The driver took a big risk and expected a big reward, but that didn't work out, but it was his own decision. Personally I wouldn't buy a luxury car based on the promise of a startup, certainly not if I wasn't able to afford it to begin with.
Most people have a very poor ability to assess and measure risk. These drivers see an opportunity to make money, and use that to get a loan to buy the car.
Everyone is losing here. The driver goes bankrupt, the metro area loses as Uber puts cabs and black cars out of business and takes business from public transit, and ultimately the investors since Uber tapes $10 bills to each ride.
Will I blame my employer for limited notice? Sure.
Does my employer have legal liability? Not in my state. Maybe for 2 weeks. If I hire the right lawyer, maybe until a "reasonable time to find a new job"
Ethical? Maybe, some.
They changed that pay structure, and he got screwed, with little recourse. He had an opportunity to complain to the head of the organization which made that change and took it.
The CEO in this situation could have been more supportive, understanding and offered some recourse... even if it was just to email some HR or driver support person at Uber, that would have been a better response.
Instead the CEO felt attacked, kicked in his defensive mode, was flippant and dismissive of this persons struggles. Zero compassion or empathy, that's the problem here.