NOVEMBER 2021 UPDATE: Postmates was acquired by Uber and shut down their “Fleet” app for drivers. Please see the Postmates alternatives below for more options to make money driving.
What’s it like to drive for Postmates?
Postmates is a popular app that uses couriers to deliver products to customers. It’s like Uber, but instead of moving people, they move products—including restaurant takeout orders, groceries, and some personal items.
If this sounds like fun to you, then driving for Postmates might just be the side hustle for you. Read on to learn more about how it works and whether or not it’s worth your time.
Postmates Driver Review
If you live in an area where Postmates is popular, making local deliveries is a viable way to earn extra money in your spare time. The average Postmates courier earns $19 an hour, but you may be able to improve that by maximizing your tips.
How Does the Postmates Service Work?
Customers can order from a range of things such as food, groceries, and personal items. Then they have those items in an hour.
It’s extremely convenient for the customers, who place orders from their computers or smartphones.
The company started in 2011 and is based out of San Francisco. According to the Postmates press and media page, they:
- have more than 800 employees
- serve 3,500 cities
- have more than 250,000 merchant partners
- complete 5 million deliveries per month
No question, they’re moving a serious amount of merchandise. Or more accurately, their courier fleet is — which you can be a part of to make extra money.
Would you like a side hustle delivering a bit of happiness to customers—taking them that delicious slice of cheesecake they’ve been craving all day, or the sushi they just haven’t had a chance to break away from work to go get themselves?
Where Is Postmates Available?
Postmates is available in seemingly every city and, as it grows, is making its way to towns. For example, it’s available in Chicago and Joliet, Illinois, but not yet in outlying areas.
The website states that the service is available “anytime, anyplace” … but the following screenshot shows that’s not yet true:
Still, when I looked up options, I was pleasantly surprised at all restaurants available for me to order from. Naturally, the bigger the city you live in, the more likely Postmates has a strong presence there.
How Does Postmates Make Money?
Postmates charges a delivery fee on every order, ranging from $.99 to $9.99. (Typically, the delivery fee is between $3.99 and $9.99.)
The company keeps 20% of the delivery fee, and the driver keeps 80%. Postmates also charges customers a 9% convenience fee on each order, which customers seem happy to pay.
The company has raised over $900 million(!!) from investors to build and market the app. While not yet profitable on the whole, Postmates says they are profitable on a per order basis in 90% of their markets.
How Can You Make Money with Postmates?
It’s free to sign up to be a courier with Postmates, and you earn money completing local deliveries. The best part is that you get paid instantly via direct deposit into your bank account.
That’s really convenient, and you know you will be paid in full and on time, unlike with some other situations, so that relieves some stress that contractors can feel surrounding payment.
Postmates Driver Interview
I sat down with Side Hustle Show listener Clay Franklin of Nashville, Tennessee, to learn about his experience driving for Postmates.
He made $350 making deliveries last month, but called the gig a bit of a “gamble.” You don’t know how much each order will earn you before you take it, and you rely heavily on tips.
Clay also shared:
- his inspiration for starting with Postmates (and other delivery apps)
- how to maximize your tips and earnings
- how the onboarding and delivery process works
- what sucks about the gig
- and more
How Much Do Postmates Drivers Make?
An average Postmates delivery fee is around $5. Of that, the driver makes 80%, or roughly $4.
On top of your share of the delivery fee, you also earn tips from customers.
In 2019, the average Postmates courier made around $19 an hour. Naturally, that means some drivers make more and others make less.
(I’ve seen Postmates ads advertising earning potential “up to $27 an hour.”)
It really depends on where you live, so make sure to do the research on your area before you sign up or make any changes to your schedule to accommodate this side hustle.
The other thing to consider here is certain times of day — like lunch and dinner — may be busier than others. While some drivers do Postmates “full-time,” I suspect they may have longer periods in between orders in the middle of the day.
Benefits for Postmates Delivery Drivers
Employment benefits is one area that freelancers and other contractors talk about and need to consider carefully. Some traditional jobs still provide benefits, but most contracting situations simply do not.
Postmates may be changing that landscape for its fleet of couriers.
