Regardless of legality and what the parties agreed to contractually, the fact remains that abrupt termination with zero severance is harmful for the former employee, especially in this economic climate. If the corporation pays a generous severance, the harm is reduced or eliminated. On a scale of ethicality, the more harmful an action is, the less ethical it is, so yes, paying severance is more ethical than not paying severance.
I find the terms "less and more" applied to ethical confusing. Telling a company to harm people a little instead of a lot is enabling.
My use of ethical here is strongly tied to obligation. e.g., it is kind to give money to a person, but not unethical if you chose not to especially if you can't afford to.
The way I understand you is that it's kinder/more sympathetic to provide a greater severance. This part I agree with!
Severance is not free, though. Increasing it will either cost Uber more heads or greater risk (and more heads later). I'm repeating this question: Is this not unethical to the retained employees?