ONDC encouraging ride-hailing apps to increase penetration beyond metro cities: MD and CEO T. Koshy | Company Business News
The Open Network for Digital Commerce (ONDC) is working with existing network participants as well as interested apps to increase penetration in tier-II and tier-III markets, thereby enabling a truly democratised mobility ecosystem, T. Koshy, the managing director and chief executive officer of the body, said during a media discussion on Monday.
While innovation and methods to expand serviceability lies in the hands of the firms building on the open network, ONDC is helping participants with discoverability, the executive said.
Nitin Nair, a senior vice president for ONDC’s south India division, added that the network’s structure encourages small players to join and service an area, helping to cater to local demands.
“Ultimately, the network is an orchestrator for more players to come in. ONDC’s unbundled network structure means there’s going to be more participation. Bottomline is that discoverability is an important aspect,” Nair said.
Diverse ecosystem
ONDC structure comprises buyer apps and seller apps across categories including food delivery, ride-hailing, e-commerce, and grocery. While buyer apps bring in the demand from consumers, seller apps process the orders. Currently, mobility accounts for about 40% of the 15 million transactions made on the network with Kochi Metro and Chennai Metro Rail Ltd leading the wave.
Namma Yatri, among the top auto rickshaw-hailing apps on the network, which recently raised $11 million, is touted as ONDC’s “success story” in the government’s Economic Survey of India 2023-24.
ONDC is also encouraging companies to adopt the zero-commission model in which companies provide software to the drivers instead of charging a commission on each transaction.
“Unlike aggregators, zero-commission SaaS models do not exercise control over attributes like pricing and payment collections, or on the actual delivery of the transportation service. A zero-commission SaaS model can be best described as a pure software interface that enables a peer-to-peer engagement between drivers and passengers by focusing on discoverability. Such models, when on the ONDC Network, can benefit its robust framework for building trust, which includes grievance redressal, transparency, fairness, and non-discrimination,” ONDC explained in its white paper titled ‘Driving Digital Inclusion—Open Network and New Business Models in Mobility Apps released on Monday.
