The on-demand food delivery market is steadily growing and innovating, much like its rideshare cousin. While the jury is still out on who is the dominant rideshare giant, many freelancers, students, side-hustlers, and everyone in between have turned to these non-traditional job opportunities to support themselves. Like the rideshare economy, on-demand food delivery service jobs allow individuals to set their own hours, work at their own pace, and make a living as an independent contractor.
But what does that mean for the more traditional industries? Restaurants owners are still expected to deliver food. Tech companies are still designing products for purchase that must run efficiently, while balancing the growing, ever-evolving needs of their clients. And at the end of the day, everybody still has to gather their W2s and pay taxes.
I sought out to create a fact-based analysis of Postmates, Doordash, Grubhub, and UberEATS, four of the most popular food ordering apps for restaurants. This is meant to serve as a guide for those in the foodservice industry, freelancing community, app design community, and anyone else interested in the human element in one of the many sectors in the on-demand economy. As a reminder, this is not a contest—merely an unbiased comparison so those parties interested can choose the right service, part-time employer, or management tool best for them and their needs.
From your restaurant to the dinner table, how does it work?
Regardless of which food ordering app you use or drive for, they all accomplish the same goal: food from point A arrives at point B with the same quality you’d expect if it were ordered and eaten all in one place. Of course, the logistics behind getting food from A to B varies depend on the service used. When starting a food delivery business, you might want to consider your company’s budget and scope before choosing one of these services.
Drivers are given a corporate debit card to pay for meals on customers’ behalf. For most drivers, the debit card is Postmates-branded and given a unique alphanumeric ID number. More active drivers are assigned cards with their actual name. These cards are used for larger orders non-specific to food deliveries, such as a pick-up and delivery from the Apple Store.
The Postmates debit card is preloaded to a rounded number higher than the actual cost of a customer’s order. For example, according to an online Postmates resource, if a customer’s order comes out to $27.99, the Postmates card will be preloaded with $40. The corporate card gives them drivers a feeling of flexibility and allows them to place orders before arriving at a restaurant. Additionally, if the prices at a restaurant are vastly different than in the app, or the customer requests more items be added to an order, drivers can request more funds through the Postmates app. Extra funds will be preloaded onto the card, and drivers can continue to make requests for more if needed.
At one point, Postmates restricted debit card usage based on the GPS location of the driver to control abuse and fraud. However, restrictions were quickly rolled back when GPS locations were slow to update or otherwise inaccurate, causing more issues than they solved. Customers may also place orders on their own, which are then sent via tablet to partner restaurants and assigned to drivers. Previously, this system would show drivers an ETA for food preparation, which allowed time-savvy drivers to do some ridesharing in between food deliveries. Unfortunately, that feature has since been removed.
Restaurants owners may also use a third-party API to make use of Postmates drivers for delivery orders. In this format, customers aren’t always aware that drivers are independent contractors and not employees of the restaurant they’re ordering from. Drivers have reported that some customers are frustrated after they realize their tip is going to the restaurant and not the driver.
UberEATS uses a fairly simple format. Orders are always prepaid and pre-made long before a driver arrives—in theory, at least.
In actuality, UberEATS works by allowing customers to place an order through the app to be picked up by a driver. Even though the order should be prepared and good to go upon the driver’s arrival at a restaurant, that’s often not the case. Instead, drivers are forced to wait around while a meal’s still prepared. Though drivers must wait, it’s an attempt to guarantee customers receive hot, freshly-made food.
UberEATS also uses a “closed-bag” philosophy. Orders are not opened or inspected by drivers; meals are handed from the restaurant to the driver, then from the driver to the customer. Through this method, UberEATS absolves drivers of the responsibility to check that orders are correct and nothing’s been forgotten or missed.
Doordash works by pinging drivers with the location of a restaurant and destination, then calculates the distance between each point (including the driver’s current location). At the restaurant, the DoorDash driver will be presented with one of three situations:
- Pick up the food and go
- Pay for the order using the Doordash company card
- Place the order and wait until it’s ready
Grubhub isn’t strictly a delivery service, per se, though it has merged with and absorbed such services as Seamless and Yelp’s Eat24. Grubhub began in 2004 as an alternative to paper menus, which allowed the company to establish partnerships and build relationships with restaurants.
