No, they did
not agree to "drive for a service for X". They entertain
offers to drive at a given rate. They can choose to take those offers or not. That's the whole point of the on-demand, contractor-but-not-really relationship (see also the way that Lyft and Uber punish drivers to don't take absolutely every ride that pops up on the app) that underpins Lyft and Uber's business model.
They're refusing to entertain offers below a certain rate. That drops supply, which requires price increases to satisfy demand on the other side. The market, literally, is working as intended.