Uber is making strides into India’s expanding B2B logistics sector by deepening its collaboration with the nonprofit Open Network for Digital Commerce (ONDC), aimed at diversifying digital commerce and reducing the dominance of giants like Amazon and Flipkart.
On Monday, Uber announced its imminent launch of a B2B logistics service on the ONDC platform. This service will allow businesses within the network to utilize Uber’s vast network of 1.4 million drivers for on-demand logistics, although a specific launch date has yet to be revealed. Initially, the service will focus on food deliveries but is expected to broaden its scope to include e-commerce, grocery, pharmacy, and healthcare logistics in the future.
As it joins the ONDC, Uber will compete against other logistics providers like Shiprocket, Shadowfax, and recently established unicorn Porter, all of which have considerable backing from major investors. Uber’s service will mirror its Uber Direct offering in the U.S., operating as a white-label solution exclusive to ONDC participants.
This strategic move follows Uber’s recent launch of its Courier XL service in major cities like Delhi and Mumbai, which caters to users looking to transport larger items. They have also provided parcel delivery using two-wheelers for some time, signalling a broader push into logistics.
The decision to forge into India’s logistics landscape aligns with market trends, as the sector is projected to grow significantly, with estimates suggesting a rise from ₹9 trillion ($105 billion) in FY2023 to ₹13.4 trillion ($157 billion) by FY2028. This growth potential presents Uber with a valuable opportunity to solidify its presence in India, where it recorded a 41.1% year-on-year increase in operating revenue in the past year.
However, Uber faces increasing competition in the local ride-hailing market from emerging firms like Rapido and Namma Yatri. Thus, venturing into logistics offers a pathway to maintain its relevance in a competitive environment.
In addition to logistics, Uber has introduced metro ticketing through its app, a service powered by ONDC, following a memorandum signed with the nonprofit during CEO Dara Khosrowshahi’s 2024 visit to India. Delhi Metro tickets are currently available via the app, with plans to extend this feature to additional cities later in the year.
ONDC was launched in 2021 as part of India’s effort to enhance digital commerce and enable small retailers to access a broader customer base. Despite its potential, ONDC has faced challenges, including leadership changes and a decline in retail orders.
Vibhor Jain, acting CEO and COO at ONDC, expressed optimism about Uber’s involvement, noting it could facilitate seamless multimodal travel and streamline the fragmented logistics environment. As such, this collaboration marks a significant step towards innovative solutions and enhanced value within the mobility and service ecosystems in India.
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