Rideshare drivers are not employees. Anyone that works under 1099 status are not employees. They are independent contractors they are considered a business in the eyes of the law(IRS), and as such have more favourable tax laws and pay less in taxes than a W2 employee.
W2 employees have a set schedule, they are told what time to report to work, etc. granted some contractors are told this as well when they accept a job, but a contractor can choose not to accept a job if it doesn’t fit their schedule.
There are a few other things as well that differ between contractor and employee. Employee has better protections when it comes to hours worked, etc. because a contractor/1099 can choose the hours they want to work, where they want to work. Becoming a W2 employee you lose that freedom, and rely on your employer to set your wages, working conditions, etc. A 1099 worker set their own terms.