ONDC expands into mobility space, takes on Ola, Uber with Namma Yatri onboard

The Namma Yatri app currently has over 45,495 drivers and 4.5 lakh customers, with an average trip fare of Rs 165, with driver earnings currently at Rs 8.44 crore.

The Open Network for Digital Commerce (ONDC) on March 23 onboarded Namma Yatri onto its platform as part of its open mobility initiative. This marks ONDC's entry into the mobility sector, where it will compete with players such as Ola and Uber. This move comes after ONDC's expansion into food, grocery, e-commerce, and other segments.

ONDC went live in some pin codes of Bengaluru on September 30, and has since expanded to several cities — two of which including Bengaluru are in the beta stage, and 181 in the alpha stage.

Namma Yatri, an app built by Juspay Technologies and backed by the Beckn Foundation in partnership with the city’s auto drivers, is currently open source and does not take any commission from drivers. ONDC said this open mobility foundation will allow customers to book rides from multiple apps, and will also become multi-modal down the line where various modes of transportation — such as cabs, metro and buses — will be integrated into the app.

Also Read: Understanding ONDC, the open network billed to be the UPI of e-commerce

The Namma Yatri app currently has over 45,495 drivers and 4.5 lakh customers, with an average trip fare of Rs 165, with driver earnings currently at Rs 8.44 crore. According to Namma Yatri, it has over 1 lakh weekly trips and is looking to amplify its growth by being a part of the network.

While Uber is a platform and ONDC is not, the ride-hailing firm has attempted to enter the multimodal transport market and even has a tie-up in Gurugram where customers can book tickets on its app.

In a statement, ONDC CEO T Koshy said the open mobility network will build a large ecosystem of customers and service providers, and also provide equal opportunities to mobility players of all sizes and between existing and new players. “It provides equal opportunities to mobility players of all sizes and between existing and new players. It also helps drivers and service providers to earn a livelihood not beholden to platform interests. Finally, it amplifies the impact and the leverage of public transportation systems. What UPI and NPCI did to digital payments, ONDC intends to do for mobility,” he said in a statement.

Speaking to Moneycontrol, Koshy said it is not that they are fighting with platforms like Ola and Uber, but sees a situation where these players will also find a way to be a part of the larger network. He likens it to UPI, when it was believed that it would eat the lunch of players like Mastercard or Visa, but it collectively enhanced the market.

“There is room for everybody, just like sand on the beach, just because you pick up something I don't lose anything. I have the opportunity. The whole idea of the platform-centric mindset let me hold it all together. That's not what we're trying to do. Let us all share it and make life good for the merchants, drivers and the users, then collectively, they will benefit,” he said.

“If you're using proprietary technology and proprietary platforms, the users are logged into that. Supposing n number of buyers are on one platform, then that platform becomes a monopsony buyer for the sellers, so their control becomes very hard. They have the data, they become the deciding authority of who should be informed, who should be given priority, what should be the advertising, etc., whereas now when this network becomes open, the power comes to the endpoints — the brand owner, the taxi driver decides their terms,” he added.

Vimal Kumar, the founder of Juspay told Moneycontrol that Namma Yatri is like a SaaS platform for drivers. He added that they are now looking to optimise the product to make it cost-effective, and will move towards a subscription model to recoup costs.

“Typically, a lot of times we optimize much later in the product lifecycle, but in this kind of a product, since we are open sourcing it we are making it transparent. So this is our maps cost, this is our cloud cost, engineering cost, R&D cost, etc. By giving transparency. we can arrive at a good cost, which is probably the best way,” he said, talking about how they would finalise that subscription fee. This will be done in consultation with auto drivers and launched in the next few months, he said.

The growth of ONDC

Koshy said that the network had about 800 merchants in December, and stands at over 26,000 merchants today. In terms of the number of transactions, he said it has gone up from 20-30 a day to 200-300 transactions in the same time period. He said it was a chicken-egg situation, where the usage will increase as more merchants are on the platform.

Koshy said that while they started with grocery and food, they have also opened up in other beauty and personal care segments. With Snapdeal, which recently started accepting orders through ONDC, Koshy said that many more products, such as fashion, electronics, financial products, and more, will be available in the future.