Is Zomato eating its greens? 🥬

The foodtech unicorn is readying itself for an IPO, but the ESG message seems muddled

This is edition 277 of Beyond The First Order, a premium daily newsletter that demystifies the hidden models, incentives and consequences of the most significant events across India and Southeast Asia

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Good morning,

Seetharaman’s experience with getting the first jab of the Covid-19 vaccine got him thinking about the differential pricing for the vaccine in India. And how that can be exclusionary.

Rohin ran a poll on Twitter asking everyone about the ethics of jumping the queue for a vaccine jab. And since that’s exclusionary as well, what can we do to make it more inclusive.

And I decided to look for an acronym–ESG–in foodtech unicorn Zomato’s document that lays out its IPO plan.

What Zomato is not saying about ESG

Last week, the PE world and Dalal Street (India’s Wall Street) was abuzz with one news: foodtech delivery platform Zomato could soon be going public. Not on the US Nasdaq. India was going to have one of its first home-grown unicorns turn into a listed company on its own bourses. 

The pandemic has been a boon for the food delivery business. In the past year, DoorDash in the US and Deliveroo in the UK went public. It’s a tailwind that Zomato is also riding on. And as India battles the second wave of the virus, Zomato’s founders themselves appeared in ads during the Indian Premier League, the popular cricket tournament, espousing the safety of food delivery and asking viewers to “order now”. 

Now, plenty has been written about Zomato’s impending IPO. I’d recommend reading Sumanth’s story, which comes out today, if you want to understand its unit economics better. But I looked for something else—mentions of environmental, social, and governance (ESG) practice—in Zomato’s Draft Red Herring Prospectus, which is the preliminary document filed by a company in the run-up to an IPO. 


Well, a few days ago, in between all the push notifications from Zomato about 40% discounts on my favourite restaurants, and messages to stay safe and order in, another kind of notification popped up. It said that Zomato was funding environmental projects to offset its carbon footprint from bike deliveries and food packaging. 

It sounds promising, so I scoured the DRHP looking for any mention of ESG, carbon, climate. Because you’d think that for #GreenZomato, these words would make their way into a 416-page document that’s the foundation for a company with plans of a stock market listing to raise money from the public at large. 

Well, here are the results. 

Nothing about the environment. Or even governance, really.

Except for mentions of the Social Security Code—part of India’s new labour codes announced last year—which sought to empower gig workers via a social security fund, and their social impact initiatives such as ‘Feed the Daily Wager’, there’s not much else to go by as a measure of Zomato’s ESG commitments or metrics.

But under ‘litigations’, we find this:

The EPFO [Employee Provident Fund Organisation] has further observed that our delivery partners should be treated as employees under the Act and social security benefits should be provided to them.
Our Company has responded to the Notice by way of its letter dated January 17, 2020, denying the allegations and submitting, among other things,...

...(iv) our delivery partners are not employees under the Act, and hence the Act is not applicable to them.

Subsequently, the enforcement officers have submitted an interim report dated February 22, 2021 to the regional provident fund commissioner stating that the delivery partners cannot be treated as independent contractors and recommended that all delivery partners be treated as employees of our Company. The matter is currently pending.

Even on ESG,

The letters “ESG” do not appear in the prospectus for Deliveroo’s initial public offering. The 224-page document is free of the statements of environmental, social and governance principles that clutter many large companies’ annual reports.

In the multiple responses to a tweet by Zomato’s CEO Deepinder Goyal on climate-conscious delivery, you can see there’s still at least that one person who’s looking at investing through the ESG lens.

Although, the lack of any real mention of ESG isn’t really going to be a roadblock for many investors as they chase the ‘scarcity premium’ that a home-grown food tech listing brings. 

With a rise in ESG-focused funds in India, it’ll be interesting to see where Zomato fits.

PS: If you’re interested in knowing more about ESG funds in India, I’d recommend that you read Seetharaman’s story from last month. 

The perils of multiple prices for vaccines in India

After a cancelled appointment, my partner and I managed to get our first dose of the Covid-19 vaccine at a private hospital in Mumbai on Monday. We paid Rs 850 (US$11.5) each for a jab of Covishield, the AstraZeneca vaccine manufactured by the Serum Institute of India (SII). 

A day earlier, a friend of ours had also received a dose of Covishield in Mumbai; only, he didn’t pay for it because it was at a state-run hospital. If you think the price range for two jabs of a Covid-19 vaccine in India is zero to Rs 1,700 (US$23), you would be mistaken. 

On Tuesday, healthcare platform Practo got flak on Twitter for its vaccination plan targeted at companies looking to inoculate their employees. At a neat Rs 2,500 (US$34) for both doses. The company quickly removed the pricing from the list of FAQs on its website, saying it was incorrect

Differential or tiered pricing is not new in vaccination. Vaccine makers set prices based on how rich or poor a country is, helped by the likes of Gavi, the United Nations-backed vaccine alliance that aggregates demand from low-income countries. 

The World Health Organization argues in favour of creating further tiers: 

Differential pricing has worked well to bring down the prices of traditional vaccines, but this low price in developing countries means to manufacturers that the developing country market is not profitable. Therefore, vaccines aimed only at the developing world, such as malaria vaccines, have suffered from inadequate research and development investment. One solution to this problem could be further tiering of the developing country market into higher and lower income groups, so that the higher end developing country market is seen as profitable.

But India’s approach to differential pricing within its own boundaries does not seem to be grounded in such reasoning. While the CoWin website lists which vaccination centres are charging a fee, you are going to take whichever slot is available even if it means you have to pay. 

