The incident happened in Kalkaji area of south Delhi and the matter came to light when the girl stopped going to school since last two weeks and narrated her ordeal to her parents.
The driver who is said to be married, reportedly abused the girl when she used to be alone in the cab for 15 minutes from Kalkaji to Greater Kailash distance, as more students used to board the cab from there for school.
As per the TOI report, the accused driver used to forcefully made the girl to sit in his lap and then he used to touched her private parts.
He even threatened her when she cried.
Shocked parents, then approached the Govindpuri police station and an FIR was filed against him.
Police arrested the accused, identified as 35-year-old Vipin Kumar, a resident of Govindpuri, on early Tuesday.
Vipin, who has confessed to the crime, has been sent to 14-day judicial custody.
He has been booked under sections 4 and 6 of Protection of Children from Sexual Offences (POCSO) Act.
The cab Maruti van (DL 1 K 5099), in which he used to ferry students to school, has been impounded and further investigation is on.
Similar incidents of sexual abuse of children within school premises have been reported from the IT City Bangalore in last two months, outraging the nation.