Should You Join the Postmates Fleet?

What is Postmates and how does it work?

Postmates is an on-demand delivery service based in the United States. Through its network of several million contracted couriers, Postmates offers local deliveries in 2,940 American and Mexican cities. While primarily intended to deliver food items, Postmates has expanded its reach to include other types of businesses such as pharmacies and convenience stores. 

Postmates customers must download and place orders through the company’s mobile application. Upon placing an order, a notification is sent to the Postmates-affiliated business at which the order was placed. The business can either accept or decline the order. If the order is accepted the business prepares it and then notifies the system when it is ready. A Postmates contracted courier is then instructed to pick up the order and deliver it to the customer’s address. If the business is not affiliated with Postmates, a courier is sent to the business and, in the case of food, orders it, waits for it to be prepared, and then delivers it. 

After the items are delivered, customers have the option to tip the courier and rate the business. If the order is wrong or there are any other issues, customers have the option to report them. More times than not, Postmates will refund either a part of or the entire order. 

How does Postmates make money?

Postmates does not charge a premium on any of the products it lists. Instead, it chargers a number of fees to pay their couriers, run the company, and create a profit. 

A delivery fee is charged on every order. For merchants affiliated with Postmates, that fee ranges from $1.99 to $3.99. For merchants that are not affiliated with Postmates, the fee is between $5.99 and $9.99. To offset the lower delivery fee, affiliated merchants pay a percentage of profits on items sold through the application. 

A variable service fee is also charged on all orders. This is a percentage-based fee that varies based on a number of factors but is usually between 9% and 19.99% of the total order. 

During busy hours or when there are few Postmates couriers available, a blitz fee is added.

In addition to the service and delivery fees, Postmates charges a small cart fee of $1.99 on orders less than $12. 

Rather than pay all of these fees, Postmates customers have the option of becoming a Postmates Unlimited member. Postmates Unlimited members pay a $9.99 monthly fee or a $95.88 annual fee. For this price, customers get to forgo the $1.99 small cart fee. On orders equal to or above $15, customers also do not have to pay the delivery fee or variable service fee. However, if the merchant is not affiliated with Postmates, the variable service fee will still apply. Postmates Unlimited members do not have to pay blitz fees.

A table summarizing the pricing system (without a blitz fee) is below.

What are the requirements to become a Postmates Courier?

First and foremost, a Postmates courier needs to download the Fleet app on their mobile device. Next, the courier must pass a background check (Note: providing your social security number is required). Postmates then requires a profile photo be uploaded and direct deposit set up. Following the completion of these steps, prospective couriers will receive a final list of instructions by email. 

Couriers must be over the age of 18 and own a smartphone. A valid courier’s license is not required for those who choose to use a different method of transportation. Couriers will receive the Postmates Prepaid Card in the mail to pay for items they purchase for customers.

How much do couriers get paid?

The basic compensation structure for a Postmates courier is as follows: a courier receives a certain amount for each completed pick-up and for each completed drop-off, a per-minute-waited rate for the time spent at the pick-up location, a per-mile rate for the distance between the pick-up and drop off locations, a blitz bonus on select deliveries, and 100% of all tips. All deliveries will pay at least a predetermined, minimum amount.

The dollar value of the above payments varies by location. In New York City, the rate per pickup is $1.00, the rate per drop-off is $1.00, the rate per minute is $0.09, and the rate per mile is $1.30. The minimum per delivery amount is $4.00 and the blitz bonus is determined on a case by case basis.

Payments to couriers are made on a weekly basis.

It is important to understand that Postmates couriers are contractors and not employees. As a result, they do not receive any form of benefits such as insurance or pension plans.

What is it like to be a Postmates Courier?

Below are reviews of Postmates written by several former and current Postmates couriers on Reddit.

markmenteles wrote: “Hard numbers. I have worked 12 days (I have not worked on Saturdays which is detrimental to my bottom line, I know) and during those 12 days I work an average of 5 hours a day. So lets say I have worked 60 hours so far. I have earned $715. That comes out to be about $11.90 an hour. Which for Milwaukee, a small market with a $7.25 minimum wage, is pretty good. I have had to fill my car up with about $40 worth of gas. So that may be closer to the $11 mark. I know I am not getting rich doing this, but at least I have some sort of cash flow coming in.”

petamarinov wrote: “Postmates is absolutely the WORST delivery company to work for. I've worked for several of the major ones as well as a local one. Postmates is the only one that has absolutely no way for drivers to contact support while on the job. Postmates does not let you report a restaurant as closed until you actually drive there, and of course you get no compensation for your wasted time and fuel. Even if you know for sure that the restaurant will be closed before you leave, you cannot cancel the delivery unless you want to take the penalty of cancelling an order for personal reasons. Similarly, Postmates does not allow you to call a customer until you arrive at the restaurant. If you try to call in advance to place the order while driving to the restaurant, and they are out of a certain ingredient, you need to cal the customer to ask what they would like to substitute it with. But guess what, you can't!!”