The government can argue that those who can’t afford to pay for the vaccine can await their turn at a public hospital, where they can get a jab for free. But people want to get inoculated at the earliest, even if it means they can barely afford to pay for it. You don’t want to be put in this position by the government you have elected to take care of your interests. 

A former chief economic advisor to the Indian government recently came up with a solution. 

While this is taken for granted in a high-income country, even India would do well to consider it. Subramanian also called for the Centre to bear the full costs of vaccines instead of passing the buck partially to states, which are being charged a higher rate by SII and Bharat Biotech, the maker of Covaxin. 

On Monday, we wrote that the use of technology in India’s Covid response and vaccination drive has been exclusionary in more ways than one. 

As the country faces an acute vaccine shortage until July, the divide between the haves and have-nots keeps worsening. The fact that it has come down to this, for getting access to what is supposed to be a universal right, is a problem of epic proportions.

And the hodge-podge that is the differential pricing of vaccines only adds to that problem. 

The ethics of jumping the Covid vaccine queue

Practo, one of India’s most funded healthcare startups, gave a glimpse of this when it briefly exposed its private vaccination pricing yesterday. It offered a price of Rs 2,500 (US$34) to private companies to vaccinate each of their staff. That is 400% higher than the price the Indian government had mandated for private hospitals till last month. 

Practo took down the page subsequently.

Yesterday, we covered the rise of online bots and chat groups that tirelessly queried India’s vaccination platform, CoWin, to find scarce vaccination slots. This clever and ingenuous hacking was enabled by the government’s decision to throw open CoWin’s APIs to the general public

Because India has grossly mismanaged the process of ordering enough vaccines for its population, they’re likely to be in dire short supply all through 2021. Even today, the signed agreements disclosed by the Indian government are only enough to cover roughly 170 million people. India’s population is 1.3 billion.

With the government having abandoned a nationally coordinated vaccination campaign (unless the Supreme Court forces it to), vaccination is now a free-for-all in India. Those who can afford to—which means this writer and virtually everyone reading this newsletter—will, of course, pay a decent profit margin to private hospitals and companies who offer vaccines.

But in a large and developing country where the majority of the population is still too poor, uneducated and technologically backward, this throws open really concerning issues around the ethics of vaccine queuing.

More specifically, the ethics of jumping a vaccine queue.

It is important to separate two cases. In some cases, queue jumping is wrong because it involves displacement – taking someone else’s place.

To use a trivial example, if there are 100 seats in a cinema and you jump a queue of 100, someone who has waited will not get a seat. This sort of displacement can be wrong because it disrupts a fair process for allocation. Someone misses out.

But with vaccines, there is a more important reason. Vaccine allocation schemes prioritise those at greatest risk of severe COVID. If someone jumps the queue, another person who is at higher risk will have their vaccine delayed and may become seriously ill in the meantime.

Self-preservation is one of our strongest instincts. No one can be faulted for wanting to merely keep themselves and their family members alive in the face of a ravaging pandemic that has overwhelmed the country.

But it doesn’t prevent us from having conversations around the ethics of vaccine queue jumping. Or ways to mitigate its impact on those too poor or uneducated to be able to do so for their own families. 

A vaccine that reinforces systemic inequalities could also end up further reducing the belief that the underprivileged have in two key ideas of democracies—equality and fairness.

These ethical goals include reducing deaths and hospitalizations among high-risk groups, as well as promoting solidarity and protecting against systemic unfairness disadvantaging vulnerable populations.


Studies have shown that an uncertain delay – one in which you are not sure how long you will be waiting for a service – can reinforce subordination and political resignation on the part of those already vulnerable.


They also inject market forces into a sphere generally governed by other ethical principles, such as the rights of all patients to health care. Skipping the line undermines this commitment. It also exposes line-jumping to be both a symptom and a cause of inequality.

This is the concern when it comes to the rollout of the COVID-19 vaccine. The CDC and the different states’ phased allocations have prioritized equality and mutual responsibility. Illegitimate line-jumping is a direct threat to these principles and works more insidiously to undermine them.

Would it be okay for a rich person to pay 10 people to stand in a queue at a crowded vaccine centre, increasing his chances of securing a dose? Is it different if the person used technology to simulate that, via a bot in a software queue?

This writer asked a question about the relative ethics of jumping the vaccine queue on Twitter yesterday

Unlike general access to healthcare, Covid vaccination is one that requires us to rethink a newer set of ethical principles around access and distribution.

“Prioritization decisions are first and foremost ethical decisions. They are not scientific decisions, although they are often presented as if they were,” say the authors of a recent research paper on the question of vaccine queue ethics

Here’s a useful, albeit US-centric view of the ethics involved in vaccine queues. 

Even with the drastic underreporting of Covid cases and fatalities in India, it’s clear that the worst-affected will be the most marginalised. The poor. The old. The migrants. The villagers. Already underserved by both government and private healthcare, they are already paying catastrophic personal and economic costs due to the pandemic. 

Are there ways we could find to improve their odds of getting the vaccine, even a little?

Vaccine donations? Sponsorships? Organisation-wide drives in underprivileged communities? 

Do write in with your thoughts. We’re only at the beginning of this difficult problem. We can try to find some ways to soften its blow on Indians.

That’s a wrap for today.

Hope you’re taking care of yourself, staying socially distant, masking up, and washing your hands frequently.

Write in with your thoughts and observations on how this pandemic is reshaping businesses, societies, and economies. We will be back tomorrow.

Stay safe,
[email protected]

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