Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

How does Postmates work

Postmates is a logistics and delivery company that connects couriers with people who need things delivered. It provides buyers with an easy to use mobile app that can be used to request a delivery from a particular store in their city.

It delivers goods using their courier networks which allowing people to order anything from anywhere within the city limits. With this uncommon business model, it has been able to get huge funding from investors and has helped the company establish a large user base.[i]

3 different types of segments are being served by Postmates and they are as follows[ii]

  • Merchants

It ties-up with local merchants and provides them with a platform with an opportunity to reach out to people who want goods delivered at their location. Merchants have to pay a percentage of the overall billing amount to Postmates for their delivery service. Postmates provide with the cheaper option than hiring own staff by merchants to make deliveries.[iii]

  • Customers

Postmates consider customers as who are willing to spend a little more than the exact price of an article in order to get it delivered at their doorstep. 

  • Delivery Persons

Delivery personals are the people who want to earn money by working according to their own schedule. These delivery personals are called Postmates. As per the business model, 20% of the delivery fee is kept by the company and delivery persons get the rest. As per Postmates, a delivery guy can earn up to $25 per hour.

Business Model of Postmates

  • Browse products and stores

People can use the smartphone app as well as a desktop application to browse stores and products and request an article at their doorstep.

  • Payment

After the payment order is said to be received at Postmates. All payments are handled by postmates.

  • Matching

After payment, the delivery guy who is stationed nearest to the store receives a notification regarding the order, as soon as an order gets confirmed. Within one hour the delivery guy shops and delivers the order at customer’s doorstep. Postmates deliver by car or by bike and all the orders are processed within the 1-hour time frame.

  • Tracking and Receiving Order

The customer is able to track the exact location of the postmatei.e delivery person who is on the way to deliver the order. An option to send a text to the customer in case of any delay can be exercised by the Postmate. It is on the wish of the customer to tip the delivery person. Postmates discourages tipping but a delivery person earns a tip on most of the orders. 

Revenue streams for Postmates

  • Convenience Fee

A flat convenience fee of 9% over each order is charged by the delivery guy. Customers willing to pay this convenience fee as it is more convenient to get goods at doorstep without spending fuel and time.[iv]

  • Delivery Fee

The company charges customers a small delivery fee for each order processed. The delivery fee normally starts from $5 but often there are specific ongoing offers where the company offers $3 or even lower delivery.

  • Merchant Programme

The company signs an official agreement with local stores with which it had tied up, under the merchant program. The purpose of this agreement is that the tied stores pay a certain percentage of the total bill to the company for their service.