Uber and Lyft Live Once Again

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.