Ola Mulls The ONDC Route To Capture A Bigger Chunk Of The Ride-Hailing Market

Ola Mulls The ONDC Route Capture A Bigger Chunk Of The Ride-Hailing Market

SUMMARY

Ola has been experimenting with ONDC since August and has embedded a new ‘ONDC Food’ feature within the Ola app itself, available only for company employees

This comes a week after Ola’s CEO Bhavish Aggarwal publicly said that the company plans to join ONDC but had refrained from divulging details

While it was largely expected that Ola would join ONDC as a mobility player, the move to take the food delivery route appears to be the company’s latest attempt to dabble in the foodtech space.

September 1, 2023 | 08:33 PM

Ride-hailing major Ola has reportedly joined the state-backed Open Network for Digital Commerce (ONDC) and is piloting a food delivery platform.

Sources told The Economic Times that the startup has been experimenting with ONDC since August and has embedded a new ‘ONDC Food’ feature within the Ola app itself. As per the report, the feature is currently available only for Ola employees.

The pilot enables Ola employees to access multiple restaurants listed on the network and order from them via Ola app. This pits the ride-hailing giant directly against foodtech giants Zomato and Swiggy.

Meanwhile, the company management reportedly sent an email to all its employees on August 24 seeking their feedback on the trial run.

“This ONDC integration works out great for Ola because now they do not have the hassles of figuring out integration of the restaurant partners and consumers. The next step would be to open the food delivery to consumers beyond employees,” a person privy to the development told ET.

While it was largely expected that Ola would join ONDC as a mobility player, the move to take the food delivery route appears to be the Bhavish Aggarwal-led company’s latest attempt to dabble in the foodtech space.

Be it launching the food delivery service called Ola Cafe in 2015 or the acquisition of Foodpanda India in 2017, all major attempts by the company to establish itself in the space have largely failed. The company shut Foodpanda in 2019 and subsequently wound up its quick commerce arm Ola Dash in 2022.

Now, ONDC seems to be the new experimenting ground for the company to realise its foodtech dreams. The sector is currently largely a duopoly of Zomato and Swiggy.

Original Story| August 31 | 10:05 PM

Ride-hailing giant Ola is reportedly planning to jump on the Open Network for Digital Commerce (ONDC) bandwagon.

As per Medianama, Ola’s chief executive officer (CEO) Bhavish Aggarwal, while addressing the India Internet Day event held on August 24 in Bengaluru, said that the company was planning to join the state-backed network. He, however, did not divulge any details.

Inc42 has reached out to the company for a comment on the matter, and the story will be updated accordingly.

The development comes five months after ONDC forayed into the mobility space to enable smaller local players to compete with behemoths such as Uber and Ola. With this, Ola could be looking to tap into the growing ONDC ecosystem, which counts Namma Yatri, the Juspay and Beckn Foundation-backed ride hailing app for autos, as the sole mobility player on its platform.

While Namma Yatri currently offers services only in Bengaluru, Ola could be looking at a pan-India offering on ONDC, with its eyes set on getting the first-mover advantage. As and when Ola debuts on ONDC, the drivers of Ola may benefit from the high discoverability aspect of the network.

Simply put, the state-backed initiative will allow participating platforms (in this case mobility players) to broadcast their services across all apps on the network. As a result, a user looking for rides will simply be able to compare prices from both Namma Yatri and Ola and choose accordingly.

As adoption grows and more and more players join the network, users could see more competitive pricing as companies undercut each other for a bigger pie of the ride-hailing market. This could pose a threat to the duopoly of Ola, which it enjoys with Uber in the ride-hailing space.

On the other hand, Namma Yatri has so far banked on the zero commission model for drivers to drive adoption but the platform will begin charging drivers beginning September 1.

Besides, buyer apps such as Paytm, Pincode and Spice Money may also potentially hold the key and emerge as an avenue for users to book rides on ONDC. Paytm, too, has plans to roll out support for booking rides, while other players may also follow suit.

At a time when the ride-hailing giant is struggling with several issues, including increasing losses, customer complaints about its subpar services and growing competition from new and existing players, the move to list on ONDC may bode well for Ola.

This comes days after ONDC CEO T Koshy said that the platform is merely ‘creating sparks’ right now, adding that an ‘explosion’ would happen when the platform gathers volume.

Brainchild of the Department for Promotion of Industry and Internal Trade (DPIIT), the network aims to ramp up ecommerce penetration to 25% in the next two years. At stake is the growing ecommerce opportunity, which is projected to reach $400 Bn by 2030.