>>33398354virtually everyone uses pokemon in some capacity
only a smaller percentage of them are officially registered as trainers
only the people who are officially registered get to challenge gyms, go to E4, have a shot at becoming the champion etc but they also have to participate in battles if challenged.
Trainer cards are used for this purpose: they register who's an actual trainer as well as their total number of badges and various other info so most likely there'll be an exchange of that info before any challenge so both sides know what the likely difference in skill is.
Guy with the pidgey is then obviously not going to challenge the guy who's actively challenging the E4, other way around could happen but I imagine social conventions would find this very distasteful or perhaps it's even forbidden (remember the games are abstractions, like how it's fairly accepted the various gyms all have a near E4 main team and simply adjust what team they're using based on the skill level of the trainer currently challenging them, like brock probably has an aerodactyl he's not going to throw at the guy with the weedle)
And remember pokemon can be trained for a wide variety of purposes, battle just being a subset.
Wouldn't be unreasonable to assume that certain pokemon are used vastly more in utility roles (like machoke in construction work)