It’s a much more complex issue than you are reading into it.

Lyft here is not opposing a plan to ensure drivers make a minimum wage nor opposing a plan to incentivize companies to increase their utilization rate, which is a measure of how much productive traffic they add to the city instead of unproductive traffic.

On the first issue, Lyft is saying that the specific implementation of a minimum wage policy is going to hurt drivers by lessening ride demand overall. Their reasoning is that the policy mandates the wagechange must apply individually to every single ride, rather than applying in aggregate to each driver over longer time spans like a week.

If Lyft can compete through price changes on a ride by ride basis, yet still ensure that at an aggregate level the driver meets or exceeds the wage requirement, this gives Lyft more levers they can pull to keep prices lower for customers and/or strategically decide which types of traffic patterns ought to be paying higher prices that subsidize the wage requirement.

The current policy disallows this type of “smart pricing” and instead insists that all rides must raise in price, which is likely to lead to decreased demand overall, especially for short rides that are less problematic in terms of return-trip utilization risks.

This issue had little to do with Uber except maybe that Uber had greater capitalization to ride out more losses while this law kills off competitors. But Uber drivers could be just as negatively affected as any other drivers from the specific way that a wage requirement is being carried out.

The other issue is very different, it is about rewards given to companies based on the company’s demonstrated utilization rate, which is in part a function of the amount of ride liquidity that company has, which is basically a proxy for market share.

Lyft is asking, hey, if the goal here is to reduce unproductive traffic in line with some studies on traffic congestion, etc., then why is there an individually-calculated reward on a company by company basis that is partly calculated using a proxy for market share? How does that solve the city congestion problem?

For example, let’s say that the city did some research and knows that if companies operate with utilization rate of 60% or higher, this is “good,” and they want companies to have a financial incentive to reach that.

One way would be to offer a price break, freedom to pay drivers less than the new minimum wage requirement, as a reward for hitting the utilization mark.

Instead of that, the law is choosing a formula not based on something like that 60% number from studies or other factors. Instead, it is saying, hey so Uber had a utilization rate of 45% (pretty bad for the city, way less than 60%), but their 45% number (partly due to their market share) is better than say Lyft’s utilization at 40% or something.

In that case, Uber would get more price break than Lyft, because 45% is higher than 40%, despite neither one hitting the mark necessary at 60%.

Worse yet, because Uber’s ability to engineer 45% utilization is largely just because Uber happens to have a larger volume of ride inventory, the reward had nothing to do with proactive policy on Uber’s part, but is instead literally codify the idea of “the rich get richer.”

Many alternatives make more sense in terms of helping the city and preserving fair competition, for example:

- basing price breaks on city-wide utilization target levels that apply to everyone.

- basing price breaks on the amount utilization increases over time, so that the people making the biggest improvements get the biggest rewards.