I don't believe the iPhone will use the GPS on it's own. It needs an app to request the use of the GPS. The iPhone alone does not have a Workout app like the AppleWatch.
The OP indicated that both he and his wife are using the iPhone with an AW (or other fitness tracker). Therefore, unless he's using a 3rd party app, the GPS is not in play.
The solution would be to use an app that can request the use of the GPS. Endomondo works for sure, but some may be put-off by the constant nagging to "go pro". I'm sure there are other apps that can track an outdoor walk.
Note, most apps, once calibrated via the GPS, can handle indoor walks and treadmill walks pretty accurately.