You know it's a ride with pickup in an area. You are free to take the gig or not. You get paid for the gig. That is you choosing your work. That makes it a contract. People who do more work can be compensated better -that has nothing to do with whether or not its a contract.
W2 means you get paid salary or by the hour. Have you ever seen a W2 stub? It doesn't have 'projects' on it. It has a pay rate. Becoming W2 for drivers means they have a salary, and a bonus. So now they're hourly employees. This is literally on the W3 form employers submit to the IRS every year. Not knowing the paid amount before hand is one of the things making it a contract, yet you're claiming not knowing how much you will get paid makes it W2. Amazing gymnastics.
The idea of it being a "contract" isn't in dispute. It's about whether these employees can legally be classified as "INDEPENDENT contractors". They aren't independent in the normal sense of word (I'm paying particular attention to your gymnastics around how workers can't specify their rate) nor in the legal sense.
They don't have a rate. That's the whole point. A W2 employee has to have a rate, hourly/annual/weekly/etc. They have a salary or rate. A 1099 is the only way you can charge per project instead of per rate. When you determine how much you get paid for the project you yourself pick and start is irrelevant to whether you're independent and 1099. In fact if you include contractors working on your house repairs, you have an estimate and agree on the total well into the project.
paid per project you choose yourself =contractor. salary or rate =employee.
determining how much you get paid has nothing to do with employee or not. in fact, as I keep stating, not knowing how much you get paid literally makes you not an employee.
Each individual ride has a price/rate, and the workers of Uber can't set their own rates. Yeah, I know workers don't have a single hourly wage. Pointing that out doesn't obscure the fact that Uber and Lyft dictate completely the most important aspect of working for them. This is totally different from the idea of working as an independent contractor both in spirit and legally.
That doesn't sound very independent to me.