If your contractor uses the outside, he will overestimate the quantities and when he shows you his estimate, it will be higher than his actual cost....difference goes in his pocket.
As an example take a 70-foot L-shaped driveway that is 10 feet wide. If he takes the outside length, it will be 80 feet. That will result in a 14% overage. If his unit price is $20/sf for placement, he will be charging you $2000 more than if he had measured it correctly, but he will only pay for what he puts in....the $2000 extra goes in his pocket.