There are plenty of companies and entrepreneurs that aren't artificially propped up by VC money that are waiting for any opportunity to eat Uber/Lyft's lunch.
In fact, many regional ride-hailing app companies already are.
Uber can afford to pay more and provide more stable employment.
They choose not to because it hurts their margins. Fixing this will help drivers and still won't put Uber out of business.
I'm pretty sure Uber are still losing money, and have never shown evidence of positive unit-margin, so I'm not sure they can afford this.