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Is Delivering for Postmates Worth It? – Review

At a Glance
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4.1 / 5
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Postmates

  • Key Features: Rapid payouts with Instant Deposit; prepaid debit card and delivery bags at no additional charge; fair compensation for longer deliveries
  • Advantages: No car necessary for delivery professionals; above-average pay compared with other contractor-based delivery services; higher earnings during Blitz Pricing; distance-based delivery fees
  • Disadvantages: Not available in all markets; no employee protections for couriers; potential for high overhead costs, especially for couriers with cars

Postmates is a popular local delivery app with a dense network of local merchants, many of which are small, independently owned businesses. These include restaurants, grocery stores, drugstores, liquor stores, and general-purpose retailers. Operating in more than 100 metropolitan areas around the United States, Postmates is powered by a growing army of relatively well-compensated independent contractors – also called Postmates – capable of delivering most products an hour or less after they’re ordered.

If you’re looking to monetize your spare time by tapping into the gig economy, Postmates is a great way to earn some extra cash. All you need is a car, bike, or scooter and a willingness to out-hustle your fellow Postmates. According to the company, Postmates workers can earn $25 per hour or more in some markets at periods of peak demand.

Postmates doesn’t have a lock on the local delivery market, of course. Opportunities to earn money by delivering everyday goods abound, thanks to:

Intrigued by the prospect of earning extra income with Postmates? Read on to learn what to expect from the platform, what to watch out for, and how to maximize your earning potential.

How It Works for Postmates

If you’re willing to brave traffic, the elements, and the myriad pitfalls of the service industry, working as a Postmate is a great way to earn extra income outside of your day job, help pay the bills as you work toward a degree, or simply to fill the gaps between full-time positions.

As a Postmate, you’re classified as an independent contractor and aren’t entitled to a minimum wage or other protections afforded full-time employees. But Postmates brags that individual Postmates can make $25 per hour or more. Though these results aren’t typical, they’re not bad for a job that doesn’t require a four-year college degree or even much on-the-job training.

Basic Eligibility Requirements

To make it through the initial round of the delivery agent application process, applicants need to meet some basic eligibility requirements:

  • Live in or near a Postmates market, though a Postmate can work in any of the company’s active markets once admitted to the app
  • Be at least 18 years old
  • Be a U.S. citizen or permanent resident
  • Own a functional bike, car, truck, scooter, or motorcycle, with valid vehicle insurance if required (Postmates also provides liability insurance up to $1 million per incident for each Postmate, at no cost to the worker)
  • Have a valid driver’s license, even if you’re only delivering by bike

Postmate applicants often have previous delivery experience. That could mean they’ve worked directly for a restaurant, delivered for a logistics company like UPS or FedEx, or picked up hours with direct competitors like Instacart or Grubhub. But it isn’t a prerequisite.

Application and Hiring Process

Postmates’ initial application takes just a few minutes. You need to enter some basic biographical and contact information, including your full name, address, vehicle type, and the make and model of your mobile device. You also need to provide your driver’s license number, Social Security number, and consent to a background check and driving history check (for Postmates with motor vehicles). Postmates doesn’t divulge what it looks for with these checks, but it’s safe to assume a recent felony conviction or pattern of vehicle accidents would be grounds for disqualification.

If you pass your background check, you’ll need to upload a profile photo and then wait for your Postmates delivery bag and prepaid debit card to arrive in the mail. You’ll pay for most pickups with this card. Once your card arrives, you’ll need to complete some final tasks and sign into the Postmates Fleet app for the first time.

Scheduling and Making Deliveries

If you’re approved to work as a Postmate, you can get to work right away. Whenever you want to make deliveries, simply indicate that you’re available in the app. When you open the app, you’ll see whether Blitz Pricing is in effect in your area (more on that below).

The delivery process is straightforward. For each accepted delivery, you’re shown the order’s complete contents and told where to pick it up. In most cases, the merchant receives the order well before your arrival and has it ready for you as you walk in. However, it’s a good idea to call ahead to make sure this is the case and to check that the order is complete and correct once you arrive. Always ask for an itemized receipt from the merchant. It can come in handy if the customer disputes the accuracy of an order.

Under normal circumstances, you pay for pay-on-pickup orders with your Postmates debit card. Adding funds to this card is easy. If you find you’re out of funds when you arrive at the merchant, you should be able to execute a reload in a minute or two, with minimal impact on delivery timing.

For orders paid in advance, you simply confirm the order with the merchant and leave without exchanging any funds. You then take the goods to the customer, accept payment, and move on to the next delivery.

Payment

For each completed delivery, you’ll receive a payment broken down as follows:

  • A variable amount for each completed pickup
  • A variable amount for each completed dropoff
  • A variable amount (paid by the minute) for time spent waiting for the merchant to fill the order (if applicable)
  • A variable per-mile rate covering the distance between the pickup and dropoff locations
  • 100% of tips from the customer

Your entire account balance pays out via weekly direct deposits. Payments for activity during the prior Monday-to-Sunday period hit your linked account by midweek in most cases. If you need funds sooner, you can cash out to a linked bank account using Postmates’ Instant Deposit feature.

