It sounds like you're already pointing to one concrete outcome that would come from these "driver protection" laws: the proliferation of driver co-ops that are able to undercut Uber and Lyft. Assuming they aren't regulated as Uber and Lyft are(for argument's sake), this would allow drivers the choice of whether to become an employee of the big corps or remain an independent contractor by using the co-op platform.

I don't think it would be much of a stretch to assume that in this situation you would have sleek, more expensive "luxury" services competing against more humble, but cheaper, community run services. Sounds like a much more equitable arrangement that provides greater choice for both riders and drivers.