Uber Technologies Inc. has settled a pair of lawsuits challenging its driver classification policy, clearing a potential point of concern ahead of its upcoming initial public offering.

The agreement, which was filed late Monday and hit the news cycle this morning, concludes six years of litigation. The lawsuits sought to change Uber’s policy of classifying drivers working through its ride-hailing service as independent contractors. They argued that the company should instead consider drivers employees and provide associated benefits such as health insurance.

The first of the two cases gained class-action status shortly after it was first filed in 2013, growing to represent about 385,000 people. However, that number dropped to about 13,600 last year after Uber successfully convinced a federal appeals court that the arbitration clause of its driver agreement disallows class-action lawsuits. The court also narrowed the scope of the second case included in the settlement as part of its decision.

Under the $20 million deal, Uber will pay eligible drivers about 37 cents a mile for rides booked through its platform. Eligibility extends to drivers in California and Massachusetts who worked through the company’s platform from August 2009 to February 2019 and aren’t bound by its arbitration clause.

Uber has also agreed to change its driver deactivation policy. The company pledged to explain more clearly the reasons behind profile deactivations, create an appeals mechanism and provide drivers with assistance in regaining access to the platform.

The settlement needs to receive the approval of U.S. District Judge Edward Chen before it becomes official. In 2016, Chen rejected a bid from Uber to settle the cases for $100 million after finding the sum to be sufficient, but that was when the first lawsuit still had class-action status and represented 385,000 drivers.

Moreover, drivers can still individually file arbitration claims against Uber over its classification policy. Some 12,500 exercised this option between August and November of last year, a number which has presumably only increased since.

Photo: ell-r-brown/Flickr