What I'm guessing will happen if Uber/Lyft are forced to treat drivers as employees is that those driving full-time will be hired and everyone else will be let go. The employees will lose some control over what hours they work and may be forced to sign non-compete agreements (not sure if that would fly in CA).

What I don't understand is why Uber/Lyft don't just allow drivers to set their own prices. Whatever their pricing algorithm is it cannot possibly be better than an efficient market of riders and drivers bidding on trips.