If a restaurant does not already have delivery drivers, they may make use of Grubhub’s fleet of independent contractors, similar to how Doordash, Postmates, and UberEATS work.
The idea is for drivers to arrive at a restaurant as food preparation is completed. Then, the food is placed in a branded and insulated bag and sent on its way to be delivered. Grubhub’s proprietary technology allows restaurants and customers to track the estimated delivery time for a meal.
Drivers may elect to schedule themselves in “blocks” of time, similar to a more traditional job. A block is essentially a guarantee that a driver’s available to pick up and deliver orders. Drivers may deliver outside of a block, but Grubhub prioritizes scheduled drivers and qualifies them for more work and higher earnings potential.
If a driver’s working outside of a block, any deliveries not assigned to other drivers will be up for grabs. Drivers may pick up and drop blocks as they see fit based on their Program Level.
If a restaurant does not already have delivery drivers, they may make use of Grubhub’s fleet of independent contractors.
Postmates, Doordash, Grubhub, and UberEATS: Earnings and Costs
In all cases, drivers are paid through direct deposit. No problems there—direct deposit is pretty standard across industries. Problems arise, however, in the timeliness of payments.
Postmates pays out to drivers four days after a transaction. If a customer tips some time after paying the initial fee, drivers may have tips paid out long after they’re paid for the original transaction. This wouldn’t be so bad if it weren’t for the 15 cent fee charged to drivers for each direct deposit transaction.
Almost every Postmates delivery driver I spoke to complained about this so-called “Stripe fee,” which soured the introduction of a daily payment feature. One driver, in particular, told me how he’ll frequently earn tips weeks after the initial delivery, only to be hit by a 15 cent fee on a tip of a buck or two. (It’s important to note that it is illegal for an employer to charge for direct deposit. The direct deposit fee doesn’t originate from Postmates itself, but from its payment processor.)
Grubhub pays its drivers weekly on Thursdays, Doordash on Sunday nights, and UberEATS pays on Thursdays. UberEATS also allows drivers to cash out up to five times per day, though there’s a one dollar fee associated with each cash-out. Doordash has an optional daily payment system, as well.
Here’s a Comparison of On-Demand Food Delivery Services
Customers must pay for Doordash, Postmates, Grubhub, and UberEATS through the respective app. Grubhub also accepts PayPal, Apple Pay, Android Pay, eGift cards, and cash. Of the services that pay drivers for mileage, mileage is calculated “as the bird flies.” Drivers are paid mileage based on a straight line from the restaurant to drop-off, which is often not an accurate measurement for how far they’ve actually driven (with all the twists, turns, and detours involved).
On-Demand Delivery Drivers: how to tip, how much to tip, and if cash is okay to use
Tips, on the other hand, are a whole separate ballgame. Tipping has long been a source of consternation for delivery drivers and customers alike, but tipping etiquette has largely remained the same—even if the method of delivery has evolved.
In general, it’s recommended for drivers to be tipped the higher of $5 or 20 percent if a customer’s experienced good service. Many of the drivers I spoke with claimed the majority of their take-home pay was thanks to tips they earned on their runs. UberEATS customers can tip drivers up to 30 days after a meal has been delivered, and drivers receive the full amount. One driver I spoke with estimated he received a tip roughly 5% of the time.
Postmates uses a totally cashless system and asks that drivers be tipped via the app. Customers are able to select one option from 10%, 15%, or 20%, or to enter a custom tip value. Although, some customers ignore the official tipping policy and still choose to tip drivers in cash. Postmates drivers seemed to independently agree on an estimated 60% to 75% tip rate. However, one frequent Postmate driver noticed a trend of declining tips—and was even stiffed after delivering to a Postmates customer service center.
Postmates drivers seemed to independently agree on an estimated 60% to 75% tip rate.
Tipping on Grubhub is done via the app, though drivers have a couple of complaints about the “tip in cash” option. Some customers will choose the option, only to stiff the driver upon delivery.
