Yes, by common law, you cannot work for two people
at the same time. This is the key. While moonlighting is an employer restriction, working two separate jobs at the same time is a legal one.
When an employee, you are legally the agent of the employer. Anything you agree to or do while employed is a liability of the employer, not you personally. That is why an employee at a VC firm can commit to provide capital, but doesn't have to pay it directly. Or why a manager of a company can take on debt, that is then the responsibility of the company, not himself.
You cannot be an agent of two companies at the same time. If you have both uber and lyft app running in your car, waiting for a passenger, and you get into a crash, if you are an employee working, then one of the companies is responsible for covering any damages you inflict. Of course, since you're not even on any particular 'job' at the time, who is responsible?
Moreover, you cannot have two companies paying you by the hour for the same hour.
Moreover, the law presumes that employees owe loyalty to their employer while working. So for example, if I am employed by a car dealership, but when a customer comes in during my shift, I decide to sell him my personal used car, instead of the companies, the company can actually sue me for failing to fulfill my duty of loyalty to them. You can't have someone working for both Uber and Lyft in this model. Since Uber and Lyft are competitors, by definition, you cannot be loyal to both. If you have both apps running and pick the best customer based on price, then you have shortchanged one of the companies, and open yourself up to liability. Contractors have no presumed assumption of loyalty to anyone but themselves. That is what allows them to pick the most profitable ride.
https://www.abacademies.org/articles/the-duty-of-loyalty-in-...
Uber has asked for California to come up with legal structures that provide benefits to employees while allowing their business model. This seems eminently reasonable: there are clear differences between Uber and Lyft drivers and traditional employees. It is the duty of government to innovate policy-wise so that the private sector can innovate business-wise. Unfortunately, California's legislature has failed to innovate anything and has instead decided to force innovators to use an outdated model of employment.