How much does Grubhub pay their independent contractors? What does the average Grubhub driver make? How do they stack up against other on demand delivery services 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?
How do they compare to actual delivery jobs? Or to any W2 employment? How can you compare?
Grubhub uses independent contractors. That means we're not Grubhub employees. That means Grubhub is not a job, but you're operating a business. There's no salary or hourly wage.
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 seven factors you need to consider when trying to figure out how much Grubhub drivers make:
- What does delivery pay really mean?
- How does Grubhub calculate base pay (their pay model)?
- Look at Grubhub incentives, bonuses and minimums
- How do customer tips fit in?
- How to calculate profit per hour.
- What are the ways you can improve profit per hour?
- How does Grubhub driver pay compare to other food delivery services?
What does delivery pay really mean?
Contractors are compensated on a delivery by delivery basis. When you deliver for Grubhub, you are trading tasks (the delivery) for money.
That means there is no hourly wage or salary. Grubhub pay is simply the total amount of money received for the number of deliveries completed. Because there's a lot of variety in that, there's also a wide range in what someone can earn.
Like other food delivery services that use contractors, Grubhub doesn't assign deliveries to drivers. They offer delivery opportunities through the Grubhub driver app, and the driver has the option to accept or reject that offer. In that offer, Grubhub provides information about the delivery and what that 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.
Once you complete that delivery, you receive the offered amount.
To their credit, Grubhub doesn't play games hiding the tip amount like what Uber Eats and Doordash drivers experience. What you see is what you get.
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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). Some customers will still offer extra cash tips as well.
What you earn depends on how many deliveries you complete and how much pay you receive for those deliveries. The 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 doesn't provide specific information about the formula for any given area.
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.
The summary doesn't tell how many minutes were used to calculate pay, so it's almost impossible to calculate the per minute rate. In my experience, the 13 cent per minute rate is probably not too far off.
In fact, there were 41 minutes between the first and last offers in the example above. The total delivery pay for the first two deliveries added up to $5.14, which at 13¢/minute equals 39.5 minutes. That's pretty consistent with that 13 cent rate.
Understand that Grubhub calculates the pay based on time and mileage ESTIMATES. They don't pay for real-time distance or duration. The good news is you know exactly what you get paid. The bad news is you get no extra pay for longer than expected deliveries.
Overall, my observation has been that Grubhub has been pretty consistent with calculating a base pay based on time and distance.
Grubhub Bonus, incentive and minimum pay
The delivery fee we just talked about is their base pay. Sometimes Grubhub adds a bonus or an incentive to encourage drivers to accept offers.
If you notice the last delivery on the screenshot in the last section, there was a $1 bonus. Grubhub doesn't say what that was for.
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 don't think there's a consistent pattern in how they choose to list that pay.
Grubhub's increased (and decreased) minimum pay.
When things were especially busy during the pandemic lockdowns of 2020, suddenly Grubhub delivery offers never dropped below $9. They never really announced a minimum pay amount, they just started doing it.
It was something Grubhub had to do to make sure all orders were fulfilled. But they never actually changed their pay model.
I think this created some confusion. Newer drivers were under the impression Grubhub always had a $9 minimum. However, all that was happening was Grubhub was supplementing delivery pay customers didn't tip or 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 in an extra $5 to add to the $4 base so that you received that $9 minimum. That $5 might show up as “bonus pay” or it might be added to the “delivery pay,” it was never consistent.
As deliveriess slowed down when restrictions eased up, Grubhub began easing off of that $9 minimum. Many drivers thought Grubhub was cutting pay. Instead, Grubhub just no longer needed to pay so much extra 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. Doordash would pay more if their $1 base plus tip didn't meet the $5.50 minimum. The problem with supplemental pay like this is that a customer's tip often doesn't mean you'll get paid more.
People just don't complain as much when the minimum payout is $9 compared to $5.50.
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 select markets. This is not a minimum wage and not even an hourly rate. The attached strings mean that many times you still don't get that 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 hour minimum, 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 minimum pay on hours scheduled, not what you actually worked. Here's the weird part: you could work several extra unscheduled hours. Grubhub will count the money you made in their formula but not the hours.
Say you scheduled four hours, made no money, and have a $12/hour minimum in your specific area. Grubhub says you should have earned at least $48 and will pay you the extra money.
But now say you worked six extra hours unscheduled, and make $60. Grubhub still says you should make $48 minimum, and then they see that you made $60 for the day. They pay no extra money.
You worked ten hours. You averaged $6 per hour. Grubhub's minimum is $12 per hour, but they still don't pay anything.
And oh, by the way, if you reject orders while unscheduled? That goes against the acceptance rate and disqualifies you.
Let's say 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. Grubhub sends another offer to your phone, but you're not paying attention because you were done with your shift. The order times out. Even though it happened when you weren't scheduled, Grubhub counts that against you.
Now all of a sudden, you're not getting ANY pay for those four hours. That to me is a little different than a $12 hourly pay.
The Grubhub compensation thing is a sham because of how they do this. The moral of the story? Never rely on the Grubhub minimum.
Sometimes Grubhub will offer a bonus for completing a certain number of deliveries, however you have to maintain a high acceptance rate. to qualify.
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.
Special incentives like this are typically announced several days in advance.
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.
California has an extra piece in the puzzle. Proposition 22 requires gig companies to pay a minimum of 120% of minimum wage (for active time on deliveries) plus thirty cents a mile driven.
And here's the thing: That's the Grubhub pay. Tips cannot change what they pay. In other words, it's that minimum PLUS tips.
