Behind the Deliveries: An Analysis of Delivery Apps

I have been doing deliveries this summer (as have many of you) to make a little extra money. After doing it for a couple of weeks, I decided I should start logging not only the mileage (which you should definitely do for tax purposes) but many other things like time per delivery, tips vs. base pay, etc. After logging my data every day for about 3 months and using the magic of Google spreadsheets, I have found some really interesting things. More than that, I’ve learned a lot about how the world works.

First, let me explain my situation. I am a college student in the Washington DC area; many of the statistics will be drastically different based on where you drive and how much time you can spend driving. I was supposed to have an internship this summer but unfortunately, that fell through due to COVID, so I had way too much time on my hands. I needed to find something to spend my time doing, and you can only play MLB the Show for so many hours in a day. Instead of finding a different internship that might look better on my resume, I chose the path of making money on my own. But since I will be going back to school in a week, the days of spending lunch and dinner time driving around the city bringing other people their food will unfortunately come to an end.

Before doing this experience I had an extremely specific stance on using delivery apps. To me, they were a huge waste of money. I don’t think I could have provided a valid time where I would have ever considered using a delivery app to get my food. I haven’t even had pizza delivered to my house ever since I got my license. To quote a wise man, Dwight K. Shrute, “Why tips someone for a job I am capable of doing myself?” And to even further corroborate his logic, if I ever have to get my Kidney stones pulverized, I will be quick to provide a hefty tip.

Honestly, even after seeing what it is like from the other side of this market, the labor supply side, my opinion has not really changed much. If anything, I am now an even firmer believer that using the apps is a waste of both your time and money. It is never clearer than when I get the occasional order from a restaurant that I could see from the house I delivered the food to, or when I get an order from Mcdonald’s when I have personally been to three McDonald’s locations that were closer than the one they ordered from. Some people are idiots, but hey, they are idiots who pay me money, so I don’t say a word.

It came as no surprise to me how quickly the delivery industry grew to the level it is now. Think about many of the largest growing markets in the past decade or so. Social media has grown because people are too lazy to interact with people in person. Uber and Lyft have grown because people are too lazy to get where they want on their own. So naturally, there is a huge market for an app that engages people too lazy to pick up their own food. In my opinion, any app that takes advantage of humanity’s laziness is bound to succeed. The crazy part, however, is that I myself am extremely lazy. I will not wake up any earlier than I have to, I turn in every assignment minutes before it is due, and a perfect day for me involves not having to leave my room. Yet for some reason, I will never feel so lazy that I cannot walk the five minutes or so to pick up my own food, even when I move back up to Michigan and have to deal with sub-zero temperatures and consistently disgusting weather conditions.

The largest counterpoint to my argument on using these apps, which I also only discovered after having delivered as many orders as I did, is that there are a few circumstances that I now consider valid logic for having your food brought to your doorstep. The most obvious being that we are in the middle of a pandemic, that even leaving your house or apartment building provides an added risk to not only yourself but to anyone you interact with (totally off-topic, but self-isolation during a pandemic is a huge positive externality, for all my economics nerds out there). There were a few other situations that I felt did in fact warrant the use of delivery apps, such as having a newborn baby, old age, or even that there are not many restaurants in your area, which unfortunately is a whole different problem in parts of DC. I do not, however, consider laziness or convenience valid reasoning to have someone else deliver your food. Pick it up yourself, you lazy asshole! That was my rant aspect of this post, moving on.

The three apps I used were Doordash, Postmates, and Caviar. You may be wondering why I never tried Grubhub, Uber Eats, or any of the seemingly endless other programs offered. The answer is simply that they never accepted me. Grubhub never moved me past the initial application process, and Uber Eats kept rejecting some of my paperwork with which I still to this day have not found an issue. Once I really started getting into the three apps I used, I did not feel it was necessary to begin using a fourth app. I didn’t start Caviar until mid-July, so my data for them isn’t as strong as the other two. And since Caviar is now finally merging with Doordash, the data for the separate apps don’t mean as much anymore. Also, I would be happy to share my spreadsheet with all the formulas in it with you if you are interested, I just didn’t feel super comfortable posting the full one here with all my earnings and such. Anyways, here’s what I have found:

As you can see above, I have broken down each app by 6 rates, using my inputted data for the number of deliveries, base pay, pay from tips, time, and distance. The green numbers indicate the best app for the category. Even though I have the least amount of data for Caviar (57.9% of my deliveries were Doordash, 35.3% were Postmates, and only 6.8% were Caviar), they seemed to pay the best both in terms of hourly wage and wage per delivery. I think this is due to the huge tip percentage, a direct result of the market Caviar provides (at least in my area). In fact, Caviar was the best app in every category nearly every week for me except for the number of deliveries per hour. This makes sense to me given that the market share for Caviar is significantly lower than that of Doordash or even Postmates, yet with so many drivers using multiple apps at once the supply of drivers is not any lower. Also, the tip percentage was calculated as a comparison between base pay and tip pay (a tip percentage of 100% means the base pay was equal to the tip pay). Ideally I would have been able to compare the tip pay to the total order amount, but because I am not always given the order cost I could not do that. Additionally, I have no control over the cost of the order, so I did not feel it was as important to track.

