Research Proposal

Last Mile Delivery Pay Structures

Goals

Provide examples of last mile delivery service pay structures, especially those that incorporate tips for delivery drivers with a lower reduced hourly wage. Examples should focus on California.

Early Findings

  • Many companies in California that utilize last mile delivery gig workers, including UberEats, Postmates, DoorDash, Amazon Flex, GrubHub, Instacart and Target Corp's TGT.N Shipt, pay between $8-$19 per hour.
  • The basic pay structure is this: "Drivers who work for gig delivery companies choose “jobs” from company-supplied mobile apps. Pay is based on a variety of factors including travel distance, time and customer tips. Drivers are not reimbursed for the use of their cars, gasoline or other expenses."
  • For Postmates workers in San Francisco, workers are paid "$1.90 per pickup, $0.50 per drop-off, $0.07 per minute and $1.29 per mile." Postmates workers keep 100% of customer tips, and the amount of tips has no influence on overall rate of pay.
  • The legal driver agreement for Postmates can be found here.
  • Samuel Hale LLC is a staffing agency in California recently introduced a new last mile delivery staffing solution called Samuel Hale Last Mile Delivery (SHLMD).
  • While the Amazon Flex driver contract could not be found, Amazon describes their pay structure for drivers as: "When you see an offer, you will see the pick-up location, duration, and potential earnings. For programs with no tips, the amount you see in an offer is your guaranteed earnings: regardless of whether a block ends early or late, you will earn what you see in the offer. As an example, if you see $72 for a 4-hour block, Amazon’s contribution is $72, and that will be the amount you will earn. Amazon will always contribute at least $15-$19 per scheduled hour, depending on your location and demand. For deliveries that give customers the option to tip, you will see an earnings range. The range shows potential earnings based on tips received for similar blocks recently completed in your region. Most of these blocks earned tips within the range shown in your offer, and at least a quarter of delivery partners earned enough tips to reach the top of the range or exceed it. In the event that you do not have any deliveries during your block or do not receive tips from customers, your guaranteed earnings are the minimum that you were shown in the offer. If you do receive tips, 100% of tips are added to your minimum earnings. As an example, if you see $36-50 for a 2-hour block, Amazon’s contribution is $36. If you received no tips, your total earnings would be $36. If you received $5 in tips, your total earnings would be $41. If you received $20 in tips, your total earnings would be $56."
Prepared By
Alexis Z.
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