Uber is advancing into India’s rapidly expanding business-to-business logistics sector by broadening its partnership with the government-supported Open Network for Digital Commerce (ONDC). The move, announced on Monday, positions Uber to bring its extensive network of approximately 1.4 million drivers to deliver on-demand logistics solutions to Indian businesses operating within the ONDC platform. Initially, the new service will focus on food deliveries but is intended to soon encompass other sectors such as general e-commerce, grocery, pharmaceutical products, and healthcare logistics.
Uber’s venture into the B2B logistics market signifies its latest strategic shift, bringing the company into direct competition with established logistics providers like Temasek and PayPal-backed Shiprocket, TPG and Qualcomm-supported Shadowfax, Tiger Global-invested Loadshare, and recent Indian unicorn Porter. Similar to Uber Direct, the logistics arm launched in the United States in 2020, Uber’s B2B offering in India will function as a white-label service tailored exclusively for businesses on the ONDC platform.
In addition to its business-to-business initiative, Uber recently strengthened its logistics capabilities by unveiling “Courier XL” in Delhi NCR and Mumbai. This consumer-oriented service allows users to send larger goods up to approximately 1,653 pounds (750 kg) using three- and four-wheeler vehicles booked within the existing rider app. The company has offered a more basic courier option reliant on two-wheelers for delivery of smaller packages for some time now.
India’s logistics industry has become a significant area of focus for Uber as the market size is expected to surge 49 percent to reach 13.4 trillion rupees (approximately $157 billion) by fiscal year 2028, from 9 trillion rupees ($105 billion) in fiscal year 2023, according to data from Motilal Oswal. Uber has already achieved notable growth in India, reporting a 41.1 percent increase in operating revenues from ride-hailing alone to $439 million in the previous year, reflecting a corresponding rise in customer demand.
However, the competitive landscape for Uber within India is intensifying. Emerging local rivals such as WestBridge Capital-backed Rapido and Google-backed startup Namma Yatri are proving increasingly ambitious in the country’s ride-hailing sector, reinforcing Uber’s pivot towards multiple revenue streams beyond ridesharing. Its entry into the logistics sector could provide a crucial avenue for sustained growth in this challenging marketplace.
Alongside logistics innovations, Uber has introduced metro ticketing features in its app, beginning with Delhi Metro. This marks another significant step in the strategic collaboration with ONDC following a memorandum of understanding signed during a visit by Uber CEO Dara Khosrowshahi to India in February 2024. Metro ticketing availability will expand to three additional Indian cities later this year.
The Open Network for Digital Commerce initiative, initiated in 2021 by the Indian government, was designed as an open platform enabling small retailers and businesses to connect to larger digital markets. Despite attempts to replicate the success of India’s Unified Payments Interface model, ONDC has faced slower adoption rates and tough competition, alongside management turnover which recently saw CEO T. Koshy step down. Order volume also declined approximately 34 percent, dropping from a high of 6.5 million in October to 4.3 million in April.
Vibhor Jain, acting CEO and COO of ONDC, stated that Uber’s new services represent a meaningful step toward creating a unified logistics and transportation ecosystem. The integration with ONDC, Jain emphasized, sets a foundation for future innovations designed to provide greater convenience and efficiency for both users and partner businesses across India.
