Class Action Alleges Rideshare Company Empower Chooses Not to Insure Drivers, Run Background Checks

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New rideshare service Empower faces a possible class action lawsuit that claims the company’s low prices are achieved by violating consumer safety laws that require insurance coverage and background checks for drivers.

According to the 20-page case, Yazam Inc., who does business as Empower, has run afoul of the District of Columbia’s Consumer Protection Procedures Act, which requires rideshare companies to ensure that drivers have $1 million of insurance coverage and that background checks are performed on all drivers employed by their services.  The suit claims that Empower neither supplies auto insurance to its drivers nor requires them to maintain any coverage of their own, and purportedly conducts no background checks of any kind on its drivers.

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According to the suit, Empower presents itself as a more affordable rideshare service next to Uber or Lyft.  The case contends, however, that consumers like the plaintiff, who allegedly suffered a car crash as a passenger in an Empower driver’s vehicle, were late to learn that one reason Empower can undercut its competitors’ pricing is because the company is “consciously violating” insurance requirements for rideshare companies.

The lawsuit attests that by marketing itself in a similar manner to other established, law-abiding rideshare services, Empower deceives users into presuming it also adheres to consumer protection laws such as those requiring mandatory auto insurance and driver background checks.  As the case reads, the company’s “entire business model (including specifically the company’s terms of service) appears to have been designed to evade the insurance requirements set forth in that section [of D.C. code].”

The filing charges that the defendant has been and remains “willfully blind” regarding whether its drivers are covered by adequate insurance.

“Through its actions, Defendant Empower not only fraudulently misleads its passenger-consumers; it also exposes them, other road users, and even its own drivers to the risk of financial ruin in the event of a crash,” the complaint alleges.

As the suit claims, D.C. law mandates that rideshare companies perform background checks on all drivers, including complete driving records, checks for any criminal history, and checks against the national sex offender registry.  Despite these requirements, Empower has not conducted any such background checks and continues not to, the case alleges.

The lawsuit looks to represent anyone who has used the Empower app to book and take rides beginning or ending in the District of Columbia since Empower began operating there.

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