I hope hindsight doesn't forget that it was indeed a gamble. Homejoy made a similar bet in the housecleaning industry, but couldn't find a way to pay the illegal workers that make up a good portion of the industry (there were other issues Homejoy mentioned, but this one stood out to me - I could be wrong though).
Has the IRS ruled yet on whether Uber and Lyft are going to owe hundreds of millions in back taxes and penalties due to misclassifying drivers as independent contractors? No? Still plenty of time to be shut down.
Point being...under existing regulations, Uber/Lyft drivers are probably W-2s. But Uber/Lyft are lobbying hard for an alternative, and will probably succeed in changing minds about it faster than the government can move to crack down.
I'd imagine in some markets Uber would actually benefit from W-2 workforce - this would allow them to mandate hours and location to avoid the dreaded (by consumers) surge pricing.