Uber enters India's growing B2B logistics market by expanding its partnership with government-backed nonprofits, aiming to break the domination of Flipkart, which is supported by the e-commerce duo Amazon and Walmart, and expand the domination of digital commerce in South Asian countries.

On Monday, the ride-hailing giant announced it would soon launch its B2B logistics service through the Open Digital Business Network (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 provide food delivery to businesses operating on an open network, but aims to expand into e-commerce, grocery stores, pharmacies and even healthcare logistics.

With new moves, Uber will serve as a logistics service provider on ONDC and compete with ShipRocket (Temasek and Paypal support), Shadowfax (TPG, Qualcomm Ventures and Eight Road support), most recently Indian unicorn and Tiger Global Bass Backed Loadshare.

This will be a white label service and will be similar to Uber Direct launched in the U.S. in 2020, but limited to businesses available on the ONDC Network.

Uber's attempt to enter B2B logistics in India follows the company's expansion in consumer logistics by introducing Courier XL in Delhi NCR and Mumbai earlier this month to help users deliver up to 1,653 pounds of large merchandise from the company's Rider App by selecting three- and four-wheeled commodity carriers. For some time, the company has also provided its regular courier package delivery service on two-wheelers.

For Uber, it generally makes sense to focus on logistics, as the Indian logistics market is expected to grow 49% to INR 13.4 trillion (US$157 billion) in 2028 from INR 9 trillion (US$105 billion) in 2023. The move will increase operating income by 41.1% last year to drop to $439 million. Last year's results also showed a 21.45% increase in ride collections from total operating revenue to $94.27 million.

Nevertheless, Uber faces competition from local players in the Indian ride-hailing market, including emerging competitors such as Rapido (supported by Westbridge Capital and Nexus Ventures) and Namma Yatri (Google, Blume Ventures and Antler Invested). It diversifies it into new areas such as logistics, which is expected to help San Francisco-based companies use India as a key market.

In addition to its B2B logistics game, Uber is based on ONDC-powered rider apps, the memorandum is an honorary event that understands the company signed with Indian government-backed nonprofits when CEO Dara Khosrowshahi visited India in February 2024.

Founded in 2021, ONDC debuted as an initiative to promote digital commerce in India and allows small retailers to access the Internet and easily attract more customers. The network also expands into the mobility industry in 2023.

ONDC was originally designed to replicate the success of the Indian government’s unified payment interface, aiming to drive digital commerce adoption. However, it has been struggling to gain traction as its open network model has not yet won major industry players. Recent leadership rips exacerbates its challenges, even its former managing director and CEO T. Koshy resigned last month. Retail orders on the network also fell nearly 34% at its peak in April to 4.3 million, down from the peak of 6.5 million in October.

“Uber’s initial enablement of Metro ticketing and logistics unlocks new possibilities – from seamless multi-modal journeys to a unified fragmented logistics ecosystem,” said Vibhor Jain, ONDC’s acting CEO and COO, in a prepared statement. “This collaboration lays the foundation for future innovations on the Uber network, enhancing the value of users, partners, and the broader mobility and service landscape.”