Postmates has begun a Fleet Advisory Board that focuses on benefits for couriers, such as healthcare, safety, and career development. They say:
“We’re committed to empowering our workers and building a platform that works for them. That’s why we created the Fleet Advisory Board (FAB), whose feedback is shaping policies on health care, safety, inclusion, career development, finances, and economic opportunity. We’ve worked closely with fleet members to connect Postmates to free healthcare savings, provide tools to take the stress out of choosing health insurance, and develop options for immediate access to earnings. We’ve helped more than 3,600 Postmates sign up for health, dental, and vision coverage and save hundreds of dollars a month. More than 30,000 fleet members have … claimed more than $5 million in write-offs.”
Not many organizations can say things like that, and is actually a major point of differentiation between Postmates and other delivery apps.
Do Postmates Drivers Get Tips?
Yes! And that’s is a good thing because without tips, you probably wouldn’t even be making minimum wage. With tips, however, you can create a viable side hustle or even a full-time job for yourself.
In certain locations, Postmates drivers are earning up to $25 an hour.
As with any position that involves gratuities, customer service is the key to making good tips. Show up quickly with a smile on your face, and be polite. In a word, be professional.
Postmates Driver Requirements
To begin delivering for Postmates, you must meet the following requirements:
- Be 18 years of age or older.
- Have a valid driver’s license and an insured car (a bicycle is fine for more urban areas).
- Have a phone capable of running the Postmates app.
- Pass a background check.
All in all, it’s pretty easy to become a courier.
Sign Up / Onboarding Process
- Sign up.
- You’ll be prompted to fill in your name and a password.
- After you’ve created an account, they will send you an application. Fill it out.
- Then you have to authorize Postmates to do a background check.
- After that, you’ll set up direct deposit.
- Then it’s time to activate your Postmates card (a debit card to pay for food that the customers have not paid for before delivery).
- Once all this is said and done, you wait for further directions.
I did some poking around on various message boards, and the consensus is that the process is easy.
How to Maximize Postmates Earnings
There are many ways you can maximize your earning potential. By making sure you know your city, understanding peak hours, watching your costs, doing multiple deliveries at one time, and accepting tips, you can grow your earning potential.
Be on Time!
Happy customers tip more. They won’t be happy if you’re late. Make sure to schedule your stops so that all orders are on time.
Give Customers their Receipt
Even if they don’t ask for their receipt, give it to them anyway. Let them know that if they have any problems with their order, they’ll need the receipt to fix it. That goes a long way in making sure the customer knows that you care about them and their needs.
Showing that you’re looking out for them can help you earn more tips!
Do More to Make the Customer Smile!
Little things go a long way.
Keep a container in your car for things like ketchup and soy packets, sugar, salt, napkins, straws—anything you think they might need more of. Let them know you have these little bonus items, and ask if they need anything extra.
Keep the Customer in the Loop
A short text to let your customer know you are on your way helps them a lot.
If a mom can say, “Our burgers will be here in five minutes,” she’ll be happy and probably tip more.
Just please don’t text and drive! Do so when you’ve picked up their food.
Consider an “Eye in the Sky” App
Postmates drivers might consider adding Gridwise to your arsenal. Gridwise a cool app that helps rideshare and delivery drivers earn 39% more on average.
They do this through automatic mileage tracking, earnings comparisons across platforms, event and weather notifications, airport flight details, and more. These optimizations could mean hundreds of extra dollars a month.
What Sucks About Driving for Postmates?
Lack of Training
The one issue I see over and over again is that there is no real training on the app system for drivers. There was also no training built in on how to manage your time or how to line up your deliveries in a way that helps you get more deliveries done quicker.
In short, the couriers learn by trial and error. If you have trouble organizing your time and tasks, you probably won’t make very much money with Postmates.
You Don’t Know Your Delivery Destination Upfront
The other issue I found when poking around on gig-based message boards is that Postmates doesn’t tell you where the goods are supposed to be delivered until after you accept the gig. That means you have less information to help you decide which deliveries you want to accept.
Potential Lack of Demand
Something else to consider is your market. Simply put, do people in your area use Postmates?
If not, you’ll be left sitting and waiting, and since you get paid by the delivery, this can be a problem. Make sure to ask around to see if people in your area know about and use this service.
(If Postmates isn’t popular, but you still like the idea of doing a delivery side hustle, check out the list of alternatives below.)
Other Costs to Consider
When taking on this sort of work, you want to make sure what you earn will be worth the wear and tear on your car and any increased insurance costs. You’ll rack up miles quickly, and your policy may need to be changed.
You must make sure to keep your insurance current while driving for Postmates. Postmates does not insure their couriers’ cars.
