Uber is entering India’s growing B2B logistics market by breaking the control of e-commerce duo Amazon and Walmart-backed Flipkart, and expanding its partnership with government-backed nonprofit organizations aimed at expanding digital commerce in South Asian countries.
On Monday, the riding giant announced that it will soon launch its B2B logistics service through Digital Commerce (ONDC) Open Network (ONDC) to access business on the network through Uber’s 1.4 million driver network without disclosing a specific timeline. The service initially allows food delivery for businesses operating on open networks, but aims to expand to e-commerce, groceries, pharmacies and even healthcare logistics.
With the new move, Uber will become available as a logistics service provider for ONDC, competing with ShipRocket (Temasek and PayPal Backed), Shadowfax (TPG, Qualcomm Ventures, Eight Roads-Backed), and the recent Indian unicorn porter Tiger Global-Backed Loadshare.
It is a white label service, operating similar to Uber Direct, which launched in the US in 2020, but is limited to companies available on the ONDC network that someone familiar with the Plan told TechCrunch.
Uber’s foray into B2B logistics in India will follow the company’s expansion in the consumer logistics space by introducing Delhi NCR and Courier XL to Mumbai earlier this month, helping users deliver large quantities of items up to 1,653 pounds from the company’s rider app by selecting three-wheel and four-wheel product carriers. The company has also offered regular courier package delivery services on motorcycles for a while.
It makes sense for Uber to focus on logistics in general, as the Indian logistics market is expected to grow from 49% to INR 13.4 trillion (USD 157 billion) per Motilal Oswar, starting from 9 trillion Indian rupee (USD 105 billion) in 2023 in 2028. This move will help Uber win another business case in India. This is a 41.1% increase from the previous year, an increase in domestic operating revenue to $439 million. Last year’s results also show a collection from Ride, which has grown to $94.27 million year-on-year, at 21.45% of total operating revenue.
Nevertheless, Uber is facing growing competition in the Indian ride market from local players, including startups like Rapido (Westbridge Capital and Nexus Ventures-Backed) and Namma Yatri (Google, Blume Ventures, Antler-Invested). Diversification into new domains such as logistics is expected to help San Francisco-based companies maintain India as a key market.
In line with the B2B Logistics Play, Uber deployed Metro tickets on the rider app with ONDC based on a memorandum signed with the Indian government during the visit of Dara Khosrowshahi, a visit to India in February 2024.
Launched in 2021, ONDC debuted as an Indian initiative, boosting digital commerce, allowing small retailers to come online and reach more customers easily. The network expanded to the mobility sector in 2023.
ONDC was originally designed to replicate the success of the Indian government’s unified payment interface, aiming to adopt digital commerce. However, the open network model has yet to beat players in major industry, and is struggling to gain traction. Recent leadership churn added to the challenge last month, even former managing director and CEO T. Koshy resigned. Retail orders on the network fell nearly 34% in April from a peak of 6.5 million in October.
“Uber’s initial activation of metro tickets and logistics unifies new possibilities, from a seamless multimodal journey to unifying the fragmented logistics ecosystem,” said Vibhor Jain, CEO and COO of ONDC. “This collaboration will be the foundation for future innovations from Uber on the network, enhancing the landscape of users, partners and broader mobility and services.”