It sure is a lot of fun speculating on what these arrows actually mean. I too would like to hear an official response. Untill then, let's speculate some more.
I don't think it has anything to do with mood because that's to hard to program into the game.
I believe it has a lot to do with what feeds the drivers ego and the arrow let's you know when they need to be fed. I find that gaining xp points and winning, is what feeds their ego. I have 4 drivers from level 1-17 and If I run the lead guy multiple times in the same race, his arrow points down. I also noticed that the xp points gained are much lower after the first run. If I put him in a new race, his arrow goes up and the xp level climbs much faster.
The drivers at the lower levels are easy to keep happy because I can run them at a higher level. I ran a level 7 driver at level 9 and his level increased to 8 in just one run. He was very happy and his arrow went up.
I presume that when my lead driver reaches a level 30 or higher, it will be much more difficult to keep him happy. Let's face it! how many times can you run an endurance race before you quit?
I think it's only humane to let the guy retire early before he reaches that level and keep training some new ones. I certainly hope my strategy works out. As I said in the beginning, we can only speculate.
It would be great if Katz or one of his interns could give us a definite answer as to what these arrows actually mean. Until then, be happy speculating.