Drivers are being paid as independent contractors. Under the current Uber model, they are not independent contractors as defined by labor law (nor the IRS). Ergo, Uber is in violation of both labor law and tax regulations; if they are found to have violated IRS employee classification rules, they'll be liable for back taxes, penalties, and officers of the company can be held personally liable.

> What evidence is there that they are actually employees besides the fact that lawyers and union activists want them to be?

You must be blinded by some sort of belief that Uber is the victim here; my apologies. Employee vs independent contractor classifications can sometimes be difficult, but the gist of it is:

If you tell someone how to do the work, and you set the price, they're an employee; if you give someone the work, they set their prices, and they have control over how the work is performed, they're a contractor.

Guess which model Uber uses?