How much does Grubhub pay their independent contractors? How do they stack up against another food delivery service like Uber Eats and Doordash? With Postmates shutting down the Fleet app now that the merger with Uber Eats is complete, is Grubhub a good alternative to them?
You won't find salary information like you might find on popular job sites Glassdoor or Indeed. Anyone that tries to tell you that information is misinformed. There is no average salary or base salary or hourly wage.
That's because couriers are not Grubhub employees. Drivers are independent contractors who are paid on a delivery by delivery basis. They are self-employed, so we're talking about profits, not wages.
So how do you begin to evaluate what Grubhub pays? Is it possible to compare? How can you begin to determine if it's worth it to deliver for Grubhub?
In this article we'll walk through the different ways you can figure out what to expect to earn if you deliver food for Grubhub:
- Understand what Grubhub delivery pay really is.
- Learn how Grubhub calculates their base pay
- Look at Grubhub incentives, bonuses and minimums
- Consider how customer tips factor in
- Look at the big picture and calculate profit per hour
- Look at ways you can improve your profit per hour
- Learn how to evaluate Grubhub pay compared to other food delivery apps.
Understanding what Grubhub pay really is
Remember that driver pay for delivery is calculated on a delivery by delivery basis.
Like other apps, Grubhub delivery drivers are not assigned deliveries. Instead, the Grubhub app for drivers displays a delivery offer with details including:
- The name and location of the local restaurant you'll pick up from
- A map showing the customer location
- The total amount the delivery will pay.
The offered pay amount includes a base fee, the customer's tip, and possibly additional bonus or incentive pay depending on circumstances.
A driver can choose whether to accept or reject that delivery. Once you complete that delivery, you receive the offered amount.
One huge advantage of the Grubhub offer is that what they offer is what you will get. They don't play games hiding the tip amount. Not like what Uber Eats and Doordash drivers experience. What you see is what you get.
Most times, anyway.
The bottom line is, Grubhub pay is task oriented. You complete a delivery, you get paid for the delivery. That pay is a combination of what Grubhub pays and what the customer pays. Grubhub has a base pay or delivery fee, then they may pitch in some extra bonuses or incentives.
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Customers usually tip with their credit card or debit card through the app when placing their order. They cannot change the tip amount (there may be exceptions but they're extremely unusual). It is possible you can receive extra money from cash tips.
The combination of those two things determines your delivery earnings. That pay from each of those deliveries accumulates through the week until it gets put into your bank account via direct deposit. In some circumstances other pay may be added later based on incentives and stuff we'll talk about.
How Grubhub calculates base pay or delivery fee.
We'll start with the base pay. That's the delivery fee that Grubhub pays out themselves.
Grubhub states that the base is calculated on the estimated time and distance for a delivery. Generally they'll break down the pay as delivery pay, mileage, and tip. Sometimes they add a bonus. On the page I linked to, they give an example of 13 cents per minute and 22 cents per mile.
The rate can vary per market. However, Grubhub never does tell drivers what the formula is for their market.
Looking at the above screenshot, it's easy to tell how much Grubhub is paying for mileage. The math tells you that it's 23 cents per mile.
However, they never do say how many minutes the delivery pay was based on.
In my experience, the 13 cent per minute rate is probably not too far off. In fact, if you look at the example above, it was 41 minutes between the first and last offer. Total delivery pay for the first two deliveries was $5.14. If you divide that by 13 cents, that comes out to 39.5 minutes.
Most deliveries I look at seem to fall in that 13 cent per minute range.
Understand this: Grubhub calculates the pay based on time and mileage ESTIMATES. They do not pay based on real time time or distance. This can be good because you know exactly what you get paid. This can be bad because if the total time is longer than estimate, you don't get paid extra.
Overall, the patterns tell me that what Grubhub pays more if they think a delivery will take longer or if you have to drive further.
Grubhub Bonus, incentive and minimum pay
The delivery fee we just talked about is a bare minimum. Grubhub may sometimes offer extra as an incentive to make sure deliveries are accepted.
If you notice the last delivery on the screenshot in the last section, there was a $1 bonus. We don't know what that was for. Grubhub often doesn't say.
During the pandemic, Grubhub started using a minimum pay feature in a lot of markets. If the tip and delivery fee didn't meet the minimum, Grubhub would make up the difference.
Sometimes the extra money is unannounced. Grubhub may feel the need to pay more on a delivery that they think won't get delivered.
I've seen an inconsistency in how Grubhub reflects that additional pay. Sometimes a “bonus” amount will show up like the example above. Other times, the “delivery pay” is substantially higher than 13 cents per minute. I've never seen a consistent pattern in how they decide to reflect the additional pay.
