Does it matter who the employees are employed by? All rules for an employer apply just as well for the employing company as they would for Amazon if they employed them directly.
Uber agrees to pay X rate currently to drivers. A law is passed that makes X rate even more unprofitable.
Uber then engages the services of an external company which provides labor at a lower rate, fires all of the current Uber drivers, and encourages them to work for the new external company.
The external company, if sued, does not have the resources that Uber has, and simply goes bankrupt. The drivers are encouraged to work for yet another new company.
This process continues for a while as ride quality and driver satisfaction all suffers. Uber gets to lengthen the runway a bit longer, and either a miracle happens and the company continues operations or some other competitor swallows the market.
If Uber deals with many companies, they can just reduce demand at the company with the bad driver and increase demand at another one. The company with the bad driver can then retrench him, saying they need to cut someone.
(Disclaimer, I know very little about Uber and the US and it may not work for them specifically. But the idea certainly applies to other companies)
Believe it or not, they did think of issues like this when drafting the law. Especially since almost all of these other issues brought up in the comments are decades old and already addressed by existing labor laws.
Company X owns Company Y. Company Y builds an apartment building of low quality and hides the defects. They sell the apartments to individual buyers.
The individual buyers sue Company X years later upon finding the defects. The judge throws out the lawsuit and says "you can only sue Company Y, because that is the legal entity who built the building."
The only issue is that Company Y is several million dollars in debt to Company X and has absolutely no way of repaying anyone who sues Company Y.
When I look at any market where the labor code is excessively protective, I see high unemployment rates specially among the young - Brazil, Spain, France[3]... I don't know about causation but clearly there is a correlation between employee over-protection and unemployment rates. I think it is the law of unintended consequences[4] in action: the legislator intention was good (protecting employee) but the net result is negative.
[1] https://www.jonesday.com/en/insights/2017/12/brazilian-labor...
[2] https://www.capital-ges.com/an-insider-view-of-the-brazilian...
In France for example, it is difficult for a company to fire an employee once they are legally hired.
Oracle, for example, has a policy of initiating an "intra-country transfer" where the employee is mandated to relocate from Paris to Montpellier. Not everyone wants to uproot their family like that. And then if they do accept the move, next year Oracle will relocate them to Bordeaux...
In Brazil employers have to pay a fine if they fire a worker without a "fair cause" (~ 3.2% over the sum of all compensation paid to the employee while they worked for you), so the longer someone worked for you the more expensive it gets to fire them.
Those employees can't sue the client company, they can only sue contractor company - that suddenly goes poof and doesn't pay out anything when a dispute happens. Good luck forming a union coz then the company will go poof too
It basically just moves the onus onto the employee willing to sign up for a shit job with no perks and absolves the govt/client company.
The answer to this is to form a bigger union so that only the bigger contracting companies can survive, and then have high-paid union executives who can negotiate large industry-wide contracts between employer and labor provider that provide some minimal level of protections but largely protect the status quo.
Then, those in the employer camp can donate to conservative causes complaining about unions and regulation, and those in the labor provider camp can donate to progressive causes complaining about evil corporations and lack of worker rights.
From here, the leaders in the two factions will variously ping pong and vacillate and make various and sundry unfruitful negotiations while taking the advice from various lobbyists about how they might improve the state of affairs and generally enrich themselves through back channel dealings with their benefactors from either camp.