Introduction to Uber’s B2B Logistics Venture

Uber has announced its entry into India’s burgeoning B2B logistics market through an extended partnership with the government-backed Open Network for Digital Commerce (ONDC), aiming to expand digital commerce and challenge the dominance of e-commerce giants Amazon and Walmart-backed Flipkart in the South Asian nation.

Launch of B2B Logistics Service

The ride-hailing giant will soon introduce its B2B logistics service on the ONDC network, leveraging its vast driver network of 1.4 million to provide on-demand logistics solutions. Initially, the service will focus on food deliveries for businesses on the network but plans to expand into e-commerce, grocery, pharmacy, and healthcare logistics in the future.

Competition in the Logistics Market

By entering the B2B logistics space, Uber will compete with established players such as Shiprocket, Shadowfax, Porter, and Loadshare. The service will operate as a white-label solution, similar to Uber Direct, which was launched in the U.S. in 2020, but with a focus on businesses within the ONDC network.

Expansion of Logistics Services

This move follows Uber’s recent introduction of Courier XL in Delhi NCR and Mumbai, allowing users to deliver large goods using three- and four-wheeler goods carriers. The company has also been offering its regular Courier package delivery service on two-wheelers.

Growth Prospects of the Indian Logistics Market

The Indian logistics market is expected to grow 49% to 13.4 trillion Indian rupees ($157 billion) by the financial year 2028, making it an attractive sector for Uber. This expansion will provide Uber with another significant business opportunity in India, where it has already seen a 41.1% year-over-year increase in operating revenue.

Challenges and Competition

Despite its growth, Uber faces increasing competition in the Indian ride-hailing market from local players like Rapido and Namma Yatri. Diversifying into logistics is expected to help Uber maintain its market presence in India.

Metro Ticketing on the Uber App

In addition to its B2B logistics play, Uber has introduced metro ticketing on its rider app, powered by ONDC. Delhi Metro tickets are currently available, with plans to expand to three more Indian cities later this year.

Background on ONDC

ONDC was launched in 2021 as an initiative to boost digital commerce and enable small retailers to reach more customers. The network expanded into the mobility sector in 2023 but has faced challenges in gaining traction among major industry players.

Recent Developments and Challenges

ONDC has experienced recent leadership changes, including the departure of its former managing director and CEO, T. Koshy. The network has also seen a decline in retail orders, highlighting the need for innovative collaborations to drive growth.

Statement from ONDC

“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. “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.”