Then there are some other additions to pay that we'll look at below.
Grubhub's increased minimum pay.
I noticed in my specific area during the pandemic that suddenly no offers were less than $9. Grubhub never announced a minimum pay. They just started using it.
It was something Grubhub had to do when demand skyrocketed. They needed to make sure all orders were fulfilled.
They never bumped up their actual pay formula. I think this created some confusion. A lot of drivers thought Grubhub actually paid higher. All they did was supplement deliveries when the customer didn't tip or where the tip was low. The pay formula itself never changed.
If the calculated delivery fee was $4 and the customer tipped $6, you received $10. However, if the customer never tipped, Grubhub would pitch the extra to ensure you received at least $9 total. That $5 might show up as “bonus pay” or it might be added to the “delivery pay.” They've never been consistent in that.
I think a lot of newer drivers thought there would always be a $9 minimum. As things slowed down, Grubhub began easing off of that $9 minimum and many thought Grubhub was cutting pay. Instead, it's just a matter that Grubhub no longer needs the additional pay minimum to get drivers. The pay model itself hasn't changed.
What I find amusing about this is that this is really the same thing as the old pay model that got Doordash in trouble. Maybe people didn't complain as much because a $9 minimum is much better than Doordash's $5.50. Even still, the customer could tip $0 or $5 and drivers receive the same pay.
The Grubhub hourly minimum compensation
I mentioned that there is no hourly wage with Grubhub, which is true.
Some people think Grubhub pays a minimum wage. Let me be clear: They do NOT.
Grubhub does sometimes advertise an hourly minimum guarantee in some markets. This is not a minimum wage. There are strings attached and many times you still don't get a true minimum.
For example, here in Denver Grubhub offers a $12 hourly minimum guarantee. They say if you don't earn at least the $12 per hourminimum, they'll make up the difference. Well, sort of.
You need to accept a very high percentage of orders (usually 95%) to qualify for that guarantee.
So let's say you signed up for a four hour block. No offers come in. If your minimum guarantee is $12 per hour, Grubhub pays you $48.
Pretty sweet, right? However, things aren't always as they seem.
The problem is, Grubhub is a little wonky in how they calculate things.
Grubhub calculates it based on hours scheduled, compared to actual money made for the entire day.
If you work extra hours, Grubhub counts the money you made, but they don't count the hours.
Using that example above, you worked four hours with no deliveries. You get $48. Say you decide to keep working. You bring in 40 bucks over the next three hours.
You still get $48.
Real math says you worked 7 hours and only got $40. That's $5.71 per hour.
Grubhub math says you got $40 in 4 hours. Their minimum is $48.
You worked three extra hours and didn't make an extra penny for it.
See how that's not a minimum?
They count all the extra money. They don't count the extra hours you worked. In both cases, their math favors Grubhub.
And oh, by the way, if you reject orders while unscheduled? That goes against the acceptance rate and disqualifies you.
Let's go back to that original example. You scheduled four hours and never received an offer. Grubhub's going to pay you $48.
But then let's say you forgot to log out. Two minutes later, Grubhub finally sends an offer. You have to drive 20 miles, you have to wait in a long line at a drive through to pick it up and Grubhub's offering $5.
You know you aren't getting any extra money for taking it, so you reject it.
Two minutes ago, you were set to get $48. But now you rejected the offer. Now you get nothing.
The moral of the story? Never rely on the Grubhub minimum.
Sometimes Grubhub will offer a bonus of so much extra money if you complete a certain number of deliveries or if you accept a higher percentage.
For example Grubhub once offered me $4 extra per delivery during the dinner rush if I accepted everything. In that instance, I felt like the extra pay was worth meeting the conditions.
Usually those incentives are paid several days later (or sometimes several pay periods later).
The important thing to remember when Grubhub offers a deal like this: Read the offer like a lawyer. They're notorious for wording an offer in just such a way that they can weasel out. For example, I received an offer that said “we are increasing pay by up to 15%.” There was no additional pay.
Did they lie? Not technically. The promised “up to.” They could have thrown in an additional penny and they technically increased pay.
California has some extra things in the mix.
In California, there's an extra piece at play. Proposition 22 requires that gig companies pay a minimum of 120% of minimum wage (for active time on deliveries) plus thirty cents a mile driven.
And here's the thing: Grubhub is not allowed to factor tips into that equation. The amount that they pay out of their pocket has to at least equal that hourly rate plus rate per mile.
