baltimore, South Florida and Winston Salem\/Greensboro, N.C. \u2014 was founded in 2020, with drivers paying a subscription fee for a service that Sear has said allows them to \u201ctruly run their own businesses\u201d while offering cheaper fares than the more established Uber and Lyft.<\/p>\n The company touts that it lets drivers set their own rates and get 100% of the fare.\u00a0<\/p>\n 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 \u201can astonishing display of defiance.\u201d<\/p>\n He also slipped in that he was bringing in TLC\u2019s most recent commissioner<\/a>, David Do, as Empower\u2019s senior vice president of government and regulatory affairs \u2014 only for Do to decide against taking the job<\/a> days later.<\/p>\n 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\u2019s 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.<\/p>\n \u201cBy operating outside the law, they undercut responsible companies and put both drivers and riders at risk,\u201d Abreu told THE CITY. \u201cThis lawsuit sends a clear message that no company gets to profit by exploiting workers and ignoring the rules.\u201d<\/p>\n Valdivia, the new TLC commissioner, has also vowed to shut down<\/a> Empower.<\/p>\n