India government-backed open e-commerce network expands to mobility

Open Network for Digital Commerce, the Indian government-backed initiative that is attempting to “democratize” e-commerce, has set its eyes on another industry it would like to disrupt.

ONDC, a nonprofit firm set up by India’s commerce ministry in 2021, is opening up its railroads to serve mobility firms, it said at a press conference in Bengaluru Thursday.

The firm is kickstarting its mobility journey by onboarding Namma Yatri, an on-demand auto rickshaw booking app operational in Bengaluru. The recently launched open source mobility app, developed by payments startup Juspay, says it serves nearly half a million customers and works with 45,000 drivers. Namma Yatri is seeking to compete with Ola and Uber, undercutting the giants on fee that they collect from drivers and customers.

ONDC, which requires its partners to perform know your customer verifications for safety concerns, will expand its mobility efforts to more states and cities and broaden the kinds of vehicles in the offerings, said T Koshy, the chief executive on ONDC, at the conference.

“To make transportation convenient and affordable in our growing cities, it is important to provide a seamless experience to users. Open systems like ONDC enable the collaboration and interoperability needed to make it happen,” said Anurag Jain, Secretary of Department for Promotion of Industry & Internal Trade, in a statement.

With ONDC, New Delhi is seeking to replicate the success it has had with UPI, the interoperable mobile payments network that disrupted the walled-garden mobile wallets from firms such as Paytm and MobiKwik. With over 8 billion transactions a month, UPI is the most popular way Indians transact online. Paytm, PhonePe and Amazon are among partners of ONDC. Flipkart’s logistics network Ekart is currently piloting with ONDC.

But ONDC is struggling to make inroads with e-commerce with limited collaboration from partners and the number of transactions on the network is not growing fast enough. ONDC insists that it is in talks with Reliance Retail, Google Pay, Dunzo and Meta’s WhatsApp for collaborations and Toshy dismissed the idea that the network needs established players to grow.

“Nowhere else in the world open networks exist. It’s all proprietary and closed systems,” said Koshy. He declined to comment if Uber and Ola have shown any interest in joining ONDC.