Note that while you’ll always receive 100% of customer tips, you won’t receive all the fees they customer pays. Postmates keeps a significant cut of customer-paid fees to cover its own expenses.

Postmates does its best to exclude cash-only merchants from its platform, but screening isn’t 100% accurate. If you find yourself at a cash-only business, you can notify Postmates support and pawn the transaction off on Postmates itself. You never have to pay for deliveries out of your own pocket and shouldn’t do so under any circumstances, no matter how much the merchant pressures you.


Advantages of Postmates

Postmates’ top advantages for drivers include no car necessary to work on the platform, attractive pay in busy periods, delivery fees proportional to distance, and demand pricing during busy periods.

1. No Car Necessary

If you’re an avid bike commuter, there’s a place for you at Postmates. The platform permits bike-only delivery agents in all of its markets, allowing people who don’t own cars to earn some extra cash. Other platforms, including TaskRabbit and Bite Squad, require you to have your own car or at least be comfortable with driving one.

2. Pay Can Be Attractive

Postmates brags that its delivery people can make $25 or more per hour, including tips. Though this isn’t guaranteed, and you probably shouldn’t expect to earn so much on your very first shift, your earning power is higher here than in most other service-industry jobs – and on many competing delivery platforms. For instance, Instacart shoppers earn about $14 per hour plus tips, according to Glassdoor.

3. Delivery Fees Rise With Delivery Distance

To account for higher out-of-pocket fuel costs and greater time investments, Postmates compensates delivery people more for longer deliveries, increasing the likelihood they’ll accept out-of-the-way jobs. Some competing platforms’ delivery fees are proportional to the size of the order, not the distance. That means drivers on long-distance deliveries must hope for higher tips, which aren’t always forthcoming.

4. Blitz Pricing Is an Additional Earning Incentive

Postmates’ Blitz Pricing feature offers a powerful incentive for idle Postmates, including those who haven’t signed up for shifts in advance, to get out on the streets. By jacking up delivery fees by 50% or more, Postmates ensures its workers are compensated fairly during rush periods when they have to work harder. It also increases the likelihood of faster delivery for customers, since there are more Postmates on the clock. TaskRabbit and some similar platforms don’t have demand pricing for delivery jobs.


Disadvantage of Postmates

Postmates’ disadvantages include workers’ independent contractor status, potentially high overhead for those with gas-powered vehicles, and limited availability in smaller cities and metro areas.

1. Postmates Are Independent Contractors

All Postmates work as independent contractors. They’re responsible for tracking their own tax liabilities, paying their own expenses (such as fuel and car insurance), and eating the opportunity cost of an illness or injury (Postmates doesn’t offer workers’ compensation, sick days, or paid time off). Postmates also don’t have much in the way of job security – they can be kicked off the app basically at will.

Pro tip: Since you’ll be running your own small business, it would be a good idea to use a cloud-based accounting platform like Freshbooks to track all your expenses. Then at tax time you can just hand everything over to your accountant or upload it into either TurboTax or H&R Block.

2. Overhead Can Eat Into Earnings

Postmates, particularly those with their own cars, deal with fairly high overhead costs that can eat into their earnings. They’re responsible for the cost of fuel, vehicle insurance, parking, and possibly other expenses. By contrast, Bite Squad and some regional grocery delivery services cover overhead costs, allowing workers to keep more of their pay and tips.

Pro tip: You can also rent cars from Hyrecar and use them for the sole purpose of driving for Postmates or similar services.

3. Not Viable in Many Locations

Postmates operates chiefly in larger cities and metro areas. If you’re out in the boonies, Postmates isn’t a viable extra-income option. Larger logistics firms, such as Amazon, and regional grocery delivery services often have a presence in rural areas. Still, they’re not guaranteed to pay as well or schedule workers as flexibly as Postmates.


Final Word

According to the Bureau of Labor Statistics, the median U.S. hourly wage paid by private employers was just a hair above $28 per hour as of early 2020. Many jobs that pay more than $25 per hour require a four-year (or longer) degree, union membership, or many years of workplace experience. Workers without these things, including millions of adults who string together multiple retail and food service jobs to support their families, often make far less – under $10 per hour, in many cases.

From this perspective, working as a Postmates courier is an attractive proposition, even if it’s not a full-time gig. All you need is a bike or car, a strong work ethic, and a willingness to move quickly when the job demands it. That’s less than many other sharing economy gigs require.

Have you ever delivered for Postmates? What did you like (or dislike) about it?

Verdict
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4.1 / 5
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Postmates

Postmates is a potentially lucrative extra income opportunity for people looking to monetize their spare time and personal vehicle (car or otherwise). With fair compensation for longer deliveries and demand-based pricing, it holds its own against direct competitors. But it’s not available everywhere, lacks basic employment protections, and doesn’t guarantee driver earnings.

Postmates is a legitimate way to earn extra income by delivering food, groceries, and other goods to customers in your hometown. With few employment protections and spotty availability, it’s not perfect, but it’s definitely worth adding to your collection of income-producing apps.

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Brian Martucci
Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Comments Disclosure: The below responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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