DC has a rideshare app called Empower that charges 20-40% less than Uber. (Drivers like it too because they keep 100% of the fare. Drivers pay a monthly fee.)

For people without cars, that price difference is a big deal. It can be the difference between getting to the clinic and skipping an appointment. Between going out with friends and staying home. Between walking home alone after a night shift after buses stop running.

I use Empower constantly. So do a lot of people I know who can't afford cars in this city.

DC is trying to shut it down because of liability insurance. DC law requires $1 million per ride.

The $1 million requirement isn't sized to typical accidents. When $100,000 is the limit available for an insurance claim, 96% of personal auto claims settle below $100,000.

When there's a $1 million policy available, plaintiffs' attorneys have strong incentives to pursue cases they'd otherwise drop and to push for higher settlements. Some fraud rings have popped up aiming to profit from these million dollar requirements.

When I started looking into this, I assumed Uber was the villain, profiting from overpriced insurance. On Reddit, some drivers said insurance ran about 30% of the fare. Insurance reaches 30% of the fare in states with the most stringest versions of the $1 million mandates (NY, CA, NJ).

The $1 million mandates raises prices (between 5-30%) and kills competition. Small companies can’t afford that coverage. Empower can offer $7 rides partly because it circumvents the mandate. DC is shutting it down for exactly that reason.

The people who suffer most are price-sensitive riders, who I haven’t seen mentioned as much in how news covers this debacle.