The problem is the rules in Option 2 that would enable them to remain classified as a contractor. Specifically, Uber would have to allow drivers to set their o

The problem is the rules in Option 2 that would enable them to remain classified as a contractor. Specifically, Uber would have to allow drivers to set their own rates. From an end user's perspective, that's a big shift from where we are today. The vast majority of people taking Uber/Lyft never took Lyft when you set your own "tip." There is a reason Lyft switched: users hate "tipping", drivers sometimes get screwed, and it is confusing. Humans aren't known for their rational purchasing decisions. On the other hand, letting drivers set rates now requires users to pay attention whenever they call a car. Rates fluctuate rapidly with wild variation—think how much we love buying airline tickets—so drivers who want to make a living are now in effect playing the stock market. Maybe that's a good thing, to leave it to the market. Maybe it isn't. Either way, it is a large change in the status quo.