> There's nothing stopping Uber and Lyft from allowing people to work their own hours and also giving them benefits if they meet hourly qualifications.
There is, if the driver drives in bad hours making their income not come up to minimum wage uber would be forced to pay the driver anyway. In order to avoid this uber would be forced to limit when and where people can drive.
Being an employee means that the company has to ensure that the employees time is well spent so that it is worth the minimum wage and benefits at least. Being a contractor means that the contractor himself is responsible for what he is doing is profitable enough for him to live on. So changing them to employees means that now uber has to ensure every driver only drives when it is profitable for uber.
So everyone who wants to handle this responsibility themselves don't want to be an employee.