Ever had one of those times you decided to stay home, sit this one out, and then your phone starts blowing up.
Doordash is offering crazy Peak Pay, or Uber Eats has surges and quests, Grubhub and Instacart are offering bonuses out the wazoo.
When does it make sense to go out, and when are you just chasing the wind?
Understand why Doordash, Uber Eats, Instacart and Grubhub offer these promotions, peak pays, incentives and bonuses.
Let's get this straight right up front.
It has nothing to do with them taking care of us.
I recently heard from someone who was shocked that Doordash wasn't offering peak pay during a snow storm. He said they have in other recent storms, so why not now?
It's because it's not about paying extra. They don't pay these incentives as a bonus, or hazard pay. There is no holiday pay for going out on special days.
They pay as much, and as little, as they have to to get the deliveries taken care of.
If Doordash thinks they'll have enough drivers out there to handle the orders, even in a snowstorm, you won't see any peak pay. You will not see surges or boosts or quests from Uber Eats if there are already more drivers than what they need. Neither will you get any promotions or bonuses from Grubhub or Instacart simply because the weather's bad or from Instacart because they're being nice to you.
Incentives and promotions are all about getting drivers out there when they need them.
Doordash Peak Pay, Uber Eats quests and surges, Grubhub bonuses and Instacart incentives all are part of the whole independent contractor dynamic.
It's a lot cheaper for these gig companies to use independent contractors than to hire employees.
So much cheaper it was worth spending $220 million to campaign for Proposition 22 in California. It's a make or break kind of deal for these companies and their business models.
But here's the thing: they're hiring you to perform services as a business. When they do that, they forfeit the right to control you as they could an employee.
This creates a problem for them. There are times where they need more drivers out there to meet the demand.
The law prohibits them from requiring drivers to drive certain shifts or in certain areas, or to require you to accept a certain number of orders. They cannot force anyone to do any of these things, so they have to find other ways to meet the demand.
And this is why they offer these bonuses and incentives. This is the only reason. It's all about getting enough drivers out there to meet the demand.
Those extras may come in a variety of forms: They may offer so much extra per delivery. They may offer a minimum amount per delivery. Sometimes there are perks for meeting certain conditions or goals.
It's not to give you a bonus. It's to help them meet their needs at times when they cannot otherwise require you to go out there.
Understanding when Peak Pay, Surges, Bonuses and Incentives are worth it and when they lead to lower pay.
There are no guarantees with these incentives.
Many a courier has heeded the call from Doordash, Uber Eats, Grubhub, Instacart and other gigs, have gone out looking for profits, and….
Sometimes the bonuses are worth big money. Other times, the incentives worked too well and it's like every other driver in town is out there as well.
Many incentives and promotions have strings attached. You have to accept a certain percentage of orders. You have to work in certain regions. Or, you have to accept so many orders in a certain time frame.
Is it worth it? You have to weigh the pros and cons. Balance the incentives against the costs.
Is it achievable? How many times has Doordash or Uber Eats or Postmates offered bonuses for completing so many orders in a certain time frame, only to have the offers dry up when you're close to accomplishing it?
Do the strings attached cost more than what you gain?
Let's look at some of the pros and cons of different promotions and incentives offered by third party delivery companies.
Extra pay per delivery
Doordash peak pay and Uber Eats surges are maybe the best known examples.
Sometimes the platform will just say hey, we're giving you a dollar extra, twelve dollars extra, for every delivery you complete in a certain time frame.
A lot of these can be great when you actually get the deliveries. I've received as high as $12 extra per delivery with Doordash during bad weather at the peak of the pandemic.
Usually the worst part of these promotions is that they do tend to draw all of the other drivers out of the woodwork. With Doordash and their smaller delivery zones especially, they can create a vacuum in some zones by offer high peak pay in others.
The other thing to look for is if there are strings attached. Sometime back, Doordash attached an acceptance rate to the peak pay guarantees. In these peak situations often rejecting or missing just one offer could wipe out the entire additional earnings.
Ultimately you have to determine whether the extra amount outweighs the cost. Do you make enough more to compensate for the wait time? Understanding what your wait time is actually worth is a good way to measure that.
Grubhub once offered additional bonus money for each delivery, with a lot of strings attached. There was fine print, there were requirements for nearly a 100% acceptance rate. And a bit of deception.
I decided to give it a run that time, and it paid out okay. But it wasn't great. And one missed offer and I would have been screwed.
Challenges and Quests.
The Uber Eats Quest is the classic example. I've seen all the carriers pull out some form of this type of promotion over the years.
This type of incentive challenges you to complete so many orders within a certain time frame and get a particular bonus. It could be for a night, for a week or a whole month.
Uber Eats kicked off a series of Quests early last year in my market where you could choose your quest. There would be a three day period and choices often ranged from ten to sixty deliveries. It was actually one of the many things that they did early last year that made them a more viable option for doing deliveries.
In January 2021 Doordash offered one of the crazier options.
I love how they said this: “In an effort to make dashing the best gig out there, we're thrilled to launch a program that meaningfully rewards Dashers' achievements on the road.
That meaningful reward? Complete 450 deliveries in a 26 day period and earn a $200 reward.
If you're fast enough to pull of 2-1/2 deliveries per hour, that's 180 hours of deliveries – about 48 hours per week. All that for 44 cents extra per delivery.
These are the particular deliveries that you really have to ask yourself, can I pull it off? Is it realistic? Would they pull the rug out from under me when I get close?
Minimum pay guarantees.
