Uber eyes B2B logistics push in India through state-backed open commerce network

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Uber is entering India’s growing B2B logistics market by extending its partnership with the Indian government-backed nonprofit that aims to break the domination of the e-commerce duo Amazon and Walmart-backed Flipkart and widen digital commerce in the South Asian nation.

On Monday, the ride-hailing giant announced it will soon launch its B2B logistics service through the Open Network for Digital Commerce (ONDC) to help businesses on the network access on-demand logistics through Uber’s 1.4 million driver network, without disclosing a specific timeline. The service will initially enable food deliveries for businesses operating on the open network, but is aimed to be expanded to e-commerce, grocery, pharmacy, and even healthcare logistics.

With its new move, Uber will be available as a logistics service provider on ONDC, competing with the likes of Shiprocket (Temasek and PayPal-backed), Shadowfax (TPG, Qualcomm Ventures, and Eight Roads-backed), recent Indian unicorn Porter, and Tiger Global-backed Loadshare.

It will be a white-label service and will operate similarly to Uber Direct, launched in the U.S. in 2020, but will be limited to businesses available on the ONDC network, a person familiar with the plan told TechCrunch.

Uber’s foray into B2B logistics in India follows the company’s expansion in the consumer logistics space by introducing Courier XL in Delhi NCR and Mumbai earlier this month to help users deliver large goods of up to 1,653 pounds from the company’s rider app by choosing three- and four-wheeler goods carriers. The company has also been offering its regular Courier package delivery service on two-wheelers for some time.

Eyeing logistics in general makes sense for Uber as the Indian logistics market is expected to grow 49% to 13.4 trillion Indian rupees ($157 billion) in the financial year 2028 from 9 trillion Indian rupees ($105 billion) in the financial year 2023, per Motilal Oswal. The move will help Uber get another business case in India, after seeing a 41.1% year-over-year increase in its operating revenue in the country to $439 million last year. Its last year’s results also showed collections from rides growing 21.45% YoY of the total operating revenue to $94.27 million.

Nonetheless, Uber is facing growing competition in the Indian ride-hailing market from local players, including emerging ones like Rapido (WestBridge Capital and Nexus Ventures-backed) and Namma Yatri (Google, Blume Ventures, and Antler-invested). Its diversification into new domains, such as logistics, is expected to help the San Francisco-based company maintain India as an important market.

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Alongside its B2B logistics play, Uber has rolled out metro ticketing on its rider app powered by ONDC, based on the memorandum of understanding that the company signed with the Indian government-backed nonprofit during CEO Dara Khosrowshahi’s visit to India in February 2024. Delhi Metro tickets are available first through the Uber app, while metro tickets in three more Indian cities will go live later this year.

Launched in 2021, ONDC debuted as India’s initiative to boost digital commerce and allow small retailers to go online and reach more customers easily. The network also expanded to the mobility sector in 2023.

ONDC was initially designed to replicate the success of the Indian government’s Unified Payments Interface, aiming to drive digital commerce adoption. However, it has struggled to gain traction, as its open-network model has yet to win over major industry players. Recent leadership churn has added to its challenges, with even its former managing director and CEO, T. Koshy, stepping down last month. Retail orders on the network also declined by nearly 34% to 4.3 million in April from a peak of 6.5 million in October.

“Uber’s initial enablement of metro ticketing and logistics unlocks new possibilities — from seamless multimodal journeys to unifying a fragmented logistics ecosystem,” said Vibhor Jain, acting CEO and COO at ONDC, in a prepared statement. “This collaboration lays the foundation for future innovations from Uber on the network, enhancing value for users, partners, and the broader mobility and services landscape.”