Doordash asks for customers to tip before their food has arrived. The app then presents drivers with a “guaranteed amount” of earnings that includes mileage, base pay, and “some” tips. Doordashers will often check the app after a delivery to find they’ve made an amount over the guarantee. When asked why this might be, one Doordasher mused it’s a way to prevent drivers from accepting only lucrative deliveries.
Whereas Postmates itemizes each tip received, tips earned through Doordash are a bit of a “mystery,” according to one driver I spoke with. He believes tips function in a way similar to how front-of-the-house wait-staff earn tips. If you’re stiffed, he claims, Doordash will make up the difference to maintain a minimum pay. On the flip side, if you receive a large tip, Doordash will let it cover the bulk of your payment for delivery.
What to consider when making a choice for your business
Drivers seem to consider Postmates the most unique service compared to UberEATS, Grubhub, and Doordash. They cite its corporate debit card as the biggest differentiator and feel that Postmates uses it as leverage versus its competitors.
From a driver’s perspective, Doordash seems to intend for no delivery to “ever be truly bad,” as one driver told me. It’s assumed that Doordash is adamant about drivers earning a respectable minimum fee per delivery so that each delivery is worth the driver’s time and they’re not reliant on customer tips.
UberEATS is fairly synchronized with the larger-scale ridesharing aspect of the company. This makes it easy for Uber drivers to break up a day of dealing with passengers to continue earning money via delivery of another kind.
Grubhub was still king of market share as of summer 2017, but other services aren’t far behind. Still, Grubhub can use its market share to further leverage partnerships with other services and brands, as it did with Yelp’s Eat24 and Groupon.
For smaller companies, choosing DoorDash might be a better way to go as awareness and positive association with your food or products continues to grow, as they provide a high quality of service for both the customers and drivers. For larger companies, that corporate card won’t be such a heavy burden.
The Nitty-Gritty: is On Demand Delivery Legit?
Each service is more than capable of delivering food from a restaurant to your door. What’s often most important to drivers and customers alike are the features and innovations that make similar services stand out from one another.
Independent Contractor Benefits
Recently, Grubhub recently won a lawsuit defining its drivers as contractors, which could have an impact on Uber’s similar litigation. As such, drivers aren’t entitled to benefits or perks they may otherwise have in traditional employment, such as health insurance or a 401K. However, that doesn’t mean these companies leaves drivers high and dry.
UberEATS rewards drivers with fuel, phone plan discounts, assistance with finding health insurance, and managing their finances. There are even specialized perks for various markets, such as in Austin, Texas. As with the rideshare aspect of Uber, delivery drivers are also covered by Uber’s insurance policy (though may be responsible for purchasing their own commercial insurance policy, in addition to required personal car insurance).
Doordash, however, offers commercial insurance to its delivery drivers, but also requires drivers to maintain personal policies. Like UberEATS, Doordash has partnered with Stride to help drivers purchase health insurance. Doordash has also partnered with Everlance to help drivers track their expenses in preparation for tax season— which is especially important considering drivers are classified as independent contractors.
Postmates rewards drivers with discounts and a subscription to Postmates Unlimited after completing 10 and 25 deliveries per month, respectively. There is also a supplemental insurance policy in place for drivers.
Coupon Codes, Discounts, and Rewards for Customers
For new customers, UberEATS rewards are generally in the form of $X off your first order. Promotions may also be held for a free product from participating partners. Drivers may also refer friends to earn bonuses after a referral driver has completed a designated number of trips.
Online community-run forums and subreddits are often the best places to go for Postmates promo codes. Promo codes are often most ubiquitous during large events where people stay at home to watch, such as the Superbowl and awards shows. Postmates also offers a free trial period of Postmates Unlimited. Doordash has a referral program similar to UberEATS, where both the Dasher and referred friend will earn bonuses.
Online community-run forums and subreddits are often the best places to go for Postmates promo codes.
Drink and Dash! Can You Order Alcohol With Postmates, Doordash, Grubhub, or UberEATS?
Some meals can only be truly enjoyed with a complimentary wine or beer, but not all services will deliver alcohol. Grubhub, Postmates, and Doordash all deliver alcohol to certain US markets. UberEATS currently allows alcohol orders in a handful of international locations.
