Ride-hailing giant Ola Cabs is all set to join hands with the Open Network for Digital Commerce (ONDC) to offer last-mile delivery services to sellers on the platform.
Sources close to the company told Inc42 that Ola Cabs will soon announce a partnership agreement with the state-backed network to offer last-mile logistics services for all categories, including food delivery, grocery shopping, and pharmaceuticals.
The last-mile delivery offering will entirely be powered by electric two-wheelers at the outset, a source said.
Earlier in the day, Ola cofounder and chief executive officer (CEO) Bhavish Aggarwal hinted at the announcement in a cryptic post on X, formerly Twitter.
“Very exciting stuff coming up with our collaboration at @Olacabs with @ONDC_Official! ONDC is the future of commerce in India and we are committing to it big! Stay tuned for lots of updates in the near future,” said Aggarwal.
This comes nearly three months after reports surfaced that the ride-hailing major Ola had joined the state-backed network and was piloting a food delivery platform. It was also said to be internally experimenting with an ‘ONDC Food’ feature available on its Ola app.
Threat For Zomato, Swiggy?
The partnership with ONDC pits the company directly in competition with foodtech giants such as Zomato and Swiggy.
Ola’s partnership with ONDC will help reignite the former’s foodtech ambitions, a space which has not been kind to the company in the past.
Its past attempts included launching a food delivery service called Ola Cafe in 2015, and the subsequent acquisition of Foodpanda’s India operations in 2017. It also unveiled its quick commerce arm Ola Dash but all the experiments largely failed. The ride-hailing giant pulled the plug on Foodpanda in 2019 and shut Ola Dash in 2022.
The ONDC-centred offering alleviates the pain points of foray into food delivery space as Ola will skip the usual hassle of figuring out integration with the restaurant partners and attracting consumers.
The move also leverages Ola Electric’s strength in the EV space. While traditional players like Zomato and Swiggy are yet to electrify their fleet, the ride hailing giant through its sister concern Ola Electric has the resources and capabilities to quickly deploy EVs on ground and compete better on unit economics (especially fuel costs) with foodtech peers.
As ONDC rapidly scales up operations and daily transactions, Ola’s new move is expected to pose a potential threat to Zomato and Swiggy. After taking years to figure out positive unit economics, it seems Ola has emerged as a new contender on the block with its foodtech ambitions.
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