Every major city in the world needs a lifeline in terms of transporation. In London they call it tube, in NYC they call it subway and in our very own amchi Mumbai they call it Local.

Quoting from Wikipedia

The system carries more than 6.6 million commuters on a daily basis and constitutes more than half of the total daily passenger capacity of the Indian Railways itself. It has one of the highest passenger densities of any urban railway system in the world.

Traveling in Mumbai Local is an experience in itself when it is fully crowded. But this post is about something else, it is about how Indians can find opportunity almost anywhere!

During a visit to Bombay I heard about this new innovative Micro-Insurance scheme for Mumbai Local. Everyday when a person goes to his office and comes back by Mumbai Local he spends atleast Rs 15-20 on his travel. If he gets a monthly pass then it is definitely more than Rs 150 for a month. If you get caught without a ticket or a pass then their is a fine of Rs 250.

Now here is how the micro-insurance model works-

1. You pay Rs 50 per month to the insurer and travel without any ticket or pass.
2. In case you get caught then you pay Rs 250 and keep the receipt of the fine.
3. The insurer will give you Rs 250 for the receipt but you will be barred from the program for a fixed duration.

Now the insurer is basically counting on 2 factors – number of people who take up his scheme, and probability of getting caught without a ticket / pass. If 1,000 people adopt for this scheme in a month then he collects Rs 50,000 from them. If 200 people out of these 1,000 get caught then the insurer makes nothing. Thus if the probability of getting caught is less than 0.2 then the scheme works! With more than 6.6 million commuters each day, this probability can be easily achieved by insuring people across different routes and stations.

BottomLine:

Is this legal? No Way!

Is this working? Yes!

Is it profitable? An even bigger Yes!

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