Sometimes a platform will promise you will get a minimum of so much per order. If the customer doesn't tip well, they'll make up the difference.
Doordash's pay model between about 2017 and late 2019 falls into this category. They said their pay model was $1 plus tips, but if customers didn't tip well enough to meet their “minimum guarantee” that was offered with the delivery, Doordash would make up the difference.
Grubhub quietly slipped into this kind of pay model during the height of the pandemic related surge in business. They never really announced it, but all of a sudden the lowest offers from Grubhub in most markets were $9.00.
Uber Eats has slipped into this to a lesser degree, having introduced a trip supplement with their latest pay model, though that's not a consistent minimum pay program.
With minimum pay, the lowest of lowball offers go away. That helps a lot of drivers, making more deliveries acceptable.
This approach really backfired on Doordash. The problem is that the perception is that these companies are reducing the amount they pay out of their pockets when the tip is good. Many accused them of stealing tips.
There were rumblings of the same thing among Grubhub drivers, but the fact that the minimum was as much as nine dollars, and that previously pay was often as low as $3, made it look less nefarious in comparison.
One problem I did notice for Grubhub. When things started slowing down, they didn't need the higher minimums any longer. So they started dropping the minimum. A lot of drivers who joined during that period thought their pay was getting cut as they hadn't experienced the previous lower pay minimums.
Another form of incentives these companies use is program levels.
Grubhub started it all with their Premier/Pro/Partner level drivers. Eventually Doordash joined in with Top Dasher and Uber Eats offered their Uber Pro.
The main criteria for the Grubhub and Doordash programs is having a high acceptance rate. You need to accept 70% of offers for Doordash Top Dasher, and as much as 95% to get Grubhub Premier.
The biggest benefit for these two programs is access to scheduling. Grubhub allows Premier drivers first access to weekly scheduling blocks, while Doordash lets Top Dashers just go available any time any where.
They all throw a lot of things in to make it look more appealing. Most of those are throwaways. Grubhub used to promise access to their referral program even though they didn't have a referral program.
Uber Eats has a little more bland form of program. They have a point system, where you get points for each delivery you complete. Different point levels give you different perks.
The point of these program levels is to try to make higher acceptance rate more appealing. Is Top Dasher worth it? Does it make sense to go for Grubhub Premier?
The thing about program levels is the cost of qualifying can be greater than the reward. High acceptance rate often means low profitability. For some, they may find their market is hard enough to get available delivery slots that they'll make that trade.
How Do You Avoid Getting Burned by Promotions?
Promotions can be a great way to make some extra money. They can be quite profitable.
And they can also leave you making less than times when there are no promotions.
When is it worthwhile to pursue, and when are you only chasing the wind? Here are some tips to consider.
1. Read the offer carefully.
Grubhub is the worst at using bait and switch and deception in their promotions, in my opnion. They love to send out things like this:
They were promising additional pay of up to 15%.
They've done this frequently, where they'll offer additional pay of up to an amount. Up to in Grubhub's mind apparently means “yeah, it's not going to happen.”
Read the offer. Is it making a real promise? Or is it using wording that makes it look like a promise.
The promise needs to be specific. None of this “up to” garbage. There needs to be a specific promise that “you will get this much.” If it's not there, don't chase it.
2. Is it reasonably achievable?
The Doordash example above comes to mind. 450 deliveries in 26 days. It's not that that couldn't be accomplished – I've had as many as 480 deliveries in a month. But are you willing and able to put the work in.
Will you be pushing it to be able to pull it off? I learned early on not to trust Postmates with their promotions. They'd offer a bonus if you completed 8 deliveries in a 4 hour window. Postmates was slow enough in my market as it was. But if you were 1 delivery away from completing and there was a half hour or less left in the window, you could almost guarantee you won't get that 8th offer.
Part of the issue with some of these quests and multi-delivery bonuses is that everyone else is chasing those deliveries. I know things got very very slow the last couple days in my market because of all the drivers who were out there grinding to get the last deliveries in for the Doordash January offer.
3. Can it be taken away?
It's not that I don't trust these gig companies.
But…. I don't trust them.
When there are strings attached such as an acceptance rate, what are the odds something can take that offer away from you?
If you go out there and bust it to get a bonus completed by a certain time, then the app glitches and you miss an offer, have you worked for nothing now that you didn't meet the acceptance rate?
If there's an opportunity to lose out because you didn't get that last delivery done in time or you didn't make the acceptance rate, you have to evaluate whether it's worth it to deliver IF YOU NEVER RECEIVED THE BONUS. When there's a chance you won't get the bonus, assume you won't get it.
4. What's the cost?
Is the cost of pursuing greater than the gain?
When I pursued the Grubhub $4 promotion that I mentioned earlier, the cost of accepting everything was high.
I earned about $7 per hour less than I normally earned, all because I accepted every offer. I drove a lot further and was able to complete fewer deliveries.
Fortunately the promotion paid a bit more than $8 per hour extra. I did slightly better than average.
Are you forced out of your comfort zone? Are you in more dangerous situations such as bad roads?
Is the incentive drawing everyone else out? Are you now stuck waiting 20 minutes between orders because there's too many drivers?
These are things you have to weigh against the incentives and promotions being offered.
What's the big picture?
As you go along, you settle into a routine. You find things that work well for you.
Incentives and promotions are designed to get drivers out delivering in times and circumstances that might be outside their routine.
Incentives and promotions can be awesome at times. They can be a killer at others. If you are looking at everything, including the costs and the drawbacks, you'll do a better job evaluating if it's worth pursuing.