It’s your car, and that responsibility falls on you. Be honest with your insurance company. According to insurance agent and expert Jake Lang, your rates may increase when you notify your insurance company that your vehicle has been put into service as a courier vehicle.
Under some policies, damage is not covered in the event of a collision or other incident involving your vehicle while it contains product or while it is being used for courier purposes. Keeping it secret isn’t advisable, and could be considered insurance fraud.
Gas and Vehicle Maintenance
- Postmates doesn’t pay for your gas, or maintenance on your car. All of this can get expensive.
- Make sure to use a fuel-efficient car.
- Make sure your car is in good working order.
You can, however, write off your mileage on your taxes. Per the IRS you can write off 57.5 cents per mile (2020 deduction rate) on your taxes. If you’re doing a lot of driving, it definitely adds up!
Pro Tip: Use a mileage tracking app like Hurdlr. Hurdlr automatically tracks your mileage, expenses, income streams, and tax deductions in real-time. On average, Hurdlr helps users find $5600 in deductions!
Remember, your car’s worth goes down as your rack up the miles.
As a Postmates courier, you’ll be considered an independent contractor. That means you’ll receive a 1099 form if you earn more than $600 per year from Postmates, and you’ll have to pay taxes on what you earn.
As a rule of thumb, set aside 25% of your earnings for income taxes. You may want to look into your state’s income tax laws as well. Depending on how much you earn, you may need to make quarterly tax payments.
Obviously, Postmates isn’t the only game in town when it comes to deliveries. In fact, one friend of mine recommended “stacking” several delivery apps to try and get orders going in the same direction to bump up his effective hourly rate.
Here are some Postmates alternatives to consider:
- DoorDash – According to Indeed, the average driver makes between $10 and $17 an hour*. Here’s our full DoorDash driver review.
- Instacart – Earn $14-18 an hour delivering groceries around town. Here’s our full Instacart shopper review, featuring one side hustler who brought in $10,000 doing this in his first 6 months.
- Uber Eats – The average driver makes around $10 an hour, though a friend of mine reported doing much better in this video.
- Shipt – This is a product delivery / shopping service owned by Target. Drivers can earn up to $22 an hour.
- GrubHub – The average driver made $12 an hour, according to Glassdoor.com.
- Amazon Flex – You can earn $18 to $25 an hour delivering Amazon orders, groceries, and restaurant food. Amazon Flex is a little different than the rest because you earn a fixed hourly rate and choose blocks of time to drive.
- PeaPod – With this grocery delivery service, you can earn $15.36 an hour (national average).
*For illustrative purposes only, actual earnings may differ and depend on expenses. Hourly pay is calculated using average Dasher payouts while on a delivery (from the time you accept an order until the time you drop it off) and includes compensation from peak pay, tips, and other incentives.
Other Alternatives to Consider
Of course, Postmates and other delivery apps aren’t the only way to make extra money. Here are some similarly time-flexible ideas.
Become a Mobile Notary – Loan signing agents have similar flexibility to Postmates drivers, but have higher earning power. Of course, there’s some upfront investment in education and equipment here.
Reselling on Amazon – Product flipping is nothing new, but this has the potential to be a little more time-leveraged down the road.
Become a Virtual Assistant – Many businesses need administrative help and don’t care if you work from home. Take inventory of your skills and go connect with potential customers.
Teaching English Online – Services like VIPkid connect you with students in China, and pay up to $20 an hour. This is one you can do from the comfort of your home, without the additional risks and costs, but there are a few more requirements to get started. And instead of doing deliveries in the evening, this usually takes place in the early morning hours because of the time zone differences.
Postmates Driver Review Summary: Pros and Cons
- It’s easy to onboard and begin driving.
- The qualifications are few.
- You get to set your own schedule.
- You have to rely on tips.
- There are additional vehicle-related costs.
- There is a lack of training for new drivers.
- Some markets are saturated with drivers, and some markets don’t use the service much.
Delivering for Postmates: Conclusion
If you work as a Postmates courier, you’ll need to keep in mind that the area you live and work in can make or break you in relation so this gig. This is a good side hustle for those who:
- Enjoy driving.
- Enjoy making people happy.
- Have a reliable, fuel-efficient car.
- Look to make money quickly.
- Have good customer service skills.
What do you think? Let me know your experience with Postmates in the comments below.
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