Yeah, that's how it worked previously with taxi medallions. They "worked together as an industry" and medallion owners extorted drivers and it was impossible to get a cab at rush hour and taxis were dirty and reeked of cigarette smoke because there was no competition.

The simple fact is, if you want enough vehicles to meet peak demand, then a lot of those drivers and vehicles aren't needed the rest of the day. That's just economics. It's not a false binary, it's simply how supply and demand works. You either kick a bunch of them off or lower the pay until they a bunch of them kick themselves off.

Or you go back to not meeting demand so that all drivers can work full time, and it once again becomes impossible to get a ride during rush hour.