On Thursday last week, Uber has reached a settlement in two high-profile class-action lawsuits California and Massachusetts. The two lawsuits claimed that drivers in those states should be classified as Uber employees, not as independent contractors. The proposed settlement, yet to be approved by the judge, includes:

Monetary Settlement – $100 million

Uber will pay $100 million to approximately 385,000 drivers in California and Massachusetts. $84 million will be paid to the plaintiffs immediately. The remaining $16 million will be payable if the company goes IPO, and the average valuation increases to 1.5 times of its last financing round, which valued the company at $62.5 billion. According a report on fortune.com, the average payment to each driver will be “as little $12 apiece or as much as a few thousand dollars, depending on how many miles they drove.”

Driver status as independent contractor – Unchanged

The parties to the lawsuits have agreed that drivers will continue to be categorized as independent contractors not employees. This is a major victory for Uber as it has long objected to classifying drivers as employees.

Tips – Allowed

Uber’s app does not include a tip option, and the company has prohibited drivers from requesting tips. Now under the settlement, drivers are allowed to solicit tips. Drivers can now post signs in their vehicles clarifying tips are not included in the fare.

Termination appeal – Allowed

Previously Uber terminated drivers from their platform with little explanation. Now they have agreed to make the rating system more transparent and will provide more information about how the ratings are calculated. Uber will also implement an appeal process for drivers who have been terminated due to low ratings.

Penalty for declining rides – Not allowed

Drivers used to be penalized and even terminated when they rejected too many rides. Under the new settlement, there is no penalty for declining a ride.

Driver Association – Allowed

Uber will help establish driver associations, where leaders of the associations meet with company management team on a quarterly basis to discuss issues important to drivers.