Doordash has a process in place for ordering and delivering alcohol. It requires drivers to verify a customer’s ID and refuse delivery of alcohol to certain locations. Drivers are also not allowed to deliver alcohol to customers who are visibly intoxicated or likely to provide the alcohol to minors.
Postmates operates similarly when it comes to delivering alcohol to a customer. Since Postmates delivers more than just food, there’s a list of item restrictions that customers can’t order. Drugs and animals are obviously not allowed to be delivered, but customers are also prevented from ordering gift cards.
Form and Functionality of Apps and APIs
The customers and drivers I spoke to had mixed reactions about app design and functionality. All the pre-built apps work (or else the services wouldn’t), but their UIs and functionality feel unintuitive. All four services also allow customers to order food directly on responsive websites.
Drivers I spoke to complained of three main issues, regardless of app: a gradual pruning of useful features with each new update, glitches and bugs, and a general lack of effective support. Most drivers seem to agree: on-demand food delivery apps should have simple interfaces that aren’t constantly changing. It’s a matter of functionality over form.
Postmates has a seemingly simple interface, but drivers complain of its ubiquitous crashing and bugs. Drivers are forced to restart their phones multiple times before the app works, and it’s prone to crashing during busy days—most notably, the Superbowl.
The most frequent complaint told to me by Postmates drivers dealt with support issues. If a driver has an issue with an order, oftentimes the only solution is to cancel the order—which prevents drivers from earning money. Postmates support is largely nonexistent, according to drivers. Instead, they’re left fending for themselves and must come up with solutions on their own. On the flip side, customers appreciate the aesthetics of the app but claim it’s difficult to navigate.
Drivers lament the lack of information given on the Postmates app, as well. Cancellation reasons have been taken away (such as canceling because a restaurant is closed) and calling customers prior to accepting an order isn’t possible (to keep drivers from declining to deliver to certain parts of town). This has led to a situation where Postmates drivers “take orders blindly” which isn’t much of an issue for those delivering via car, but is a much bigger concern for bike, scooter, and walking couriers.
Uber Eats drivers use the Uber Partner app—except instead of picking up and dropping off passengers, it’s food. This works as can be expected (which is a testament to the tried-and-true Uber design). The only downsides to the Uber Partner app are restrictions placed on it, which brings difficulty to drivers. For instance, the app doesn’t show a destination for a meal prior to a driver arriving to the restaurant. This may, however, be intended to prevent drivers from picking and choosing only the best deliveries. Uber Eats customers must use an app separate from one they’d use for rides, but payments are made through the same Uber account. Customers may track their orders in real-time—a helpful feature to maintain positive consumer satisfaction.
Change may soon be coming for the Uber Eats app, considering its recent acquisition of startup Ando. Ando utilized 24 variables to calculate delivery time—technology which would be a great boon to Uber Eats.
Drivers find the Doordash app easy to use and understand, though it’s not without its bugs. Occasionally, a delivery will have to be marked as “delivered” multiple times before the app updates to reflect the change. While Doordash has an overseas support team in place to assist drivers, I’m told they’re of little help. This is due largely in part, drivers claim, to the “scripted” answers provided by support members. So when the app does malfunction or a driver runs into an issue, they’re left with little assistance in solving the issue.
Some of the drivers I spoke to attributed app issues to Doordash “growing very quickly—perhaps too quickly for its own good.”
The Results: No Clear Winner
I originally set out to compare the features of each service and their unique solutions for effectively delivering food from one place to another. During my research and writing, I sought to be careful not to favor one more than the other, or to write an article in which the services duked it out like a wrestling match.
In the end, it didn’t matter. Whether you’re a customer or driver, it seems as if your decision to use any one service will be based largely on experimentation and your subsequent experience, not on what’s offered by the service.
I’ll be curious to see how each service continues to improve, innovate, and stand out from its competitors. Over time, I have a feeling one or two on-demand food delivery services will eventually come out ahead or gobble up a competitor.
Your decision to use any one service will be based largely on experimentation and your subsequent experience, not on what’s offered by the service.
Methodology and Sources
In addition to gathering information and research right from the source (the services in question), I reached out to various community forums, including the Doordash, Uber Drivers, and Postmates subreddit communities. Responses I received to my questionnaire were invaluable and presented me with information that no amount of traditional research would have uncovered.