The job of private hire driver has become a highly regulated and complex profession, where economic success depends on careful risk management.
Insurance is often perceived as a heavy financial burden (sometimes representing 1 to 1.5 months of turnover). However, it is the only tool that provides predictability to your business. Without adequate coverage, you are flying blind: your business may be profitable today, but a single incident tomorrow — an accident, account deactivation or breakdown — could be enough to sink your organisation.
Here we detail the strict legal obligations, but above all the essential protection strategies needed to survive in this profession.
In a nutshell
-
The legal duo is non-negotiable: The law requires both civil liability insurance for road traffic AND civil liability insurance for operations (for services/customers). Failure to obtain either of these types of insurance is an offence.
-
Be aware of the disability threshold (AIPP): For your own physical protection, avoid policies that only cover you from 10% disability. Most fractures or injuries are below this threshold: aim for coverage from 1%.
-
Electricity is a financial choice: Beyond environmental benefits, electric vehicles offer extended service life on platforms (up to 10 or 12 years) and 100% VAT recovery on energy.
-
New rights 2024: With the introduction of the minimum fare (€9 net/journey) and the contradictory disconnection procedure, legal protection has become a vital weapon in enforcing these new rights.
The legal basis: understanding the dual obligation
To practise, the Thévenoud law and the Insurance Code impose a specific structure. Never confuse vehicle insurance with business insurance.
Civil Liability for Motor Vehicles (RC Circulation)
This is the absolute minimum. Your car insurance policy must explicitly mention the use. «Transportation of Persons for Remuneration». «Commuting» or «work-related travel» insurance is legally non-existent in the event of an accident during a journey.
- His role: Cover damage (bodily injury and property damage) caused to third parties (passengers, pedestrians, other vehicles) when the vehicle is in motion.
- The risk: Failure to have insurance is a criminal offence (€3,750 fine, licence suspension). Worse still, in the event of a serious accident, the Guarantee Fund will compensate the victims but will then seek reimbursement from you, which often amounts to a lifetime debt.
Professional Civil Liability Insurance (RC Pro)
It is your company's insurance, active «when the wheels aren't turning».
- His role: It covers damage related to the performance of the service.
- Concrete examples:
- Physical: You trap a passenger's finger when closing the door, or they fall when getting out of the vehicle.
- Equipment: You break a valuable item while handling luggage.
- Intangible: A destination error or a delay caused by negligence causes your client to miss their flight, resulting in significant financial loss. Civil liability for transport does not apply here; only professional civil liability for operations covers you.
Strategically essential «optional» guarantees
If third-party liability insurance is your «driving licence», the following coverages are your «licence to last». The savings made on these options often come at the cost of bankruptcy when the first major problem arises.
Personal Protection for Drivers: The 10% Trap
This is the blind spot of motor insurance: in the event of an at-fault accident, civil liability insurance covers everyone... except you.
For a self-employed person, a broken leg means a total loss of income. Driver Cover pays for your medical expenses and compensates you for your loss of income.
The critical point: The AIPP threshold. Be sure to check the «Physical and Mental Integrity Threshold». Many «low-cost» policies only trigger compensation from 10% disability. However, 85% of accidents (fractures, serious sprains) cause a disability of less than 10%. You would not receive any compensation. Tip: Insist on a guarantee that takes effect as soon as 1% or 5% of AIPP.
Pension plans (Madelin Law): Your real safety net
Please note the frequent confusion: the above guarantee only covers accidents. behind the wheel. But what happens if you fall ill, have a slipped disc or injure yourself in your private life? Your car is off the road, and you're not earning any money. Worse still, some of your expenses continue to mount up (your fixed costs, subscriptions, etc.).
As a self-employed person (TNS), Social Security benefits are low and regularly paid late.
- Why it's vital: The Provident Fund pays you daily allowances to maintain your standard of living in the event of sick leave or a non-work-related accident.
- The tax advantage: Thanks to the Madelin law, contributions to this insurance are deductible from your taxable income. It's a win-win situation: you lower your taxes while protecting yourself.
