There are some other excellent explanations in this thread, but it boils down to the idea that if drivers are employees, the company starts to care about how much they work. For example, if they work more than 40 hours in a single week, they need overtime pay. That means that a driver today who decides to work 80 hours one week and take a vacation the next would (if classified as an employee) be costing Uber a lot of money, so they will probably need to ban that behavior to stay competitive. From an employees perspective, this means they have less flexibility in their work schedule.