The offices and hubs are located in existing buildings leased from landlords and there are no indigenous people, biodiversity or cultural heritage affected by the company’s business activities. Accordingly, the findings of the project review indicate that there are no impacts related to Land Acquisition and Involuntary Resettlement (PS5), Biodiversity Conservation and Sustainable Management of Living Natural Resources (PS6), Indigenous Peoples (PS7) or Cultural Heritage (PS8).

IFC has categorized this equity transaction as a Category B project, according to its Policy on Social and Environmental Sustainability (January 1st, 2012). The rationale underlying this categorization is based on the scope of activities and current operations of the company in India.

 Environmental and Social Policies: Shadowfax is a relatively new company (founded in 2015) with limited environmental and social (E&S) risks and impacts from its current business operations. At present, it does not have a documented E&S policy or procedures or safety policy to address the risks and impacts of its operations. The current legal compliance requirements are met through necessary statutory documentations, filing and license renewals, e.g., government approvals/registrations for leased office space. The company has a documented Human Resource policy manual (more in PS-2 section below). Going forward, and as set forth in the Environmental and Social Action Plan (ESAP action #1), Shadowfax will develop and implement corporate policies and procedures on risk assessment of new product/service, fire safety, emergency response, environment, occupational health and safety, road safety.

Environmental and Social Assessment: At present, there is no policy or regulation from the government which governs app based delivery service. The company is required to register its various offices and hubs under the Shops and Establishment Act of different States. Shadowfax aims to comply with national and local applicable regulatory requirements which, to date, are primarily limited to legal registrations, management of staff and contracted workforce. Verification of every delivery partner is undertaken by the company before the partner is authorized and registered for providing pickup/delivery services through company app. As part of verification process key documents related to Address proof, Permanent Account Number (PAN) Card (tool for income tax payment), bank account details (for making payments), Adhaar Card (biometrics based unique identification number assigned to citizens of India), driving license and the vehicle registration details, taxes, and insurance details are recorded.

Environmental and Social Management Programs: At present, Shadowfax does not have a documented E&S management system. Some of aspects relevant to working conditions and safety are covered through the business service agreement which is signed by every delivery partner before they can use the mobile application platform of the company, as discussed in detail under PS-2 below. Going forward, the company will formalize a management system to address the following key elements: (i) occupational health and safety at the office premises, hubs and distribution centres; (ii) waste management practices at the hubs and distribution centres; and (iii) road safety for delivery partners. Some of these aspects will become more critical in future as the company’s customer base diversifies and its geography of operations expands. The company will therefore implement necessary procedures to address these risks and impacts as outlined in the ESAP action #1. Further, going forward, as part of ESAP action #1, it will define specific E&S compliance monitoring procedures for each company’s operation and facility, E&S compliance monitoring of its contractors and franchisee and E&S due diligence for any future assets it may acquire or own.

Organizational structure and management capacity: The E&S roles and responsibilities have not been assigned in a structured format and are currently informally discharged through operations staff in the respective regions who ultimately report to the operations head and the chief operating officer (COO). The various business heads (food, reverse and forward delivery, air delivery, operations design and process control and strategic planning and analytics) report into the COO. Similarly, the head of administration and procurement, head of accounts and head of business finance and analytics report into the Chief Financial Officer, whereas the Chief Technology Officer is supported by the head of engineering, a team of product managers, a data scientist and a data analyst. The company recently recruited a Chief HR Officer for the HR function.

All partner registrations are done digitally, or at regional offices and hubs and the digital records are maintained centrally at the Bangalore head office. Physical documents are uploaded on the Shadowfax app by the partners at the time of registration based on which partner ID is generated. These records are also physically verified by Shadowfax staff at the nearest regional office or hub.

Going forward as the E&S policies are drafted, Shadowfax will nominate a team of senior operations managers to ensure that the policies are implemented across the business activities (ESAP action #2). The senior operations managers will provide feedback to the COO. Shadowfax will subject the implementation of its E&S policies and procedures to internal and external audits, according to an audit program, and will take actions on the recommendations (ESAP action #4).

Training: Employee training covers aspects related to company processes, services it offers, HR policies and on job training based on departmental needs and requirements. At present the company does not have a formal training program on fire safety and emergency evacuation.

The delivery partners also undergo mandatory training delivered at the company’s training centre or nearest hub location where the company is operating. The company has also developed an online training module (“Gurukul”) for the delivery partners. The module is available on the Shadowfax app and covers basic training on delivery aspects. This training is also available online and covers simple road safety instruction such as obeying traffic and parking rules, wearing a helmet, complying with speed limits, resorting to defensive driving, avoiding pedestrian walkways, using correct lane, correct use of indicator, maintaining safe distance and proper vehicle maintenance.

