Choosing an Employee Transport Vendor: A Checklist for HR and Admin

Staff transport usually goes wrong in small ways first. A cab reports late twice in one week. A driver changes and nobody tells you. The monthly bill carries kilometres that no one on your team can explain. Almost all of it traces back to questions that were never asked before the contract was signed. This is the list we would want answered if we sat on your side of the table.

Last reviewed 28 October 2026

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Glass office towers in DLF Phase 3, Gurugram, seen from a metro walkway above a busy road — Photo: Sahil Dhiman, CC BY-SA 4.0

Start with the papers on every car

Carrying your employees for a fee is use for hire or reward. Under the Motor Vehicles Act, 1988, that makes each cab a transport vehicle, which needs a commercial registration (a yellow plate, or green for an electric car) and a permit under Section 66. Section 192A sets the punishment for running without a permit, and the car can be detained on the road with your staff inside it.

For every cab that will run your routes, ask for copies of:

Commercial RC showing it as a transport vehicle.
Permit: a state taxi or contract carriage permit for local routes, or an All India Tourist Permit where cabs cross state lines.
Fitness certificate. Transport vehicles renew it every 2 years until they are 8 years old, then every year.
Commercial insurance with passenger liability, which Section 147 of the Act requires for transport vehicles.
PUC, valid on the day.
AIS-140 GPS fitment certificate, with the device registered on VAHAN.

One sample set of papers proves very little. Ask for the list of registration numbers that will actually run your routes, and look a few of them up on Parivahan yourself. Our guide on white plate vs yellow plate shows how to check a cab in about a minute.

Private car insurance stops at hire use

Private car policies carry a "limitations as to use" clause. It covers social, domestic and personal business use, not use for hire or reward. If a private car on your staff route has an accident, the owner's claim can be rejected and your employee may be left dealing with an owner whose policy does not respond.

Drivers: licence, verification and conduct

The driver spends more time with your employees than anyone else in the vendor's company. Four things to settle.

Licence

The Supreme Court held in 2017, and a Constitution Bench confirmed in 2024, that an LMV licence is enough to drive a transport vehicle under 7,500 kg. Some states, permits and clients still ask for a badge. You can verify any licence on Parivahan Sarathi.

Police verification

This is done through the state police portal, which you can reach from the Digital Police Portal. In employee transport the common practice is a certificate not older than 12 months, renewed every year. Karnataka's and Telangana's night shift rules go further and ask the employer to screen drivers, outsourced ones included.

Driver changes

Drivers do change. The contract should say the new driver's licence and verification reach you before he drives your route, not a week later.

Conduct

Under the POSH Act, 2013, transport the employer provides counts as part of the workplace. A complaint about a driver goes to your Internal Committee. So ask to see the vendor's driver code: dress, alcohol, phone use, trip app use, and how a complaint is handled and how fast the driver comes off your routes.

GPS, the panic button and night shifts

CMVR Rule 125H requires public service vehicles to carry an AIS-140 vehicle location tracking device and an emergency button, registered on VAHAN. In May 2026 the Supreme Court reportedly told states to enforce this strictly before issuing fitness or permits. The device being fitted is the easy part. What matters to you is who is watching it.

Who receives the alert when the button is pressed, and who calls the employee back?
Is there a control room or travel desk staffed through the night, or a phone that rings at someone's home?
Can your admin team see live cab locations, and get the GPS trail of any trip after the fact?
How is a drop confirmed at night: call, app, or OTP?

If women on your team work late, the rules get specific. Rule 83 of the Central Rules under the OSH Code, notified in May 2026, asks the employer to provide pickup and drop at the residence with emergency numbers displayed in the vehicle. States add their own conditions, from guards to CCTV to routing so no woman is the first pickup or last drop. We have set these out state by state in night shift transport rules for women employees.

The legal duty stays with your company

State night shift conditions are written for the employer. A vendor can run the cabs, the guards and the control room, but the permission, the consent forms and the records are yours. Ask what evidence the vendor will hand over each month so you can show compliance.

Billing models in plain words

Most staff transport is billed in one of four ways.

Fixed monthly package. A set amount per cab for an agreed number of kilometres and hours in the month, with rates for extra km and extra hours. Tolls, parking, night duty and outstation trips usually sit on top.
Per trip. Each pickup or drop leg is charged as one trip, often with slabs by distance.
Per km. You pay for kilometres run, usually with a daily minimum or a slab such as 8 hours and 80 km.
Base plus trips. A smaller fixed amount per cab, plus a charge for each trip. This one suits hybrid working, where attendance moves around.

The model matters less than the definitions inside it. When does a trip start: at the garage, or at the first pickup? Is "dead mileage" from the garage billed? How is waiting time counted? What happens to a fixed package on a day when half the office works from home?

