I agree. The policy issue is between Taxis and existing legislation. The ethics issue is between Lyft. Taking a step back, this is one of the craziest market competitions that can exist, and it's going to be interesting to see how it plays out. Remember, Taxis didn't have nearly as fierce competition between themselves it reminds me of cable companies. Perhaps they'll eventually have to settle for different territories to manage.
I'd like to completely retract my statement! Reading the Senator's letter (https://news.ycombinator.com/item?id=8633683) put things in perspective for me. Forget bad for business, it's bad for human rights. Ethical grey area is an understatement.