Govt plans to take on Ola, Uber with zero-commission ONDC

India’s government-backed open commerce network has begun offering ride hailing at zero commission, a move that could shake up dominant ride-sharing companies, Uber Technologies Inc. and its homegrown rival, Ola. 

Namma Yatri is now on the Open Network for Digital Commerce, or ONDC, for Bangalore city and offers three-wheeler auto rickshaw rides where neither drivers nor riders pay any commission.  

The new service has been unveiled at a time when dissatisfaction runs rife among users and drivers over the non-availability of cars, unreliable service and high commissions charged by the two prominent cab-hailing platforms. 

The app currently has 45,000 drivers for the auto rickshaw rides. The startup backing it is planning to expand to other cities and provide multiple modes of transport including cabs, buses and metro rail. Nearly half a million users have already used the Namma Yatri app for rides, ONDC Chief Executive Officer Thampy Koshy said in a media event on Thursday.  

Nonprofit ONDC, set up in 2021, is backed by the government’s commerce ministry with a goal of democratizing commerce. The mobility app is open source so rides can be integrated by a variety of apps, including digital payment providers such as Paytm and PhonePe. 

In its first phase of growth, ONDC has enabled grocery and restaurant deliveries in multiple cities in competition to Amazon.com Inc and Walmart Inc.-owned Flipkart. Its food-delivery partners are newer and will take on Softbank Group Corp.-backed Swiggy and Tiger Global-backed Zomato Ltd.  

Over 25,000 grocery and food-delivery partners are on the platform, Koshy said.  “We are enabling thousands of restaurant deliveries daily and will soon begin adding financial services providers,” he said. 

Amazon, Google and Facebook’s WhatsApp have so far ignored invitations to come aboard the platform.