It's not just rubberbanding that is the issue. It's the fact that there's no common start. You always start last, some 20 seconds or so behind the leader. In a normal race with normal drivers 20 seconds is an impossible gap to close, especially over only 3-5 laps. In fact, even if everyone started together it would be a miracle to go from last to first in so few laps.
To address the issue, they would need to do the following:
- Increase race length. Perhaps they could even make this an adjustable setting, like in Arcade mode.
- Everyone starts the race together, rolling or standing.
- Replace rubberbanding with an AI "skill" setting that you can set before the race. They could also keep rubberbanding as an option, so if for instance my grandmother with no previous racing experience wants to try a race she can have a little easier opposition. Perhaps even add a setting that adjusts the tension of the rubberband, i.e. how big influence rubberbanding has on the AI. So if you want a lot of rubberbanding you set the tension to high, if you want a little you set tension to low, if you don't want rubberbanding you just untick the box.