- Do not rely solely on apps: The «free» insurance provided by platforms (Uber/Bolt) is useful but limited (one-off cover). It is no substitute for proper insurance that covers you 24 hours a day.
Loss of Use: Courtesy Vehicle or Replacement Vehicle?
In the event of an accident or breakdown, your vehicle is immobilised. Without a car, there is no revenue.
Beware of the standard «replacement vehicle» trap. Insurers often lend out small city cars (such as the Twingo). However, you cannot use this type of vehicle for private hire car services (as it does not comply with platform standards). The right strategy:
- Either subscribe to an option «Chauffeur-driven car» (which guarantees a certified saloon car).
- Either opt for Daily Allowances (e.g. €150/day) which allows you to hire a suitable vehicle yourself from a specialist hire company while repairs are carried out.
Legal Protection: Enforcing your new rights
The year 2024 marked a turning point with the agreements supervised by the ARPE (Authority for Social Relations on Employment Platforms). You now have enhanced rights:
- Minimum income: €9 net per trip and a guaranteed €30 per hour of work.
- Protection against disconnection: Platforms must justify any deactivation and follow a contradictory procedure (right of reply, human review).
A Legal Protection specialised insurance is not only useful for disputes with your mechanic. It covers the costs of experts and solicitors needed to challenge unfair deactivation or non-compliance with minimum rates, based on these new regulations.
Electric Vehicles: A choice based primarily on cost-effectiveness
By 2025, switching to electric vehicles will no longer be just a question of environmental concerns, but also of economic considerations (TCO – Total Cost of Ownership).
Double the lifespan
This is the major competitive advantage. While combustion engine vehicles are often excluded from applications after 6 or 7 years, Electric vehicles are accepted up to 10 or even 12 years old. on most platforms (Uber, Bolt, etc.). This allows you to amortise your work tool over a much longer period: once the loan is paid off (after 4 or 5 years), you can enjoy several years of «cash cow» with reduced expenses.
Taxation and «Replacement Value»
- VAT on energy: VAT on electricity is 100% recoverable, compared to partial and complex recovery on fossil fuels.
- New Value: Electric vehicles are expensive to buy (€35,000 to €60,000). In the event of a total loss in the first few years (theft, wreckage), reimbursement at the «expert value» can be disastrous. The «Replacement Value» option (over 3 or 4 years) is essential for paying off your financing without debt.
Fiscal note: Depending on your status, purchasing an electric vehicle may also entitle you to a VAT refund on the purchase and a total exemption from TVS (Company Vehicle Tax). Consult your accountant to validate this arrangement.
A word about costs (2025 estimates)
The insurance budget for a private hire vehicle generally ranges between €3,200 and €6,500 per year (all inclusive), equivalent to a substantial month's work.
Here are the average ranges observed:
- RC Circulation («Third Party»): €1,800 to €3,500 (varies greatly depending on the bonus and geographical area, with Paris/PACA being more expensive).
- RC Exploitation: €120 to €250 (often included in packages).
- All Risks / Theft / Fire: + €600 to €1,200.
- Pension / Health insurance (Essential for self-employed persons): €600 to €1,500.
Final advice: Do not seek savings at any cost on excesses. An excess of €1,500 can turn a minor collision into a financial disaster for your cash flow.
Glossary
Here are some useful terms to know and understand:
-
AIPP (Physical and Psychological Integrity Violation): Disability rating determined after an accident. If your rating is below the threshold specified in your policy (e.g., 10%), you will not be compensated.
-
ARPE: Authority for Social Relations on Employment Platforms. Public body that regulates social dialogue and guarantees drivers' rights (minimum income, protection from disconnection).
-
RC Exploitation: Insurance covering damage caused to customers or third parties outside of driving (luggage, falls, service errors).
-
TCO (Total Cost of Ownership) : Total cost of ownership of the vehicle, including purchase, insurance, fuel, maintenance and taxation.
-
Chauffeur-driven car relay vehicle: Vehicle loan compliant with private hire vehicle regulations (sticker, dimensions), unlike a standard «courtesy vehicle».
