Uber is making strides into India’s burgeoning B2B logistics sector by extending its partnership with a government-backed nonprofit aimed at challenging the dominance of e-commerce giants Amazon and Walmart-backed Flipkart while promoting digital commerce throughout the country. The ride-hailing company announced plans to launch its B2B logistics service via the Open Network for Digital Commerce (ONDC), enabling businesses on the network to leverage its extensive driver network of 1.4 million, although no specific launch date has been disclosed.
Initially, the service will focus on facilitating food deliveries for businesses participating in the ONDC, with plans to expand into e-commerce, grocery, pharmacy, and healthcare logistics in the future. By becoming a logistics service provider on the ONDC, Uber will enter competition with other logistics firms such as Shiprocket, Shadowfax, Porter, and Loadshare.
This white-label service is expected to operate similarly to Uber Direct, which was launched in the U.S. in 2020, but will be tailored specifically for businesses on the ONDC network. This move follows Uber’s recent introduction of Courier XL, a service launched in Delhi NCR and Mumbai that enables users to ship large items (up to 1,653 pounds) via three- and four-wheeler vehicles through the rider app. Uber has also been offering its standard Courier package delivery via two-wheelers for some time.
Uber’s interest in logistics aligns with the rapid growth of the Indian logistics market, which is projected to expand by 49%, reaching 13.4 trillion Indian rupees ($157 billion) by the financial year 2028, up from 9 trillion Indian rupees ($105 billion) in the financial year 2023, according to Motilal Oswal. This move diversifies Uber’s operations in India, which reported a significant 41.1% increase in operating revenue, reaching $439 million, with ride collections growing by 21.45% year-over-year.
However, Uber faces intensifying competition in the Indian ride-hailing space from local rivals, including emerging players like Rapido and Namma Yatri. Expanding into logistics is a strategic effort for Uber to solidify its presence in India. Additionally, Uber has introduced metro ticketing through its app, powered by the ONDC, following a memorandum of understanding signed during CEO Dara Khosrowshahi’s visit to India in February 2024. The initiative has begun with Delhi Metro tickets and plans to extend to three more cities later this year.
Launched in 2021, the ONDC aims to enhance digital commerce by enabling small retailers to reach customers online. Despite its initial goals, the network has struggled to gain traction among major industry players, experiencing recent leadership changes and a decline in retail orders.
“Uber’s initial enablement of metro ticketing and logistics unlocks new possibilities — from seamless multimodal journeys to unifying a fragmented logistics ecosystem,” stated Vibhor Jain, acting CEO and COO at ONDC. This collaboration sets the stage for future innovations from Uber, enhancing value for users and partners alike in the mobility and services landscape.
