The Lagos State Government’s ambitious Automated Union-Aided Transport Operations Network (AUATON) and LagRide initiatives are redefining urban mobility. By integrating technology-driven ride-hailing systems, smart payment solutions, and structured fleet management, the projects aim to improve safety, efficiency, and regulation in public transport.
However, beyond infrastructure and technology, industry watchers say one crucial partner is missing from the conversation – the insurance industry. Experts believe that embedding comprehensive insurance frameworks into AUATON and LagRide operations will protect investments, guarantee passenger safety, and build long-term trust in the system.
Three years later, that promise is sputtering.
Members of the Amalgamated Union of App-Based Transporters of Nigeria (AUATON), Lagos Chapter, say LagRide has failed to meet its commitments, leaving drivers exposed to financial and legal risks despite regular deductions for insurance and maintenance.
“Captains are still paying out of pocket for insurance and repairs, even though these costs are deducted by Ibile Holdings,” AUATON Public Relations Officer, Steven Iwindoye, told reporters on Tuesday. “We were told this would be a secure system, but the reality on the ground tells a different story.”
Insurance Promises vs. Reality
Iwindoye said every LagRide driver underwent a four-day mandatory training before onboarding, where management assured them of full insurance coverage, vehicle maintenance, and digital tools to track asset repayments.
Yet many drivers claim they have received no verifiable proof of active coverage, no clarity on claims procedures, and no support for repairs — even after accidents.
Olumide Akinyemi, a Lagos-based motor insurance consultant, says the situation highlights a critical industry problem.
“If premiums are deducted but drivers don’t get policy documents, that’s a breach of trust and possibly of insurance regulations,” Akinyemi said. “Without proof of cover and clear claims procedures, drivers are essentially uninsured.”
According to Akinyemi, a proper ride-hailing insurance plan should cover own damage, third-party liabilities, personal accident benefits, passenger injury protection, and downtime income for drivers whose vehicles are under repair.
Stranded in the Suburbs
Drivers say the operational flaws extend beyond insurance. Captains in Ikorodu, Badagry, Igando, Abule Egba, Alagbado, and Epe report going hours without ride requests unless they relocate to high-demand areas like Ikeja and Victoria Island.
“This inefficiency has discouraged commuters in those suburbs from using LagRide, and many have gone back to informal transport options,” Iwindoye noted.
Insurance – The Missing Link
While the partnership addresses vehicle financing, regulation, and driver empowerment, insurance experts say it must also ensure that both drivers and passengers are adequately covered.
“Every commercial transport operation involves inherent risks – accidents, theft, liability claims, and unforeseen damages,” said Chief Babajide Olatunde-Agbeja, Chairman of Boff & Co. Insurance Brokers Ltd. “If AUATON and LagRide are to build trust with Lagosians, insurance must be treated as a non-negotiable pillar of the system, not an afterthought.”
Olatunde-Agbeja noted that the scheme offers an opportunity to create customized insurance packages for ride-hailing, including third-party liability, comprehensive vehicle coverage, passenger accident insurance, and income protection for drivers during downtime due to accidents or illness.
A Model for Shared Responsibility
Insurance analysts recommend that AUATON and LagRide adopt a shared premium model, where both the platform and drivers contribute to a collective insurance pool. This approach would spread costs, reduce the financial burden on drivers, and ensure continuous coverage without lapses due to missed payments.
“Given the gig economy’s nature, drivers often juggle multiple platforms, and that can lead to insurance gaps,” said, Executive Director at NSIA Insurance Co. Ltd. “By integrating insurance payment directly into the repayment or revenue deduction system, we can ensure every driver and vehicle is covered from day one.”
Beyond Compliance – Building Public Confidence
Transport analysts believe an insurance-backed AUATON–LagRide system could serve as a model for other Nigerian cities. With Lagos facing frequent road accidents and public transport safety concerns, visible insurance protection could help restore commuter confidence.
“Passengers should know that when they use LagRide or AUATON services, they are protected,” added. “That assurance can be a powerful selling point in a competitive market.”
The Road Ahead
The AUATON–LagRide partnership is in its early stages, but expectations are high. Experts agree that for it to succeed, operational efficiency must go hand in hand with robust risk management.
“If insurance is woven into the DNA of this partnership, it will not just move people; it will move the industry forward,” Olatunde-Agbeja concluded.
The AUATON platform digitally links transport unions with regulatory authorities, while LagRide operates a structured leasing model for ride-hailing vehicles. In both cases, insurance could play multiple roles – from compulsory third-party coverage to advanced policies covering theft, vandalism, and accident liabilities.
Celestine ukpong, economist and Insurance investor, agrees that the sector must position itself strategically.
“The insurance industry should not wait for the government to dictate terms. Insurers should proactively design products tailored for AUATON and LagRide operators, covering both operational and passenger risks,” he said.
Analysts note that without integrated insurance participation, Lagos risks exposing the system to high financial and reputational losses in the event of major accidents or claims disputes. This could erode public trust and slow adoption.
With thousands of drivers expected to join AUATON and LagRide, industry insiders say the scale offers a golden opportunity for insurers to innovate, digitise claims processes, and embed premium payments into ride fares for convenience.
SIDEBAR: How the Insurance Sector Can Plug into AUATON and LagRide
- Fleet Insurance Bundles: Offer group policies for transport unions and LagRide fleets, reducing individual costs while expanding coverage.
- Digital Policy Integration: Embed insurance details into AUATON’s digital driver profiles for real-time verification.
- Passenger Coverage: Introduce micro-insurance that automatically covers every passenger per trip, charged within the fare.
- Rapid Claims Processing: Develop tech-enabled claims systems linked to AUATON’s vehicle tracking for instant accident reporting.
- Public Awareness Campaigns: Partner with Lagos State to educate drivers and riders on their insurance rights and benefits.
This framing makes the insurance industry an active stakeholder rather than a spectator in Lagos’ transport revolution.
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