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Is Postmates a Good Delivery Option for Independent Contractors?

In conjunction with the Deliver On Your Business podcast, I wanted to get a good look at each of the four prominent delivery providers. This week we will take a look at Postmates.

Postmates is a pioneer in delivery service, offering delivery before Uber, Doordash or Grubhub. They haven't kept up with the growth of the other major brands. Couriers seem to have a love hate relationship with Postmates, some being very loyal, others very critical.

Is Postmates a good delivery option? We'll take a look at some of the different aspects of delivering for Postmates. I'll give my own thoughts but ultimately, it depends on your market and your preferences.

London, United Kingdom – September 30, 2018: Screenshot of the mobile app Postmates – Food Delivery from Postmates Inc..

Looking at Postmates, Grubhub, Uber Eats and Doordash.

We will focus upcoming episodes in the Deliver on Your Business podcast on looking at each of the four major carriers. We'll try to stick to a similar format, so we'll ask the following questions:

  • How well do they pay?
  • How does their app work?
  • What are their deliveries like?
  • Do they respect the Independent Contractor relationship?
  • What is their support like?

How is the Pay for Postmates?

I do go into more detail on their pay model here. Postmates along with Uber Eats gets maybe the most criticism from drivers for not paying well. Honestly, I think this comes from a world of people who live on instant gratification. That's because when you complete a delivery for them, all you see is the delivery fee. The tip doesn't show up for 24 hours or later.

Base pay with Postmates

I will say that I think the delivery fee that comes FROM Postmates is better than a lot of carriers. Of the four major carriers, Postmates probably does the best compensating you for actual wait time, though it's still not much. Postmates pays a pickup fee, a droppoff fee, a wait fee and a per mile fee. Earlier this year, Postmates had TWO completely different pay rate changes, within a few weeks of each other. One thing they did was eliminate the minimum pay, which in my market had been $4. Overall I've calculated that it amounted to a 20% pay decrease. Prior to those cuts, I think they did have the best delivery fees of anyone.

Tipping with Postmates

Tips are a bit of a wildcard with Postmates. I found tipping to be the differentiator between them and Uber Eats, in that customers tipped more and that Postmates did better at actually encouraging the tips. However, customers do tip after the fact, and I think that works against drivers in that people are used to tipping when they pay, so going back after the fact to tip is counter intuitive. I've personally found though that tipping usually was pretty good. I think I do enjoy the fact that tipping is more dependent on your actual level of service, you know?

Incentives with Postmates

Postmates does offer some incentives from time to time to encourage drivers to get out during really busy periods. The main one that they will offer is a guaranteed amount for completing so many deliveries. For example, complete 8 deliveries in a particular four hour period and get guaranteed $60. People will confuse those with bonuses. A guarantee simple means that if you don't earn that guaranteed amount in those deliveries, they will make up the difference.

Once you add tips to the guaranteed amounts, I find the pay to be pretty good, however, I don't trust Postmates enough to really pay attention to these. Here's what I mean – I've had too many times where I'm close to completing the incentive, and the offers dry up, even though I know things are busy out there. I can't prove it, but it feels a lot like a bait and switch – they use it to get you out there but then intentionally hold back on offers so they don't have to pay out. I've seen a lot of drivers report similar things – and like I said I can't prove it but it's happened too often for me, where it's like fool me once.

There are times where Postmates will add a per order bonus, usually on an order by order basis. Sometimes they'll add a boost during really busy times where they'll add a multiplier to the delivery fee, like 1.25 or 1.5 (meaning a $4 delivery would now pay $5 at 1.25, etc). I've heard of some drivers that have received offers that a bonus would be added if so many deliveries are completed, but that seems to be more rare.

What about the Postmates app?

Information provided

Personally, I rank Postmates at third out of the four apps for information provided when a delivery offer comes up. When evaluating whether to take an offer, the more information provided, the better. One of the biggest criticisms is that you don't get a payout provided with the offer. I don't find that to be a major issue, and honestly, I think it's impossible for them to do so. They pay out based on real time information such as wait time at a restaurant. Tips come after the fact, so they don't even know what that amount will be. They do provide a map showing customer location and usually you can estimate based on that map. I will say with their latest update it's harder to see the details on the map.

I have two major complaints about the information they provide. One is they don't provide any customer details until after you pick up the food. This can be especially frustrating on multiple orders when it comes to trying to plan your way around them. The other complaint is that they don't tell you when offering a delivery if that is an order that you have to place.