The largest error I had in this data was in the distance data. When I first began doing deliveries, rather than using Stride–a popular mile tracking app among delivery drivers–I had been estimating the mileage myself using the general area of the pickup and dropoff locations. After I started learning more about the delivery business as a whole I decided that using a mileage tracker app is a huge improvement to my previous method of guessing about how far it was. Those first three weeks, however, drastically changed my data, so I instead adjusted the distance data so that the total average for Doordash was equal to the average distance per delivery of all of the Doordash deliveries I did after switching to Stride. It is just a coincidence that is almost exactly the same as the average for Postmates deliveries.

Moving on to the second image, this graph displays my hourly income, the one stat I was most interested in comparing, for each app broken down by week. The most noticeable aspect is that all of the apps have a general upward trend in their curves, which leads me to my most important advice for anyone considering delivery driving. After a few weeks, you will start to learn many of the tips and tricks of driving yourself, just with the experience you have gained. As you drive more and more, you will learn when the best time to drive is, which orders are worth it to accept versus the many that are not, and even where the best locations are to earn a bit more money.

Given that I stayed only in DC and its surrounding areas (Bethesda, Arlington, Alexandria), where the cost of living is slightly higher than it is in many other areas around the country, that is the primary explanation in my opinion as to the rather high hourly wages. When I started driving I assumed I would consistently make around $15-$20 per hour, and I would have been satisfied with that. I quickly learned many of the small tricks to maximize efficiency while delivering, and that is when I really started to make some money. The first time I made over $40 an hour for an entire evening shift, I thought to myself “is it this easy to make money?” And in a sense, it is. Delivering food is a market that will always be busy, and if you know what you are doing and can do it better than most other people, then yes, you do deserve to be making a fair amount of money.

The one thing I really did not account for in my spreadsheet was the costs involved in driving. First, there’s obviously the gas. While doing deliveries I drove a 2018 Hyundai Elantra, which is surely not the best option in terms of gas mileage, but it definitely did its job. I would say on average I had to fill up the car every 8–10 days, and this included using the car for any other purpose such as going to the store or meeting up with friends. Considering that the cost of one tank of gas was less than my hourly wage, I was willing to continue doing it. I also was unable to correctly input the depreciation on the car as a result of the extra hundreds of miles I added to the odometer, but given that the car was not too expensive when we bought it, I am sure that this had little effect as well.

The last aspect I noticed about this whole process, or moreover what I presume to be true about the delivery market, is that if I tried to do this again, let’s say, next year, I surely would not be as successful. That was one of the main reasons I was willing to try it out this summer specifically in the first place. People are being told to stay home, but they still need food. I am fortunate that I am at low risk given my age and health, but I still took every precaution to make sure I did not infect my family, friends, or anyone else I interacted with. And for the most part, many of the restaurants were extremely cooperative in following health protocols. From the restaurant side, they relied on us as drivers to stay in business, so they were willing to go through hoops to keep us safe, healthy, and in good spirits while delivering their meals.

While talking to a few restaurant workers while waiting for orders, I learned that many of the restaurants previously did not like the growing market of delivery apps. Deliveries brought another challenge to the already nightmare-ish restaurant industry. Add on the absurd percentage cuts that the delivery companies like Doordash and Postmates take from you as a part of giving you this new opportunity, and I immediately understand where the animosity came from. I am just grateful they never took out their anger on me while driving.

I learned so much this summer, not by having an internship that gave me endless connections or by taking online summer classes as I did last year. I learned a lot about how our society works, how it has handled itself in the midst of the largest health crisis in the last century, how people usually tend to help other people in times of need. And learning all of that has made this summer priceless.

Please let me know if you have any questions, comments, suggestions, writing tips. I am new to the blog game and anything is greatly appreciated. Also, if you are interested in starting to drive for a delivery company, please reach out and I can give you some tips on how to make more money. Thanks for reading!