Uber and Lyft Live Once Again

What drivers think of AB 5, why it was written, and the pricing differences between services

Image Source: FoxBusiness

My post last week started with a bold claim: Today, Californians can call an Uber. Tomorrow, they can’t. Lyft had announced that it would shut down and there were signs showing that Uber was going to as well. However, if you live in California and open your Uber app today, you can prove that this didn’t happen.

In this post I’m going to explain why they didn’t close and address a few follow ups from readers: what do drivers think of AB 5? How did it get written in the first place? What are the differences in pricing between Uber, Lyft and taxis, and how would reclassification change the competitive dynamics? Let’s get into it.

What happened?

After I published the piece, an appellate court granted Uber and Lyft a temporary reprieve which delayed the order that would’ve forced the companies to reclassify their workers as employees. The reprieve didn’t resolve the issue. It simply granted Uber and Lyft more time. 

In a way, this is worse for Uber and Lyft. Previously, they would’ve shut down their services for a few months until voters could decide what the policy should be. While less people are using rideshare (Uber mobility’s Q2 2020 top line is about 1/15th the size of what it was in Q4 2019), it still would’ve reminded riders of the value Uber provides. Even if a rider had just one frustrating experience — failing to be able to get across town, for example — it could have pushed the ballot in Uber’s direction. 

But now that Uber and Lyft can remain open, what will voters decide? We’ll have to see in November. 

What do drivers think?

One request I heard from a couple readers was to analyze what the drivers thought about the bill. 

Learn more

This post is for
paying subscribers

Subscribe →

Or, login.

Read this next:

Napkin Math

Should you invest in Wish? An S-1 Analysis

A look inside the S-1 of Wish. Included is the background of Wish, a look at their margins, how the universal postal union is changing their cost structure, how their CAC is rising and if they are viable long-term.

17 Dec 1, 2020 by Adam Keesling

Napkin Math

Why MasterClass Isn’t Really About Mastery

And other lessons from a 9-figure edtech startup

82 Jul 1, 2020 by Adam Keesling

Napkin Math

How Costco Convinces Brands to Cannibalize Themselves

An unlikely marriage where both sides win

121 Jul 15, 2020 by Adam Keesling

Napkin Math

First Steps to Buy A School Bus Company

Last week I pitched the idea of buying a school bus operator. This week I tell you how to do it.

6 🔒 Sep 9, 2020 by Adam Keesling

Napkin Math

What You Need To Know About The Ant Financial IPO

The largest IPO in history is happening in China with Ant Financial. In this post, we discuss all the services Ant Financial provides and what to expect in the future from Ant.

5 Oct 30, 2020 by Adam Keesling

Thanks for reading Every!

Sign up for our daily email featuring the most interesting thinking (and thinkers) in tech.

Subscribe

Already a subscriber? Login