I received an exciting email from Postmates today. Starting tomorrow, January 8th, they’re going to start paying us couriers for the time we spent waiting at the merchant.
The email included the pay model and an example of how it works with Blitz Pricing (more on this later). This is a very transparent move by Postmates to improve the courier experience.
New Pay Model
Before this, Postmates compensated for only time and distance and I don’t know the formula they used to calculate the payout. But under the new model, couriers get paid for time, distance traveled, and $0.11 for each minute spent waiting at the merchant.
On a negative note, I was disappointed to see that couriers only get compensated for the distance between pickup and drop-off and does not include the distance traveled to the pickup location after accepting a job. This would increase job acceptance in my opinion since I often reject a job because the distance to the pick-up is so far.
But anyways, this new model adds another dimension to Postmates’ payout structure that Caviar doesn’t have in addition to in-app tipping.
Hopefully it will brings Postmates payout up to par with Caviar, which has been higher since I started driving back in the Fall. But I doubt it because from my experience, Caviar’s average payout is about $2 more per delivery than Postmates. For Postmates’ new model to beat Caviar, you’ll need to average about 18 minutes and 11 seconds ($2 divided by $0.11) of waiting time with each merchant. This would be a terrible experience for couriers and would add another reason for them to jump ship to Caviar.
Caviar and the restaurants they partner with have worked out estimated times for food preparation so there shouldn’t be long waiting times for the courier. In case there is, Caviar compensates couriers if they have to wait for more than a desirable number of minutes.
If you remember in my first week, $7 was added to my earning because of waiting time. You have to contact the Logistics Associates and notify them of long wait time and they’ll get the payment people to pay for it. Though, I’m not sure if every Logistics Associate does this for their courier. This is more a courtesy than a policy. Couriers don’t always get a bonus for wait time even if they inform their Logistics Associates. Personally, I don’t make a big deal of it anymore because it just feels like I’m telling on the restaurant to my boss.
I think the most significant thing about this new model is that it really stresses the importance of Blitz Pricing. If you remove the waiting time component and maintain the same base price and travel compensation, the example above of a 3 mile delivery would look like this:
Normal Pricing: $4.7
1.5 Blitz Pricing: $7.05
In other words, under a modest 1.5x Blitz Pricing, you make an additional $3.31 dollar for the same order due to the wait time compensation. This is more than enough to put Postmates’ payout on par with Caviar. But again, couriers have to deal with a rather long wait time. Or they can accept jobs under higher Blitz Pricing (1.75 or above). Personally, I wouldn’t want to wait 15-20 minutes at a merchant because I could be accepting jobs that could pay more than what the wait time is worth.
I’ll be keeping an eye on my earnings and will analyze how the new model impacts it, especially under Blitz Pricing conditions.
Please share your experience and thoughts on the new model in the comments. Let me know how it’s working for you!