Uber agreed last week to settle two class action lawsuits for $100 million. The legal actions were filed by drivers in California and Massachusetts to determine if they could be reclassified as employees instead of independent contractors, to receive benefits they lack now. Had the lawsuits proceeded to trial and Uber had lost, the outcome could have cost the firm billions in employee expenses.

Drivers suing Uber Technologies, the ride sharing company, had argued that they should be treated as employees because the company exerts significant control over their work, sets compensation and enforces vehicle standards.

Uber’s argument, according to a Dow Jones report, has been that it prefers to use independent contractors over employees because they are not covered by certain legal and tax liabilities which can cost companies less in pay and benefits. “Employees are generally covered by protections such as minimum-wage and anti discrimination statutes, workers’ compensation and union-organizing rights, while independent contractors have no such protections.”

The tentative settlement represents approximately 385,000 drivers in California and Massachusetts who complained that they should be reimbursed for necessary expenses related to the business, and for losses incurred during the discharge of their duties. Uber now is allowed to continue its fast-paced business using independent contractors as drivers. In a press release, Uber said it agreed to pay $84 million, with a second payment of $16 million if it goes public and its valuation increases one and a half times from that of December 2016. USA Today reported that Uber CEO Travis Kalanick stated in March that he didn’t expect the company to go public this year, and in fact “would put that event off as long as possible.”

U.S. District Judge Edward M. Chen of Norther District of California must approve the settlement before moving forward. Shannon Liss-Riordan, representing the Uber drivers, has already stated that the settlement is a victory for her clients. “We realize that some will be disappointed not to see this case go to trial. We believe the settlement we have been able to negotiate. . . provides significant benefits, both monetary and non-monetary, that will improve the work lives of the drivers and justifies this compromise result,” she said in a statement.

Dow Jones Morningstar reported last Friday that “for a company that has raised more than $10 billion in debt and equity, the payment is a small concession relative to the larger triumph of preserving the high-margin business of connection passengers to freelance drivers.” It said that losing these cases at trial could have forced the company to reclassify drivers as employees, which could have cost Uber billions, paying for health benefits and auto expenses. And it could have jeopardized its long-term prospects for profitability.

The report further stated that approval for the two class action lawsuits is by no means assured. “Two weeks ago in a similar case, a federal judge rejected a settlement between Lyft and California drivers. The judge said the settlement amount of $12.25 million shortchanged drivers’ mileage expenses, and a revised proposal could be filed by the end of May. Lyft said it believed the agreement was fair and is evaluating next steps.”

One clear victory for drivers in the settlement is a plan to revise Uber’s policy for deactivating them from the service. As part of the case, Uber was forced to release a series of internal emails on driver termination to the court, showing that drivers could be “deactivated” for passenger ratings that fall below 4.5 on a five-point scale. Uber now plans to roll out new procedures for warning drivers when they have received a high number of complaints and being more transparent with the ones it kicks off the app,” Dow Jones reported.