How much does Grubhub pay their couriers, and is that pay still competitive with other delivery options? Because Grubhub is not a direct employer, and instead contracts with self employed couriers, the answer to that question isn't as cut and dried.
How much does Grubhub pay? There is no hourly wage for Grubhub contractors. Instead, couriers are paid on a delivery by delivery basis. Earnings rates can fluctuate wildly based on a wide variety of factors. Some couriers average over $30 per hour while some, once their expenses are factored in, can average well below ten dollars per hour.
We'll look into the elements that factor into how much pay one can receive from delivering for Grubhub. Then we'll look into different factors that impact those earnings. We'll look at how to compare those earnings with potential from other alternatives. Finally, we'll look at whether one has the power to improve how much pay they receive for Grubhub deliveries.
How much does Grubhub pay? Breaking down how pay is calculated.
Remember that payment for delivery is calculated on a delivery by delivery basis. Grubhub will offer a delivery with a map showing the restaurant and the customer and a pay amount.
The offered pay amount includes a base fee, the customer's tip, and sometimes some additional or bonus pay depending on circumstances.
A driver can choose whether to accept or reject that delivery. Once they complete that delivery, they receive the offered amount.
Here are some of the elements that go into how much Grubhub does pay when you accept and complete a delivery.
Grubhub base pay or delivery fee.
Usually the Grubhub offer is based on two things: The base (what Grubhub will pay you) and the tip.
Grubhub states that the base is calculated on the estimated time and distance involved in completing a delivery. On the page linked, they give a sample of 13 cents per estimated minute and 22 cents per estimated miles.
Grubhub has not been transparent about exactly what the actual rates are per market (they say that rates vary by market). They do break down the mileage portion of the pay in their reports, but not the time portion.
Keep in mind that Grubhub's delivery and mileage fees are based on estimates, not on real time. In their pay explanation they state that “Time and mileage estimates are set when you receive the offer and will not change based on actual time or mileage driven.” If you have a longer than anticipated wait time, Grubhub does not compensate for that extra time.
Generally it has been that the minimum pay from Grubhub has been $3 plus whatever tip.
Bonus and incentive pay
Grubhub will sometimes offer extra pay to make sure that deliveries are accepted.
Sometimes it will be an announced offer. When things are extremely busy they might announce that they'll offer extra pay per delivery, or they'll guarantee you get so much per delivery.
Other times it's unannounced. I have seen times where there was a higher than normal delivery fee or an unexplained “bonus” added. I think that happens when they feel like a delivery is at risk of not being accepted, so they'll bump up the price to make the offer more attractive.
The $9 minimum
There was a point during the pandemic that drivers began to notice that suddenly the smallest offer was $9. Under their regular pay model, offers can be as low as three bucks.
I never noticed any announcement from Grubhub that they were moving to a minimum of nine dollars. It just started happening. If the tip plus the delivery fee added up to less than nine dollars, Grubhub made up the difference.
Thus, if there was no tip, the entire $9 was paid by Grubhub.
A lot of the couriers who signed on with Grubhub during that time had the impression that this would always be the case. As things slowed down, Grubhub began easing off of that $9 minimum and many thought Grubhub was cutting pay.
It's not so much that Grubhub was reducing pay but backing off of the increases they had put in place when demand was really high.
How much does tipping impact Grubhub pay?
Grubhub does encourage their customers to tip well. They default to recommending a 20% tip when placing an order (in my experience).
The entire tip is paid to drivers.
My experience is that tipping on Grubhub has been better than what I have seen from Uber Eats, Doordash and Postmates. For a long time, this made Grubhub probably the most attractive delivery platform for me.
The Grubhub hourly minimum compensation
I mentioned that there is no hourly wage with Grubhub, which is true.
But some will respond, wait a minute, Grubhub pays a minimum wage.
Let me make this clear right now: Grubhub does NOT pay a minimum wage.
Grubhub does sometimes advertise that they will have a minimum hourly guarantee. This minimum compensation is not available in all markets. In a number of markets though, they say they will make up the difference if your earnings do not equal the hourlyl minimum.
For example, if you were scheduled for four hours and your market has a $12/hour minimum, you are guaranteed at least $48. If your total of tips and delivery fees equal less than $48, Grubhub will make up the difference.
Why this is not a real minimum wage
There are a few caveats involved here.
You are only guaranteed for times that you schedule yourself and you have to accept a minimum percentage of deliveries. Tips count against the total, meaning that the more customers tip, the lower the contribution from Grubhub.
Grubhub also counts ALL money earned for the entire day and compares that to the SCHEDULED hours.
If you were scheduled for four hours and your last delivery took you an extra hour, your guarantee is only for four hours. It's kind of like that last hour was worked for free.
If you make money outside your schedule, your money earned is added to your total earnings for the day, but the hours you delivered are not added. Say your ‘minimum' is $12 per hour. You were scheduled 2 hours but didn't make any money. But then you work outside the schedule and earn $24. Grubhub math is that you earned $24 (daily total) in 2 hours (scheduled hours.