As per ESAP action #3, current training programs will be strengthened by including modules on emergency response, incident reporting, maintenance of hygiene for food delivery, workplace ergonomics and basic fire safety awareness and emergency evacuation at its offices/hubs. All these will be delivered through regular trainings and awareness building sessions by online and/or face to face modules and will be notified through a trainings calendar.

Monitoring and Reporting: Once the partner is active on the network, the service quality level is monitored through the app by the backend team of Shadowfax. This monitoring is done to keep the customer updated on progress of the delivery. The app allows generation of information on the online hours of the partners, partners availability through real time GPS network monitoring, and monitoring app comments/ feedback on partners. Company runs a partner care centre to address the concerns/grievance of delivery partners and the service is available in local languages as well. Shadowfax tracks data on active, online and offline partners and delinquencies, numbers of trips, driver earnings etc. The company does not proactively monitor data on accidents and incidents. Shadowfax will further strengthen its monitoring and reporting process by including training statistics and incident reporting from all business locations, as per ESAP action #4. Over time these reports would be available through a management dashboard. E&S performance, including safety performance of the partners, will be reported to and reviewed annually by senior management.

Emergency Preparedness and Response: At present, Shadowfax does not have a formal mechanism or system of ensuring that the premises it occupies hold valid fire licenses and basic registration and statutory approvals. These are ensured over a period. All vehicles delivering Shadowfax services are GPS tracked via the mobile application which needs to be kept active. Going forward, as per ESAP action #5, Shadowfax will strengthen its emergency preparedness by ensuring trainings, ensuring availability of relevant safety gears and first aid kits, portable fire extinguishers and other safety measures in line with national laws.

Human Resource Policy: Currently, Shadowfax has around 327 permanent employees which includes 24 female employees. Shadowfax also has 688 third party workers hired through various manpower contractors. All HR functions are currently handled centrally such as recruitment/talent acquisition, HR operations, training, learning & development, HR policy creation etc. New employees are communicated about the policies during induction and onboarding. Human resource function is currently managed by the Director HR Operations and Head of Talent Acquisition, who are assisted by two HR executives. The company has recently recruited a Chief HR Officer. Policy revisions and new policies are approved by the CEO and communicated to the employees through revised policies notification.

Shadowfax will update its retrenchment policy and procedure that will comply with local requirements and IFC Performance Standard 2 to be applied in the event that the company’s business plans lead to staff retrenchment at any of Company’s current operations. Shadowfax will also upgrade other HR policies and the manual in compliance with the Shops and Establishment Act, other applicable labor laws and in line with this Performance Standard. As part of ESAP action #6 this will be completed for implementation in next six months.

Working conditions and terms of employment are communicated through appointment letters which are followed by induction training and posting. Defined working hours, weekly holidays, leaves (including maternity leaves, public holidays and festival leaves), salary payments and statutory deductions are implemented in line with applicable laws. Induction training covers basics of the job, HR policies and administrative procedures, reporting lines and job expectations. In terms of contracting through third party, and in view of the planned expansion, the company will start monitoring franchisee and contractor’s compliance with the applicable labor laws and regulations and this Performance Standard (ESAP action # 1).

Delivery Partners: The delivery partners are not engaged on any employment contract with the company, and are completely associated on voluntary and non-exclusive basis and hence are not under any obligation to follow Shadowfax’s instructions on service delivery (apart from following terms on quality of services as described in the ‘business services agreement’ and explained at the time of onboarding training). The company poses no obligation on the delivery partner to work a minimum number of hours/days for Company. The partners have flexible timings and can chose to log-in the application anytime s/he wants and for howsoever long s/he wants, as per his sole discretion. The Company supervise the actions and conduct of the partners only to ensure proper discharge of services under the agreement. At the time of registration, the Partner needs to mention the geographical area (“clusters”) s/he would like to service and this can be changed later but the partner has to go through verification process for the new cluster s/he wants to join. The Partner can also choose the timeslot s/he intends to be available for (“slot”). The slots are generally 3-8 hours long depending on the product segment i.e., food, pharmacy, ecommerce and also depending on the geographical location and time of the day. The partner can also book a slot in advance through the feature available on the app. The partner can also choose the payout frequency (weekly/monthly), and model of payout (minimum guarantee/pay per order). Company also has a Women in Shadowfax (“WISH”) program to promote women delivery partners.

