Morning Report: Uber catches up to rivals with insurance benefits in a likely bid to retain drivers.
Uber announced today that its drivers in India will get free insurance, which covers “death, disability or hospitalization due to accidents” according to Reuters.
India is not the only country where Uber has issued free insurance. The policy also applies to Southeast Asian countries such as Myanmar and Indonesia. But why did Uber choose to offer free insurance coverage in India? Amidst headlines for its cultural issues, top executive exits, and legal disputes, drivers in India have repeatedly protested the ride-hailing unicorn’s low pay. Offering free insurance benefits may help Uber maintain its foothold in the market.
Furthermore, India, Uber’s largest market outside the U.S. (after losing to Didi Chuxing in China), could be quite lucrative. Whereas Uber’s U.S. operations still lose money (though losses are narrowing), its services in Southeast Asia are generating revenue. Ex-CEO Travis Kalanick also speculated last year that India would follow the same path with its growing population and lack of better transportation alternatives. The benefit could also act as a response to counter its local rival Ola, which started offering free family medical insurance to its drivers in 2015.
Uber just finalized its CEO candidate—Dara Kohsrowshai from Expedia—after a two-month vacancy. However, the ridesharing company still has to find a path to profitability while salvaging its notorious reputation. Tackling India with benefits that match its rivals may be the first step that drives Uber closer to these goals.
From The Crunchbase Daily:
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