Protecting India’s gig workers on the road: A step toward inclusive commercial vehicle insurance solutions

It’s still dark outside when Nadeem’s phone buzzes with his first ride request. Over a quick cup of tea with his wife – the only quiet moment they share before the day begins – he prepares for another long day behind the wheel. For the past six years, Nadeem has driven over 15 hours a day across Hyderabad for Ola, Uber, and Rapido. Amid traffic, dust, and heat, his days blur, with only a quick lunch or tea break before the next booking arrives.

“Har din apna nahi rehta, aur har din road apna nahi rehta – kuch bhi ho sakta. Isliye mujhe insurance lena hai. Insurance ki bahut zaroorat hoti hai insaan ko,” he reflects.
(“Every day doesn’t go your way, and every day the road isn’t yours – anything can happen…. That’s why I need insurance. A person truly needs it.”).

It’s a lesson he’s learned the hard way. Just a few weeks ago, another car sideswiped him and damaged his bumper. When the other driver refused to pay, Nadeem was forced to cover the 4,500 rupee (USD 53) repair bill out of pocket – a painful blow when every rupee matters. Though he has long planned to buy insurance, confusion about what to purchase, unclear product offerings, and the never-ending weight of urgent expenses have pushed this decision further down his list.

For drivers like Nadeem, insurance isn’t a luxury – it’s a necessity, a shield they need but often cannot easily rely on. India’s gig economy is projected to expand to 23.5 million workers by 2030, a significant increase from 7.7 million in 2020–21. A large share of this workforce, reliant on two-wheelers and cabs for their livelihood, remains critically underinsured, with more than half lacking any form of coverage. While the state mandates compel drivers to buy third-party motor insurance, many let coverage lapse, choosing to dodge authorities or pay a small fine rather than shoulder the burden of a steep annual premium.

To better understand the insurance landscape for gig workers, BFA Global, in collaboration with Entitled Solutions under the CHARGE II project, conducted qualitative research with drivers and industry stakeholders. The study examined demand and supply-side barriers, uncovering product gaps and identifying tailored features to inform an inclusive, viable insurance blueprint that meets gig workers’ needs while ensuring insurer sustainability.

Barriers faced by gig workers in accessing commercial vehicle insurance

Through BFA Global’s research, several key challenges emerged that prevent gig workers from securing adequate insurance coverage:

1. Low awareness and understanding: Many gig workers have limited awareness of available insurance products. Even when options exist, the technical jargon and complex terms make it difficult for them to understand coverage details, benefits, and exclusions. As a result, insurance remains a low-priority or confusing decision.
2. Affordability and rigid payment structures: Most insurance products cater to salaried individuals or fleet owners, offering rigid annual policies that don’t align with gig workers’ unpredictable incomes. For many, large lump-sum premiums are unmanageable, as daily survival takes precedence, and even minor expenses can disrupt insurance commitments.
3. Low perceived value: For many, insurance is seen as a “safety net” – important but not urgent, reserved for major accidents rather than everyday protection. Without clear, ongoing communication about its value, it often feels like an unnecessary expense rather than an essential security.
4. Mistrust and negative experiences: Dealing with insurance is often seen as a hassle. Customers frequently avoid engaging due to fears of claim rejections and unclear terms. With claim assessments sometimes taking 10 days to a month, many opt to pay out-of-pocket for minor repairs at local garages rather than endure the slow, inefficient process. As one Mumbai cab driver explains:

“The response time to kick-start the claims process is very slow. The insurance recovery agents take 10 days to a month to come to the accident site and verify the damages. The drivers cannot afford to let go of their income for this many days, as they are daily wage earners. Hence, most prefer to get the car checked in their local workshop/garage and pay out of pocket to repair the car.” – Alim, Cab driver, Mumbai

Challenges faced by insurance providers

While gig workers face significant hurdles in accessing and benefiting from insurance, the challenges are not one-sided. Insurers themselves operate under substantial constraints that limit their ability to design and deliver products tailored to gig workers’ unique realities. 

1. High-risk customer profiles: Gig workers face greater accident exposure due to long hours, erratic schedules, and poor vehicle maintenance. This leads to a high claim-to-premium ratio, making them commercially unattractive for insurers.
2. High administrative costs: Manual onboarding, claims processing, and tailored support paired with low premiums drive up servicing costs. Delays in claim verification and loss recognition (especially for third-party claims, which may be filed years later) further impact insurer profitability​.
3. Low policy retention: Many gig workers buy insurance primarily to satisfy regulatory requirements and may default on policies or allow lapses once initial compliance is achieved. This low long-term retention makes it harder for insurers to recover acquisition and operational costs​. 
4. Scale and viability issues: Customised, low-cost insurance is only viable at scale, but gig workers are highly fragmented. While aggregators offer some reach, price-driven bidding limits insurers’ ability to provide tailored products.
5. Regulatory constraints: Third-Party Liability (TPL) must be sold as annual policies per the Motor Vehicles Act, limiting flexibility. Though Own Damage (OD) coverage can be offered short-term, splitting OD and TPL is impractical for users, hindering innovation and usability.

Bridging the gap: Design principles for inclusive insurance

Insurance for gig workers must be flexible, simple, and trustworthy. With volatile incomes and little financial cushion, they need products that fit their lives, not complicate them. Key lessons from our research for building viable insurance solutions include:

• Enable flexible, affordable payments by offering EMIs, quarterly premiums, or short-term options to match income volatility.
• Protect livelihoods, not just vehicles, by offering coverage for wage loss during vehicle downtime, positioning insurance as income security and not just asset protection.
• Streamline claims processing to minimise income disruption during vehicle downtime. Quick, hassle-free claims build confidence in the insurance system and encourage renewals.
• Simplify communication by providing clear, jargon-free explanations of coverage, claims processes, and benefits. 
• Offer high-touch customer support, including vernacular language helplines, real-world assistance channels, and guided onboarding, especially for customers with low digital and financial literacy.
• Embed insurance within existing financial ecosystems, such as vehicle loans or platform earnings, making access and renewals more frictionless and intuitive for users.

A blueprint for action

Considering these key lessons, BFA Global collaborated with Entitled Solutions and industry experts to design a forward-looking commercial motor vehicle insurance blueprint. The blueprint is anchored in four key principles designed to align with the realities of gig work:

• Affordable: Coverage that combines essential Own Damage and Third-Party features at a price point that gig workers can manage.
• Flexible: Premium payment options include quarterly plans aligning with gig workers’ irregular income cycles.
• Relevant: Wage loss cover for periods when vehicles are under repair, ensuring workers aren’t left without earnings.
• Tangible: Real value beyond just claims, including 24/7 support via a dedicated helpline.

India’s gig economy is expanding at a rapid pace, with over 3.3 million platform workers in passenger mobility and hyperlocal delivery services driving the urban mobility and e-commerce boom as of 2021. To protect their livelihoods in this fast-moving sector, gig workers need inclusive, practical insurance solutions that address the unique risks they face.  

We hope that BFA Global’s research and our upcoming blueprint serve as a practical roadmap and an inspiring call to action for insurers, platforms, and policymakers to come together and co-create inclusive solutions that protect livelihoods and fuel the next phase of growth. So that workers like Nadeem can continue their journeys with greater security, resilience, and confidence.

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