Once the preferred slots in the preferred cluster have been booked, the partner can start delivering the services by coming online on the app. The Company manages the network of orders from various Clients (through API integration which connect the Client’s end consumer to Shadowfax) in different locations and availability of delivery partners in those locations and hence need to ensure minimum assurance of partner availability. A partner is required to be online during his selected slot and till the completion of delivery. During the timeslot and inside the cluster, the delivery request is auto allocated to an available partner, who can then choose to accept the delivery or let it time out. However, it is expected that the partner is not repeatedly declining the same passenger request as it has bearing on customer experience.

The payouts, incentives and rewards are based on number of completed deliveries and penalties are levied for delinquency in service quality such as becoming untraceable during delivery process or going offline during the selected timeslot. All these terms and conditions are informed to the partner at the time of onboarding. The per delivery payout structure, milestone and timely delivery incentive structure, referral bonus (referring a new partner to Shadowfax). There are other milestone incentives which start accruing after reaching certain number of lifetime deliveries completed. These include, daily accruing self-retention equity (after completing one delivery in a day), and monthly accruing referral retention equity (if the referral undertakes x deliveries in a month). All of this is part of onboarding training as well as available on the Partner dashboard on the app where they can monitor the payouts, incentives, delivery statistics etc. Partners are charged a onetime non-refundable onboarding fee which is deducted from the payout and the partners are provided with a bag, a raincoat and a set of two t-shirts.

The general terms and conditions that the partners sign digitally at the time of registration, include compliance with applicable laws, possession of valid licenses, valid accidental insurance, valid vehicle registration etc. The conditions further mention that the partners shall follow the traffic rules comply with the applicable motor vehicle rules, not subcontract the delivery to anyone else, or contact customers for any other purpose. All vehicles are owned by the partners, fuel, maintenance and insurance expenses are borne by the owners and any liability arising out of the ownership is that of the partner.

Non-discrimination and equal opportunity: Shadowfax will develop and implement a non-discrimination and equal opportunity policy in line with national regulations and this PS-2.

Protecting the Work force: The company has a multitier grievance redressal process which covers workplace complaints, including harassment of any nature. However, as indicated above, the grievance redressal policy is not documented and this will be addressed as part of ESAP #6. The company has no policy restrictions on freedom of association and employee organizations, but it will document it in the required HR policies. Similarly, the company will document a policy on prohibiting child and forced labor in its operations.

Occupational Health and Safety: Shadowfax will manage occupational health and safety and fire safety at all premises in line with applicable laws and align the same with its operating procedures for hubs, distribution centre and shipment handling procedures. Shadowfax will follow the applicable labor laws in this regard and the OHS policy will comply with the applicable rules and this Performance Standard. Through its training programs Shadowfax will keep tracking and improving the OHS performance indicators like accidents, incidents, injuries, ergonomics etc. As per ESAP action #3, a safety training program will be designed and implemented, with modules designed to cover (i) company’s staff and contracted workers present on premises where company operations are conducted; and (ii) the delivery partners to the extent applicable

Air emissions: Sources of air emissions are limited to emissions from vehicles used by delivery partners.

Electricity and Water: Electricity and water use arise from routine office tasks, remain low, and do not represent a significant source of impacts.

Effluents: There are no wet processes at Shadowfax’s offices, hubs or distribution centres.

Solid Wastes: Limited volume of solid waste is generated in offices and hubs which includes domestic waste, packaging waste paper, reusable polypropylene woven bags, broken pellets etc. These are disposed to local vendors periodically. The company will earmark proper area for storing the solid waste

Community Health and Safety: The company operations do not pose serious risks to health and safety of local community. Risks associated with any explosions or failure of infrastructure or equipment do not arise. Potential risks to communities across Shadowfax’s operations are primarily associated with the risk of road accidents. The company is currently providing basic awareness to all delivery partners on safety measures to be followed while driving on road, obeying traffic rules, defensive driving, not driving on pedestrian walkways etc. The company is currently not monitoring accident/ incidents. Going forward, and as set in ESAP action # 3 and ESAP action # 5, the company will strengthen its training modules and will monitor safety performance, including incidents, and compliance with the policies. 

Security Personnel: Shadowfax’s business premises are small sized and do not have armed security personnel.

There is very limited interaction with a member of general public. The interaction is limited to delivery and pickup as per the terms agreed with the Clients. Company provides training to the delivery partners on behavioural aspects on how to engage with customers, not engaging beyond the requirement of the service, appreciation of anti-harassment laws including sexual harassment and women safety etc. The partners are tracked through the app and the Company can monitor the time spent per delivery. Feedback from the customers and Client is also taken seriously and action can be taken against the partner in case of complaints.