It's a brilliant business move, since they are important enough to motivate many people to take on the work. The greatest value will come from having a group tracking the performance and methods of all these small entrepreneurial companies, to find the innovators. Most will invent nothing, just try to make a living akin to that of Uber drivers. A few will think, experiment, and figure something radical. Then they'll be rewarded handsomely (and absorbed) in order to scale up, to the entire country, and to the world.
What other business problems should be farmed out by current tech giants to small entrepreneurs in order to find better solutions? In a way, Apple's iOS app store was a mechanism that achieved something like that -- on a wider, deeper scale than they probably had initially conceived.