Zego raises £1.2 million to bring pay-as-you-go insurance to gig economy drivers

Pay-as-you-go insurance provider Zego has raised £1.2 million in seeding funding led by LocalGlobe.

London-based Zego launched last year to provide insurance for riders in the gig economy space that are delivering for companies like Deliveroo and UberEATS on small engine scooters. It will soon be launching its first product for car drivers, underwritten by Aviva.

Food delivery and courier drivers are its target market where annual policies for insurance are inconvenient or a deterrent for gig economy riders and drivers, who can top up their app whenever they need to get covered. Zego charges rates from 65p an hour to £25 a week. The startup is also planning to build telematics functions in its app to measure how the user drives to calculate a more accurate fee.

“You should only have to pay when you earn and that way our insurance helps you to work and take control of your expenses,” said Harry Franks, CEO of Zego said.

Currently the service is available across the UK with plans to expand into Europe. The new funds will also be invested into the company’s technical team.

“Zego is a simple idea but it has the potential to free millions of people around the world to work in a way that suits them,” said Robin Klein, partner at LocalGlobe. “As Zego collects more data about delivery drivers it will also help the insurance industry price premiums more effectively, which ensures that sharing economy jobs really do pay for those who rely on them.”