Grubhub does not have to pay for idle time. If you are waiting between orders, that wait time does not factor into that minimum pay. The calculation is not real-time, but a weekly total. In other words, each week they add up total miles and active time and calculate the minimum from those.
How much does tipping impact Grubhub pay?
Grubhub has typically been very good at encouraging tipping. When I open up the mobile app to order, they default to a 20% tip recommendation.
The entire tip is paid to drivers.
In some instances, customers will also tip with cash. Sometimes they'll tip both through Grubhub's website or app and THEN additionally with cash. However, in most cases the tip amount has been set when the order was placed.
My experience is that tipping on Grubhub has been better than on other apps. For a long time, this is the one thing that often made Grubhub probably the most attractive delivery platform for me.
As I mentioned before, Grubhub doesn't typically hide tip amounts. They are the only one of the three major delivery companies that includes the full amount of the tip in their delivery offer. From time to time, Grubhub has been known to experiment with other ways of displaying offers, usually in very small test markets. However, for the most part, you know what you're getting with Grubhub deliveries.
There are times that Grubhub has done an about face on how well they encourage tipping. In California, when they started adding a surcharge to cover the extra costs related to Prop 22, Grubhub started discouraging tips. They often defaulted to a $0 suggested tip. If the customer had to pay more to Grubhub, they could reduce the suggested tip and make it look like they really weren't charging more.
Overall, outside of the games they played in California, I have found that Grubhub was among the best at encouraging their customers to tip well.
Evaluating Grubhub earnings by looking at profit per hour
We looked at all the elements that go into delivery pay and tipping when you deliver for Grubhub.
However, because for the most part it's a delivery by delivery thing, it's hard to really determine how that compares with anything else you do.
If there is no wage or salary or hourly amount (since we already discussed the hourly minimum with Grubhub isn't truly a thing), how do you measure that against other delivery platforms who do the same thing, or against actual forms of employment?
That's why some things you see about how well Grubhub pays are a real fallacy. Check out this screenshot from a search:
I'm sorry, but Indeed.com lost all credibility in my opinion. There is no average annual salary. There are no average driver wages because this is not a delivery job. In fact, there are no wages at all! What are they talking about???
Even more hilarious, their article posts a link to a sample cover letter. They obviously haven't applied for any of these gig delivery platforms themselves.
However, if there is no salary, how do you compare to something where there is one?
Remember that this is technically a business.
Here's something you have to keep in mind when you deliver for Grubhub: You're not making as much as it seems.
Grubhub may pay you a certain amount for a delivery. But that's not what you actually earned.
As an independent contractor, you are doing this as a business. You are using your own vehicle to make these deliveries happen. That costs you money (and often much more than you realize because of wear, tear, and depreciation).
Too many people compare what they receive from gig economy platforms to a salary they receive. It's not the same thing. Taxes haven't been taken out of that Grubhub pay and neither have expenses.
The only way to truly compare is to look at your Grubhub payments (or anyone else like that) through the lens of profit. In other words, you have to figure out what it's costing you to operate your business, and subtract that cost from your earnings.
Your profit, the money that's left over after expenses, is what you are really earning.
Calculating profit per hour.
The best way to understand how well you are being paid as a gig economy worker is to calculate your profit per hour.
Some contractors resist any thought of hourly rate because they feel looking at hourly is more of an employee mindset. However, the reality is that in the gig economy, you're trading tasks for money.
And those tasks take time. It's not like a lot of businesses where you build a foundation, market your business, and put a lot of time into things that will pay off days, months or years later. You deliver, you get paid. When that's how it works, your best way to measure what you're doing is to look at profit per hour.
Here's how you figure it out:
- Add up the money that comes in
- Subtract your cost to get profit
- Divide profit by the time it takes to perform your deliveries.
The formula I usually use is Earnings – 30¢ per mile divided by hours. That's because 30 cents per mile is what I've calculated as the OVERALL cost of using my car. More driving equals higher costs. That means lower profits.
If I brought in $1,000 in 40 hours worth of deliveries and drove 800 miles, it works like this:
800 miles at 30 cents a mile is $240. That's the cost of doing business. That means my profit is $760 ($1,000 – $240).
My profit per hour is $19.
What you've done here is put your business into a perspective that you can compare it. You could caculate your profit per hour that you earned as an Uber Eats driver or a Dasher with Doordash and compare. And you can look at it more realistically against traditional salaries. It's closer to an apples to apples comparison.
How can you improve your profit per hour with Grubhub?
Ever see those ads that suggest you can make $20 per hour?
Most times, that's hogwash.
It's not that that's not possible. But a simplistic statement that says you can make this much with Grubhub fails to consider all the factors.
