Best Uber into India’s B2B Logistics Scene

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Uber is steering into new territory in India, taking its first big leap into the country’s B2B logistics space by partnering with the Indian government-supported Open Network for Digital Commerce (ONDC). The move aligns with India’s push to break the stronghold of e-commerce giants Amazon and Flipkart, and open up digital commerce for everyone — from small retailers to large enterprises.

Logistics, the Uber Way

Announced this week, It plans to roll out an on-demand logistics service through ONDC, tapping into its massive fleet of 1.4 million drivers. The service will start with food deliveries for businesses on the network, with plans to expand into broader categories like e-commerce, grocery, pharmacy, and healthcare logistics.

This play turns It into a logistics provider on ONDC’s open platform, competing with a growing lineup of established players like Shiprocket, Shadowfax, Loadshare, and the newly crowned unicorn Porter.

According to sources familiar with the plan, the new offering will function like It Direct — the company’s white-label delivery service launched in the U.S. in 2020 — but exclusively for businesses operating within ONDC.

Uber’s Logistics Footprint is Growing in India

This isn’t It’s first logistics rodeo in India. Earlier this month, it launched Courier XL in Delhi NCR and Mumbai, allowing users to send bulky goods (up to 750 kg) using larger vehicles like three- and four-wheelers. The company has already been offering two-wheeler courier services for smaller deliveries through its main app.

There’s serious money on the table, too. India’s logistics market is booming — projected to jump 49% from ₹9 trillion ($105B) in FY 2023 to ₹13.4 trillion ($157B) by FY 2028, according to Motilal Oswal. It, which saw its India operating revenue rise 41.1% year-over-year to $439 million in 2023, clearly sees logistics as a solid pillar for future growth.

Diversification Amid Tough Ride-Hailing Competition

The logistics pivot also gives It a strategic edge as competition heats up in its core ride-hailing business. Local startups like Rapido and Namma Yatri are gaining ground fast, backed by investors like Google and Nexus Ventures. Expanding into logistics lets Uber diversify and stay relevant in one of its most important international markets.

ONDC: A Bold Idea Still Finding Its Footing

ONDC launched in 2021 with high hopes — modeled after the success of India’s UPI payments system, it aims to level the playing field in e-commerce by giving smaller sellers access to digital tools and nationwide reach. In 2023, the platform even entered the mobility sector.

But it’s been a bumpy ride so far. ONDC’s open model hasn’t yet attracted widespread buy-in from major players. Retail orders on the network dropped sharply, from a high of 6.5 million in October 2023 to just 4.3 million in April. Leadership changes haven’t helped either — former MD and CEO T. Koshy stepped down last month.

Still, the Uber partnership could breathe new life into the platform.

“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 of ONDC. “This collaboration lays the foundation for future innovations from Uber on the network.”

Uber + ONDC: More Than Just Logistics

Uber’s tie-up with ONDC goes beyond deliveries. The company has already rolled out metro ticketing via its app in Delhi, with three more cities coming online later this year. This comes on the heels of a memorandum of understanding signed in February 2024 during CEO Dara Khosrowshahi’s visit to India.

Bottom line: Uber’s B2B logistics play is more than just a new feature — it’s a bold bet on the future of India’s digital economy. If ONDC can gain momentum, Uber stands to ride a major wave — not just in rides, but across the entire mobility and logistics landscape.

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