What’s next for Uber drivers’ lawsuit?

Uber has agreed to pay up to $100 million to settle a class-action lawsuit which resolves a major challenge to its business model by allowing the ride-hailing service to keep its California and Massachusetts drivers as independent contractors.

The lawsuit had claimed that Uber [UBER.UL] drivers are employees and thus entitled to reimbursement of expenses.

The case against Uber had been closely watched in Silicon Valley, as other companies in the on-demand tech economy share Uber's reliance on independent contractors. The class action had been scheduled for a trial in San Francisco federal court in June.

"We realize that some will be disappointed not to see this case go to trial," said Shannon Liss-Riordan, an attorney for drivers.

However, Liss-Riordan said the plaintiff drivers faced significant risks of losing if the case moved forward, particularly because a federal appeals court had recently agreed to review an order allowing Uber drivers to sue as a group.

Nothing about the settlement prevents a future court, or U.S. labor authorities, from deeming Uber drivers as employees, she said in a statement.