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. It's also based on the total active hours and miles for the week, meaning you could be below the minimum for one day but make up for it with earnings the rest of the week.
How much does tipping impact Grubhub pay?
Grubhub has typically been good at encouraging customers to tip. When I open up the mobile app to order, the order automatically includes a 20% tip. You have to change that tip amount if you want to pay less or not tip.
The entire tip the customer pays goes to the driver.
Sometimes customers will give a cash tip. In rare instances I've received a cash tip on top of what they gave through the Grubhub app. However, most times you'll only receive what was tipped through the app.
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. However, I can think of two times when they experimented with displaying only the base pay in my market. Both times it was only a few days before they were back to normal.
When Prop 22 passed, and Grubhub had to pay more in base pay, they added a surcharge for delvieries in California. To make it look like they weren't increasing fees, Grubhub started discouraging tips. The default order included no tip or only a dollar instead of their usual 20%.
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 and they've been better than the others at fully displaying what you will be paid.
Evaluating Grubhub earnings by looking at profit per hour
The important thing to remember here is that with Grubhub, you are an independent contractor. This means you're providing a service as a business instead of working as an employee.
That's why things like “salary information” in the screenshot are a real joke.
Indeed.com lost all credibility in my mind by posting that. There's no such thing as an average salary. There are no average food delivery driver wages because this is not a delivery job.
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.
When you deliver for Grubhub, you're not making as much as it seems. How much money you get from Grubhub and from tips is not the same thing as what you earn as a business.
Remember you are technically operating a business. That means you're on your own for your car expenses, which is probably a lot more than you realize thanks to extra costs related to wear, tear, maintenance and depreciation.
You can't compare the total pay you get from Grubhub to a salary. It's not the same thing. Self-employment and income 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.
In the gig economy, you're trading tasks for money. Those tasks take time. Therefore it makes sense to use a time measurement. I do this by calculating profit per hour as profit (pay minus expenses) divided by hours.
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.
For cost, I use 30¢ per mile. That's because that's what I calculated as the OVERALL cost of using my car. More driving = higher costs = 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).
$760 divided by 40 hours is my $19 profit per hour.
That's a number that's better for comparison. Now 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.
A lot of people fail to make that much. When you factor in the overall cost of using your car, even fewer do.
But it's not that you can't earn that much. I've often made much higher than that amount and I know many others who have as well.
That's the problem with simplistic statements about how much you can earn. There's too much variety in what people actually make. Some folks are barely making any profit at all while others are killing it. And you'll find both extemes in the same city.
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 your profits 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. 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 whether it makes sense.
The second most important thing you can do to increase earnings is the amount of time it takes to deliver. It could be the MOST important factor.
In my opinion, speed trumps dollar amount. You can make more doing several short, fast, moderate paying deliveries than you can with high paying trips that take a long time.
If a delivery takes up too much extra time, that can quickly sabotage your profitability.
Every year my profit per hour has gone up. My pay per delivery has been trending downward. How can those both be true?
Deliveries per hour continues to improve. More deliveries equal more pay.
Working the right places and times.
This is a different kind of decision making than when we talked about accepting orders.
Which pays more? In the suburbs or downtown? For me even though parking is a pain, downtown is better. Deliveries are quicker and I don't drive as far. Your area may be different.
You'll usually be better off 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. Weekends are usually far more profitable than Tuesdays.
Get to know when and where works, and you'll make a huge difference in what you earn.
How does Grubhub pay compare to other delivery companies?
I don't think there's a universal answer to that question.
Some will say the Grubhub driver gig pays more there than with anyone else. Others will say just the opposite.
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.
Here's how I see it, based only on my own experience. This doesn't mean it's everyone's experience.
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 and bonuses, especially now that they're reducing their minimums. I've seen $10 plus bonuses per delivery offered by Uber Eats and Doordash (especially in bad weather) while Grubhub didn't do a thing.
Tipping is usually better on Grubhub, because they usually recommend a higher tip than the other food delivery apps.
Lately, my experience is that pay per delivery is usually higher on Grubhub than anyone else.
One big factor has moved Grubhub from the best paying app in my market to the worst:
Two things here:
One, they seem to have slowed down tremendously. I used to get nothing but back to back high paying offers from them. Now it's not uncommon to wait ten, twenty minutes or more for my next offer.
That means fewer deliveries.
The other issue is dispatching, and this too is a time factor. They tend to offer deliveries that go far longer than any of the others. My wait times at local restaurants are usually longer.
What this all means is, I usually can complete fewer deliveries per hour on Grubhub.
Summary: How much do Grubhub drivers make compared to others?
There's no good answer to that.
In some cities, Grubhub is still the dominant delivery service. I'm sure in some places their dispatching is far better and they may pay the best. Other places, they're well below the rest.
There's so much variety between larger metro areas and smaller cities. That means you can't really pay attention to so called hourly earnings. There's a good chance that your location is very different than mine.
In the end, only you can tell who's the best. Pay attention to what works best for you.
The most important factor in how well Grubhub (or anyone else) 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.
The thing is, if you approach Grubhub, or any other platform, as though they are the gods of your ability to earn, you're going to limit yourself.
However, if you treat this like a business and make decisions on what's most profitable for you, you have more control over your earnings.
How much does Grubhub pay? It doesn't really matter that much. If they don't pay well enough, someone else will. Sometimes they'll have the best offer for you. Sometimes, not so much.
Be the boss. Look at Grubhub as your customer. When you do that, you begin to decide it's up to you, not them, how much you earn.
It's up to you.
You know… your boss.