Drivers' insurance on ride-hailing platforms falls short in implementation

Despite the legal requirement, many drivers remain unaware of such coverage, and even those who are aware often lack access to formal policy documents or clear instructions on how to make a claim, say experts.

Nearly five years after the government introduced the Motor Vehicle Aggregator Guidelines, 2020, ride-hailing companies like Ola, Uber and Rapido continue to face scrutiny for not operationalising one of the guidelines' core mandates: insurance cover for the drivers on their platforms.

Multiple sources familiar with the matter said that despite the guidelines—notified by the Ministry of Road Transport and Highways (MoRTH) on November 26, 2020—mandating that aggregators provide a minimum of Rs 5 lakh in health insurance and Rs 10 lakh in term life insurance to every driver registered on their platform, this benefit remains largely out of reach in practice.

As reported by the Times of India on July 6, many drivers are still unaware that such a coverage option exists, and those who are aware often do not have access to formal policy documents or clear instructions on how to initiate a claim.

Moreover, the Supreme Court in 2023 termed the existing Rs 5 lakh insurance minimum “grossly inadequate” and urged a re-evaluation.

However, one of the people said, "There has not been a discussion on raising the cap or strengthening the enforcement mandate."

According to the Motor Vehicle Aggregator Guidelines, the objective is to provide a national framework for licensing, operational standards and driver welfare. Among the key provisions are requirements for aggregators to obtain a licence from state governments to offer a degree of social security to platform-based drivers.

An industry executive, who chose to stay anonymous, said that the insurance coverage, meant to offer a safety net for “gig workers”, is however being handled as a pull product, and not the push-based offering it was intended to be.

In marketing parlance, a push product is where it is consciously publicised and is offered upfront. In the case of a pull product, the user is incentivised to ask for the product.

Gig workers, unlike traditional salaried employees, do not have formal employment contracts or access to workplace benefits. In the case of drivers working with platforms like Ola, Uber and Rapido, they are connected to customers through digital apps and earn on a per-ride or per-task basis.

The insurance provisions under the aggregator guidelines were meant to bridge that gap, offering at least a minimum layer of protection to these workers in case of injury or death.

Emails sent to Ola, Uber and Rapido remained unanswered at the time of publication.

“Technically, the aggregators are complying, as most of them have tie-ups with insurers and maintain group accident policies,” said a senior official at a private general insurance firm that works with ride-hailing companies. “But from the driver’s perspective, it’s a black box. There’s no individual policy document, no visible communication and no easy way to file a claim.”

The TOI report said that there is no public registry of insured drivers, no audit reports on insurance compliance and no grievance redressal platform that drivers can approach independently.

How does the claim process work?

According to transport policy experts, the regulatory framework under the Motor Vehicle Aggregator Guidelines, 2020, is designed for driver insurance to function as a push product, with platforms responsible for automatic coverage and proactive assistance. In practice, though, the process operates more like a pull product.

In the event of an accident, illness or death, it is typically the driver (or their nominee) who must initiate contact with the insurer. This is often done either through the aggregator’s customer support channel or by reaching out directly to the insurer, if the driver even knows who the insurer is, experts said.

To begin the claims process, the claimant is required to submit multiple documents, including an FIR or police report (especially in the case of accidents), hospital admission and discharge records, medical bills and, in the case of a death, a post-mortem or death certificate.

Additionally, they must prove that the incident occurred during an “active ride period”, a window of time when the driver was either on a trip or within a narrow grace period around it. This proof usually involves retrieving backend trip logs or data from the aggregator’s system, which is not readily accessible to the driver or their family.

If the insurer determines that the incident occurred outside of the designated trip window, or if there is insufficient digital evidence to link the incident to an official ride, the claim may be disputed or rejected.

While platforms may facilitate enrolment in group policies, they are not involved in funding or settling claims. Instead, the cost is covered by the insurance companies they partner with. Once a driver or nominee initiates the claim, the insurer verifies documents like FIRs, medical reports and ride data to confirm eligibility. If approved, the payout is made directly by the insurer.