Trip logs and GPS reconciliation

Billing should run on data, not on a driver's word. Ask for a trip-wise statement every month with the date, cab number, driver, employees on board, start and end times and GPS kilometres. Match it against your roster and the GPS trail. This is where extra km, ghost trips and double-counted waiting time show up. If the vendor cannot produce that statement, the bill cannot really be checked.

SLA terms, backup cars and penalties

Every vendor promises cabs on time. The contract has to say what happens when they are not. Get these written down:

What counts as late reporting, in minutes, and what counts as a no-show.
How fast a backup car arrives after a breakdown, and whether it carries the same papers and GPS.
What happens when the regular driver is absent.
Escalation contacts by name, reachable at night.
Penalties that rise for repeat failures, and the point at which you can end the contract.

Government contracts show how specific this can get. Under GeM's standard cab hiring terms, if a car is not deployed and no replacement arrives within 2 hours, the buyer recovers the cost of hiring another car plus a percentage of the monthly hire, higher for repeats. Reporting 30 minutes or more late brings a warning, then percentage cuts. A drunk driver means a fine and a replacement. If penalties add up to 10% of the contract value, the office can end the contract. Your terms need not match these, but they should be just as clear.

Invoice, tax and contract terms

Ask for one GST invoice a month with the trip-wise annexure attached, rather than a pile of duty slips. The invoice should carry the vendor's GSTIN and PAN. Your finance team will deduct TDS where it applies. How GST and TDS apply depends on how the service is structured, so have your chartered accountant confirm both before the first bill arrives.

Company transport contracts commonly run 6 to 12 months. Read these clauses closely:

Notice period for both sides, and how routes are handed over if you switch vendors.
Rate revision: when it can happen, and whether fuel price changes are linked to a formula.
Who pays tolls and parking, and whether they are billed at actuals with receipts.
How the vendor stores your employees' home addresses and phone numbers, and who can see them.
Any security deposit, and when it comes back.

The checklist

Take this into your vendor meetings.
Area	Ask the vendor for	Walk away if
Registration and permit	Commercial RC and permit for each cab on your routes	Any cab is on a white plate
Fitness, PUC, insurance	Copies plus a monthly expiry tracker	Insurance is a private car policy
GPS and panic button	AIS-140 certificate, live tracking access, alert process	Nobody can say who answers the alert
Drivers	Licence, police verification under 12 months old, conduct code	Verification is "in process" for weeks
Night shifts	How they meet your state's conditions, with records	They say the rules do not apply to them
Billing	Written definitions of trip, km, waiting and dead mileage	Rates are quoted with no definitions
Trip logs	Trip-wise statement with GPS km every month	Only handwritten duty slips
SLA	Late, no-show and backup terms with penalties	Penalties are "by mutual discussion"
Invoice	One GST invoice with trip annexure	No GSTIN, no company address
Contract	Term, notice, rate revision, data handling	A long lock-in with no exit clause

Where Corporate Car Rent stands on this list

Our cabs are commercially registered, with permits, commercial insurance, fitness, PUC and AIS-140 GPS with an emergency button. Drivers hold commercial licences and are police-verified. You get one GST invoice a month with trip-wise details, and a backup car if a cab breaks down. Ask us for the papers. We expect you to check them.

Frequently asked questions

Can our transport vendor use private white plate cars if they are new and well kept?

No. Carrying your employees for a fee is use for hire or reward under the Motor Vehicles Act, 1988. The car needs a transport (commercial) registration and a permit. A private car policy also excludes hire use, so the insurance may not respond if something goes wrong on a staff trip.

If night shift transport rules are broken, is the vendor responsible or the company?

State night shift conditions are placed on the employer, and the exemption or permission is usually in the employer's name. Your contract can pass the day-to-day work to the vendor, but it does not move the legal duty off your company. Ask your legal or compliance team how your contract should allocate it.

Which is cheaper, a fixed monthly package or paying per trip?

There is no single answer. A fixed package suits a steady roster where most seats are used every day. Per trip or base plus trips suits hybrid attendance, where the number of trips moves week to week. Run the last few months of your roster through each model before you decide.

How often should we re-check the vendor's documents?

Insurance, PUC, fitness and permits all have expiry dates, so ask for a compliance sheet every month listing each cab and the expiry date of each paper. Driver police verification is commonly renewed once a year in employee transport, and a new driver's papers should reach you before he drives your route.

What should the monthly bill from a staff transport vendor show?

One GST invoice with a trip-wise annexure: date, cab number, driver, employees carried, start and end times and kilometres, plus extras like tolls and parking with receipts. That lets your team match the bill against the roster and GPS data line by line.

Setting up staff pickup and drop?

Send us your office location, shift timings and headcount by area. We reply with cab options, a billing model that fits your roster, and a quote.

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Sources

Rules and figures on this page come from these official notifications, laws and reports. Check the current position for your own case.