The Open Network for Digital Commerce (ONDC) has onboarded Namma Yatri, a Bangalore-based auto-hailing app that charges drivers zero commission, MoneyControl reported on March 23.
Why does this matter: While ONDC was designed to work for all kinds of e-commerce activities since its inception, it has thus far only focused on grocery, food and beverages, and direct-to-consumer (D2C) brands. Namma Yatri becomes the first ride-hailing app to join the e-commerce network, paving the way for other mobility apps to join the network and for Namma Yatri to scale beyond Bangalore.
How will you be able to book rides on ONDC: ONDC is not a platform in itself. As a consumer, you will have access to buyer apps that are on ONDC, and you can use these buyer apps to shop or book rides. Paytm, for example, is one such buyer app that is expected to support ride-hailing services soon, but, in the future, any of the many buyer apps should ideally let you book rides on Namma Yatri or any other ride-hailing service that is on ONDC. Down the line, all forms of mobility, such as metro and buses, are also expected to be available on ONDC. ONDC is currently testing with limited users in over 180 cities and is publicly available for all users in Bangalore and Indore.
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What is Namma Yatri: Launched in November 2022, Namma Yatri competes with the likes of Ola, Uber and Rapido in the autorickshaw-hailing market in Bangalore. Its unique proposition is that all the earnings go directly to the auto driver without any commission being levied, which is in sharp contrast to other ride-hailing apps that charge around 30 percent commission.
Took my first ride with Bangalore’s worker-owned worker-run app for autorickshaw drivers. It was clean, smooth and not exploitative. Created by the autorickshaw union – Namma Yatri – gives 100% earnings to drivers and save riders money. If you’re in Bangalore download the app now pic.twitter.com/7tPXhgleED
— ashok kumar 🇵🇸 (@broseph_stalin) March 19, 2023
Who owns Namma Yatri: The app claims to be “made by the drivers,” but their role in building and launching the app is not clear. Juspay Technologies developed and launched the app, and the app is built on the protocols provided by the Beckn Foundation, which also forms the backbone of Kochi’s Yatri mobility app. ONDC is also based on Beckn-like protocols, which is why the integration of Namma Yatri with the network is feasible.
How does the app make money then: Since the app does not charge drivers a commission, a big question that’s lingering is how the app makes money to run the infrastructure and provide services. The lack of transparency here has also led to criticism about the app’s intentions. Juspay, however, recently told MoneyControl that they might start charging a subscription fee, presumably charged to the driver.
You are just looking at the use value of material labour. You are not taking the use value of data that is being acquired, it's ownership. With most apps, data becomes a surplus that is used for exploitation. Also it's fare, not fair.
— Srinivas Kodali (@digitaldutta) March 21, 2023
How widely is Namma Yatri used: Namma Yatri has an open dashboard that has live statistics about the platform. As per this dashboard, the app has completed over 5 lakh trips since November 2022 and drivers have earned over ₹8 crores from these trips. There are over 45,000 drivers and 4.7 lakh users registered on the platform as of March 24, 2023.
Why is Namma Yatri a threat to Uber and Ola: From our limited use of the app, and based on customer experiences shared on Twitter, we found the fares to be competitive with Uber and Ola and the availability to be at par or better in some instances. For auto drivers, the incentive to work with Namma Yatri is clear (zero commission) and for users, this could lead to better availability of drivers. If this positive feedback loop is exploited successfully, Namma Yatri poses a huge threat to Uber and Ola. But, until we know the business model of Namma Yatri, it is hard to predict how sustainable the platform will be in the long run.
Meanwhile, ONDC might not be a threat yet because awareness about the network and consumer demand on the network are both low. But if these two pick up, ONDC could pose a threat to Uber and Ola as well, as buyer apps on the network will become a one-stop shop for comparing prices between various ride-hailing services.
How does ONDC benefit drivers: For drivers, ONDC allows better discoverability. The driver only has to be part of one ride-hailing app like Namma Yatri, but can be discoverable to multiple consumer-facing apps because Namma Yatri will broadcast availability to all buyer apps on ONDC. So users on Paytm, PhonePe, MyStore, etc. will all be able to see the rides offered by a driver on Namma Yatri. This applies to any mobility app on ONDC. The drivers will only have to be part of one such app to be discoverable to all users, unlike how it works with Uber and Ola, where the drivers must be on both apps to tap into the different user bases.
“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. […] 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.” – ONDC CEO T Koshy to MoneyControl
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