The function of the app

I have never experienced an outage on the Postmates app. That's not to say it hasn't happened, but it doesn't seem to be an issue with them as much as some others. I have had some frustration at times where I get an offer, I accept or decline, and my phone continues to chirp with the notification sound. There have been a few times I've had to force stop the app. It's an irritation thing more than anything but I've found it to be fairly stable for the most part.

What are the deliveries like with Postmates?

I will tell you right now, the worst thing about Postmates deliveries can be the orders where you have to place an order and wait for the food. When time is money, this is a deal breaker for me. If a restaurant is fast food and there's not much of a wait, I'm okay with that. But the bottom line is, they don't pay enough for the wait time and rarely are the orders large enough that the potential tip is enough to make it worth the time. Waiting forty minutes for food to be prepared is just unacceptable.

Order efficiency

In their favor, my experience has been lately that on prepaid orders, Postmates orders are far more likely to be ready when I arrive to pick up. I am more confident that I can get in and out right away on Postmates orders than I am with anyone else – as long as it's not an ‘order and pay.' This alone can make them more profitable because the time to complete a delivery is just as important as the actual payout.

I find that dispatching is fair. There are a lot of ridiculous offers where there's no way I'm driving that far for a potential $3 payout, but that's going to be true on any computerized platform. I'll often get the same offer several times, and that gets irritating. But they can also be very good at giving me very quick and easy orders.

Multiple orders

Multiple orders on Postmates can be a blessing and a curse. My experience is that they tend to be pretty efficient in how they lay them out so you aren't going a lot of directions. The pay is not great, as they pretty well just pay time and distance from one spot to the next but if the tips are good, that can make up for it.

My biggest beef overall of anything right now with Postmates has to do with multiple orders – this gripes me even more than order and pay. You can arrive to pick up an order and suddenly get a notification that another order was added. You don't even get the opportunity to decline or accept, they just add it. This is a huge issue to me. You cannot unassign the second order either. The other issue on multiple orders is that you cannot set your own route. Now they did add functionality where you can better see on a map where the second or third orders are, but you can't change the order, and this can be a big issue.

Does Postmates Respect the Independent Contractor Relationship?

You may have heard me say this from time to time about all these gig companies – that they are scum for the way they use the independent contractor designation. Some are worse than others at it, and Postmates is maybe in the middle.

I think Postmates gives a lot more freedom in a lot of ways. They don't try to rope you into any schedules and they don't really put any pressure on about acceptance rate. They don't even display your acceptance rate anywhere, it's really a non issue with them. I hear rumors that sometimes they can slow offers down if you don't accept as many. and at times I wonder if things are slower on Postmates for me because the area is slow or if it's because my acceptance rate is low. Either way, I don't feel any pressure to accept a certain number of orders.

I see a couple problems where Postmates is concerned. The first is the stacking orders without giving you an opportunity to reject. That's a very clear and blatant violation of the independent contractor relationship, especially when cancelling orders can and often does lead to accounts being deactivated. Not giving you information about whether an offer is order and pay is also a problem, again tied to the cancellation issue.

How is Postmates Driver Support?

What support?

Seriously, this is in my experience one of the biggest problems with Postmates. If you have an issue with a delivery, there's really nowhere you can go. There is a number you can call but my understanding is it's really supposed to be a merchant support number (888-815-7726). The problem is that if there's an issue with an order, too often the only option has been to cancel. For the most part, you are on your own. Support is an issue with all the providers, but Postmates is the worst of them all.

Overall Impressions on Postmates

Personally, I see Postmates as an arrow in the quiver – meaning it's an option for me. On a delivery by delivery basis, the profit per hour that I get on Postmates is competitive if not slightly higher than with others. That actually surprised the heck out of me when I started tracking all that. They fit very nicely as a multi-app option, where I can sneak a short order in, and their higher efficiency in having orders ready works very well for that purpose. For me, if they were busier, they would be a better overall option.

Overall I have three very huge issues with Postmates: Order and pay is incredibly inefficient, their practice of adding orders to your route, and the lack of support. These would come together to prevent them from being a primary option in my opinion. That and the way they are structured lead me to cancel way too many orders to ever feel confident that I could continue to deliver for them, as high order cancellation is one of their biggest reasons for suspending driver accounts.

Is Postmates as bad as some people make them out to be? I don't think so. Here's the deal – they're all scum. They're all liars and thieves but they all present opportunities. In the end, you make your business decisions on what works best for you. I think they can be a better option than most people give them credit for if you are selective enough on your deliveries. Your market and your preferences are obviously going to be different than mine. I think overall, they are a good tool, a good option. Having options is good. I think the bottom line is, don't listen to the hype good or bad, give them a fair shot, learn the positives and work within them, beware of the negatives and they can add to your overall profitability.

Could this help someone else? Please share it.