SAmatador wrote: “The delivery aspect is honestly kind of fun to me as it's a "see task, complete task" kind of thing. It almost feels like a game sometimes. It's a fun kind of challenge to see how well you can make each run go with all of the millions of unexpected obstacles that can pop up during a delivery. Seriously, shit you would never expect. Like an Indian couple operating a pizzeria that won't give you your order because Postmates charged them $5 and not the $8 they should have.”

MrLetter wrote: “This is the first time I've ever used a platform like this or been a courier in the general sense of the term. So maybe I came in with higher expectations than I should have. Which, were low, to be honest. I didn't think I would be making $25+ an hour like all the ads said. But I did think I would at least make the minimum wage of Portland, OR of $9.75 or if I was lucky the $11 minimum wage of the state of Washington since I live there. But instead, it's sitting at $4.10 right now. Because I get one every hour despite chasing the red hexagons all over Portland. Yeah, I may get good tips, but we all know better. So I don't think I'll stick this out. It's not worth the driving around. It's not worth trying to find parking. And it's really not worth the $2 an hour for parking around the city when half of my payout is going to it.”

So, should you join the Postmates fleet?

The answer to this question is not as simple as it may seem. There are two main questions to consider: is the time and effort required to be a courier worth the compensation? Are there any competitors that you would prefer to work for?

To answer the first, one needs to consider their current financial situation and where they would like to be. It is possible for a Postmates courier, depending on location, to make $30,000-$50,000 per year delivering full time. However, this is ill-advised as Postmates does not provide benefits to couriers in the same way a standard full-time employer would. On the other hand, for someone between two jobs, working as a Postmates courier full time is likely a decent way to earn an income before starting a new job. 

Most Postmates couriers do not deliver full time. Instead, they supplement their current income by working for Postmates on the side. They likely already receive some level of benefits from their primary employer and just want to make a little additional money on the side. Postmates could be a solid option for this. Potential couriers still need to weigh the income they would make in their area, the cost of gas in that city, and the estimated depreciation their car will incur.

The second question is slightly more difficult to answer. Postmates’ primary competitors are DoorDash, the UberEats division of Uber, GrubHub (includes GrubHub’s subsidiary Seamless), and Caviar. 

A piece published by Ridester compares Postmates and DoorDash. It found that while both apps are good, the user interface and features of the Postmates app are slightly better than DoorDash. It also found that Postmates provides better customer service to couriers than DoorDash, which lacks a customer service hotline. Most importantly, the pricing of Postmates favors couriers who are willing to travel a long distance per delivery, whereas the pricing of DoorDash favors couriers who would like to make frequent deliveries inside a smaller radius. Ridester found no negligible difference in the difficulty of becoming a courier for either company.  

While UberEats, GrubHub, Seamless, and Caviar were not discussed by Ridester. It is clear that each service has several pros and cons. For example, Postmates has a better app than DoorDash, but if you do not want to put a lot of miles on your car or you would rather use a bicycle, DoorDash may make more sense. The best on-demand delivery employer very likely varies drastically by location. Some services may lack couriers in a particular area and are therefore willing to pay more for them. Others may suffer from the opposite problem and pay couriers less. If you are considering working for Postmates or a similar service, please be sure to do your own research and consider all the differentiating factors of each employer.

SafeMode:

Ever since Postmates became a mainstream method of accessing food, roads have become even more rampant with congestion. Congestion leads to accidents and accidents motivate movements to enhance road safety. While Postmates does not have a centrally managed fleet, SafeMode’s innovative behavior AI and driver profiling technology could pay huge dividends in ensuring Postmates drivers operate safely. SafeMode analyzes driver usage patterns, driving habits, and behavioral reactions to build driver profiles and help protect our roads. Learn more about SafeMode here.