Uber Plots B2B Logistics Expansion in India via Govt-Backed ONDC

By expanding its collaboration with the Indian government-backed nonprofit organisations, Uber is joining India's expanding B2B logistics market.

Without giving a precise timeframe, the ride-hailing giant said on 19 May that it will soon introduce its B2B logistics solution through the Open Network for Digital Commerce (ONDC).

This platform will assist companies on the network in accessing on-demand logistics through Uber's 1.4 million driver network. The service is intended to be extended to e-commerce, supermarkets, pharmacies, and even healthcare logistics, although it will initially allow food deliveries for companies using the open network.

Locking Horns With Shadowfax, Shiprocket etc.

Uber's latest move will allow it to compete with companies like Shiprocket (funded by Temasek and PayPal), Shadowfax (supported by TPG, Qualcomm Ventures, and Eight Roads), Porter (a recent Indian unicorn), and LoadShare (backed by Tiger Global) as a logistics service provider on ONDC.

According to media reports, it would be a white-label service that functions similarly to Uber Direct, which was introduced in the US in 2020. However, it will only be available to companies who are part of the ONDC network, TechCrunch was informed.

Following its launch of Courier XL in Delhi NCR and Mumbai earlier this month, which enables users to deliver large items weighing up to 1,653 pounds from the company's rider app by selecting three- and four-wheeler goods carriers, Uber is now expanding into business-to-business logistics in India. For a while now, the business has also provided its standard courier package delivery service on two-wheelers.

Uber Exploring India’s Rapidly Expanding Logistical Sector

Uber's focus on logistics in general makes sense because, according to Motilal Oswal, the Indian logistics market is predicted to expand 49% from 9 trillion Indian rupees ($105 billion) in the fiscal year 2023 to 13.4 trillion Indian rupees ($157 billion) in the fiscal year 2028.

Following a 41.1% year-over-year growth in operational revenue to $439 million in India last year, the move will help Uber make another business case in that country. According to previous year's figures, ride receipts increased by 21.45% year over year to $94.27 million in total operating revenue.

However, local competitors are becoming more and more formidable in the Indian ride-hailing business, including up-and-coming firms like Namma Yatri (financed by Google, Blume Ventures, and Antler) and Rapido (supported by WestBridge Capital and Nexus Ventures).

It is anticipated that the San Francisco-based corporation will be able to keep India as a significant market by diversifying into other areas like logistics.