Here's the problem: A lot of times people are bringing in that much money but they aren't really making that much. See our discussion on profit.
The other problem, and the thing that makes it so hard to even discuss how much Grubhub pays to begin with, is there's so much variety. One person can barely be making enough to meet expenses, while another courier in the same market can profit thirty bucks per hour.
What am I getting at?
How much you make with Grubhub depends largely on you. There are several things that can make a huge difference in what you are profiting as a Grubhub delivery driver.
Your decision making process
The important thing here is you're contracting with Grubhub as a business. NOT as an employee.
And this means you get to decide when, how and where you work.
It also means you can decide which orders you accept.
In fact, Grubhub may well give you the best information of anyone on which to decide. While Grubhub does not display how many miles you're driving at the time of this article, you do know exactly what they will pay you on any offer.
That means you know when it's going to be a dud. Why would you take that dud? You can evaluate delivery offers and choose if it makes sense.
The second most important thing you can do to increase earnings is the amount of time it takes to deliver. Efficiency is huge.
When it comes to profitable, speed is greater than dollar amount. Several short fast deliveries will pay more than a higher paying offer that takes a long time.
And if you can make that high paying delivery a fast one, that's the best of all worlds. But if a delivery takes up too much extra time, that'll shoot you down.
Every year my profit per hour has gone up. And each year there's one statistic that matches that increase almost exactly: Deliveries per hour. Average pay per delivery has been quite steady. It's as simple as more deliveries = more pay.
Working the right places and times.
Okay, this is more decision making.
Which pays more? In the suburbs or downtown? I don't think there's a set answer to that, it can vary by market. But pay attention and then choose to work the one that does.
You're going to do better delivering from 5 to 8 than from 2 to 5. Cold stormy nights when there's a big sporting event on TV will be more profitable than the perfect weather kind of day where everyone's out at the barbeque.
Get to know when and where works, and you'll make a huge difference in what you earn.
How does Grubhub pay compare to that of other delivery companies?
I don't think there's a universal answer to that question.
You will find some Grubhub contractors 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, for all of the food delivery companies.
That said, here are my observations based on my market:
When it comes to the formula for the base pay, Grubhub is generally a lot better than Doordash and usually a little less than Uber Eats.
Grubhub seems to be the least likely to offer incentives. I see extra pay on busy nights less frequently than Uber Eats or Doordash. That said, during the pandemic Grubhub stepped up their game with the minimum pay more than any of the others.
Tips tend to be better on Grubhub than just anyone else. When I look at their ordering platforms, more often than not Grubhub is recommending higher tips. Their restaurants seem to be higher priced, and that can influence the tip.
Remember, these are all observations based on my market. It can be different in other areas.
One big factor has moved Grubhub from the best paying app in my market to the worst:
That's how busy they are.
I still get more average money per delivery on Grubhub than anyone else. Uber Eats is catching up.
But the problem is I don't get as many deliveries. I can't stay busy with them like I once could. There are longer waits than I've ever known after completing a delivery.
This is something that obviously varies by market. However, in Denver there was a time you never had to wait more than 2 minutes for the next delivery offer. That cowbell was always ringing.
Even though different markets are different, I do think there are two major factors in this. One is that Grubhub is losing ground to Doordash and Uber Eats. They've plummeted in market share in a big way.
The other is that I think they've been over-hiring. I don't hear about drivers being on wait lists as much these days. This means the market can be saturated, with more drivers competing for fewer orders.
The thing is, which ever delivery platform is most consistently offering quality deliveries where you are is the one who is going to usually provide the best driver earnings.
So it's really not whether Doordash or Grubhub or Uber Eats is best paying. It's who works best for you.
The most important factor in how well Grubhub pays:
When you take control, you aren't at the whims of how Grubhub does things. They play a lot of games, but you don't have to play along.
I think this is the biggest problem for anyone who feels like Grubhub doesn't pay enough, or Doordash, or Uber Eats.
If you approach them as though they are the gods of your ability to earn, you'll get exactly what you expect.
However, if you treat this like a business and start deciding what the most profitable way to run your business is, you control what you earn.
How much does Grubhub pay? It doesn't really matter that much. Because if they don't pay well enough, you pick someone who will. Or maybe the latest offer wasn't so great but the next one will be. In the meantime there's a great Doordash offer that will keep you going.
Be the boss. Look at Grubhub as your customer. Think of the others as the same thing. Take on the attitude that it's up to you and not Grubhub.
Because ultimately, it's not up to Grubhub how much Grubhub drivers get paid.
It's up to you.
You know… your boss.