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IIUC, AB5 might end up making Uber a monopoly in California (and US if other states follow suit) via regulatory capture.

Currently, most drivers seem to drive for both Uber and Lyft (based on their cars having stickers for both). But if classified as employees, and being guaranteed a minimum wage, then Uber/Lyft might require them to be exclusively available. As a result, the drivers will have to choose either Uber and Lyft and since Uber has more market share, they will likely choose Uber and Lyft will be squeezed out.

What am I missing/misunderstanding above?



I am very curious to see how this will be implemented.

Will drivers be entitled to minimum wages from all of the apps they have active, or only when they have a fare?

Will there be a single union to bargain with all of the apps, or individual unions?


Not that many people will agree to exclusivity for minimal wages, certainly not for hours they aren't scheduled and paid.


True, but the majority opinion driving AB5 seems to be that most drivers are doing this as their full time jobs. Yes, there are those who drive a few hours occasionally as a hobby or for extra side income, but they don't count much. If the number of Lyft drivers falls significantly, consumers will have to wait longer to get a Lyft ride and they will start abandoning Lyft. Hastening the spiral.

Another comment mentioned that Lyft might pay drivers more to keep them, but given that both Uber and Lyft are hemorrhaging money, it seems unlikely that either will be willing to pay drivers more. Also, Uber just needs to pay the same as Lyft for a little while, and just wait out the decline of Lyft due to AB5.


> Yes, there are those who drive a few hours occasionally as a hobby or for extra side income, but they don't count much.

The post from Uber clearly states "In the US, 92% of drivers drive less than 40 hours per week, and 45% of drivers drive less than 10 hours per week."


How are they counting? Would not be surprised if those numbers were only including time driving to pick up and driving to drop off.


Curious where you are getting that most drivers are full-time. Every time I make conversation with my Uber/Lyft driver, I often learn it's just a side hustle for them that supplements their 9-5 (n > 20).


Lyft can simply offer more money and accept lower margins.


So can Uber, that's just a race to the bottom.


Assuming that Uber has a competitive advantage because of their brand, and both Uber and Lyft are rational actors who want to maximize their profits, they will end up in a state where Uber has higher margins than Lyft.


> Assuming that Uber has a competitive advantage because of their brand

Woah - I see Lyft as the one with the competitive advantage due to Uber's brand. Uber is toxic while Lyft is seen as friendly.




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