I'm going to make this a short and sweet explanation.
Please note what I'm saying below is for the most part accurate, but like anything in life, there are exceptions that defy the norm.
These drivers are not employees, they are independent contractors, also known as gig workers.
What's the difference?
Independent Contractor – Think of an independent contractor as another business. In some states and countries, they are even required to be a registered business and have a business license.
Uber pays this other business for the service they provide, not for the person. This independent contractor can make their own hours and work for other people. Uber is not responsible for the independent contractor.
Uber is a software company. Ubers clients are the people who want food or a ride. The independent contractors client is Uber. Independent contractors, if they are smart and have good work ethic can usually make more than an employee in most sectors. Unfortunately driving is not one of those sectors these days.
Employee – An employee is a business paying for the person. The person has a specific skillset the business would like to retain for its own use on a regular basis. An employees client is one and the same as the business they work for.
The business pays the person, and can dictate when the person needs to be available, where they have to work, and can set other arrangements via a contract that the person can agree to, usually in exchange for stable fixed income. Employees for the most part earn less then independent contractors but have the benefit of job security.
What's the big deal with drivers right now? Basically, they're getting fucked because driving isn't a skillset that brings a lot of bargaining power to the table when discussing rates as an independent contractor. Uber can get away with paying shit because everyone knows how to drive so there's a highs surplus of contractors who are willing to work for peanuts, diluting the bargaining power of the contractors to demand better rates for the service they provide.
So all these people who still want to drive but not get paid shit are trying to become employees of these business's.
Hope that clears up any confusion.