Tell me how that's a minimum wage.
What does impact the pay you can get while delivering for Grubhub?
I look at a lot of statements that say you can expect to make so much per hour when delivering for Grubhub.
Most times, that's hogwash.
I'll tell you there are people who think they're making a lot and they're lucky if they're netting $5 per hour.
That said, some folks are legitimately making in the twenties and thirties per hour on Grubhub deliveries. I had a period where I was consistently hitting $40 per hour or more.
Why so much fluctuation in earnings? Here are four factors:
What Grubhub does pay you is not how much you are actually earning.
Here's the thing you have to remember:
You're running a business. You are operating all these deliveries on your own dime. That's the nature of being an independent contractor.
And it costs money to use your car. Probably a lot more than you think.
The bottom line is the bottom line. In other words, what you are making is your PROFIT, not how much Grubhub does pay you each week. It's what's left over after you count the cost of running your business.
Grubhub loves their long distance deliveries. A ten mile delivery is costing you a lot of money (not just gas). People who are driving more miles than dollars earned are making a lot less than they realize.
It starts by understanding profit.
Ultimately, I think the best way to calculate how you are doing is to look at your Profit per hour. You can read more about calculating that here. Ultimately, you can evaluate a single delivery against a whole day of deliveries against a complete month, all by looking at profit per hour.
The time and distance of a delivery make a big difference.
Remember this that I said right at the beginning of this:
couriers are paid on a delivery by delivery basis
Not all deliveries are created equally.
In fact, not all $10 deliveries are created equally. If one will only take you ten minutes to complete and you drive less than a mile, that's completely different than another ten dollar gig that takes you fifteen miles and an hour to complete.
Go back to that profit per hour. The 1 mile 10 minute delivery paid $58.20 profit per hour (based on 30 cents a mile actual cost) compared to the one hour 15 mile trip at $6.50 profit per hour.
Your particular market makes a big difference.
Customers tip better in some places than others.
There are some cities where Grubhub is extremely busy. Other places, they only have a small handful of restaurants.
Some areas have more fast food places where tips tend to be lower, while other markets have a lot of higher end restaurants.
You'll make more in a city where Grubhub customers tip better and things are busier than in a location where tips are bad and things are slow.
Busier = Better Pay
When things are really busy, that's when you can make money. You have a better selection of deliveries to choose from. There's a higher likelihood of bonuses and incentives.
At one time during the pandemic, I was averaging more than $40 per hour on deliveries. Delivery was extremely busy and there was more money per delivery.
It didn't hurt that traffic was next to nothing (see the part above about time and distance).
What does pay from Grubhub compare to that of other delivery companies?
I don't think there's a universal answer to that question.
You will find some who deliver for Grubhub who feel like they make a lot more with them than with anyone else, and someone else in the same city will feel like it's worse.
And they can both be correct.
Think about all the factors I just mentioned above. They can all vary. They're all factors for all the other companies.
Here are my observations based on my market:
When it comes to the formula for the base pay, I find that Grubhub is generally a little better than Doordash and Postmates, and usually a little less than Uber Eats for similar deliveries. That is, as long as none of them are running incentives.
I think that tips tend to be better on Grubhub than just about anyone else. Grubhub does not seem to pay as much in incentives as the others.
After those things, it comes down to how busy are they? How much extra driving do you have to do for Grubhub or for any of the others?
While I can often make a higher profit per hour on Grubhub deliveries, lately I'm not earning as much through Grubhub as I have been with others because there haven't been as many good paying deliveries.
When things are busy and steady and the deliveries are not horrible in distance, Grubhub can be ahead of them all. It depends on how all those factors fit in with Grubhub in your area compared to how they fit with the other options.
What impact can you have on how much Grubhub pays?
You've got more control than you realize.
Your power to control your earnings relates a lot to your understanding of the factors above.
You can choose what deliveries to accept and reject. Grubhub tells you exactly what a delivery will pay. That's one thing I like about them over all the others. Doordash and Uber Eats MAY pay more than they offer, but you don't know. With Grubhub, what you see is what you get.
You can choose the times when delivery is most profitable.
The other area where you can make a ton of difference is your efficiency. One of the biggest factors in my increase in earnings year over year is, I get just a little faster. I get more deliveries done in an hour now than I ever have.
Faster deliveries = more deliveries = more money.
Your decision making process has a lot to do with your earnings potential.
Here's my take: YOU are the one who makes the biggest difference in what you can earn. Your mindset and your approach mean more than what Grubhub pays. If you decide to take control and responsibility for your own earnings, you rely less on Grubhub.
Then it does not matter what Grubhub will pay. If it's enough you accept it, and if it isn't enough you find someone who will pay enough.
Then, you get to be the boss. Not Grubhub.