Winter 2015
In the winter of 2014, Postmates roared into town with the promise of being able to deliver virtually anything to anyone in the District within an hour. They charged a 10% purchase fee and a nominal delivery fee based on the distance of which 80% went to the couriers.
The app is commonly used for restaurant food but people have been known to purchase computers, groceries, you name it. The app works fairly well and the startup had received a hefty amount of funding to hire staff and rent office space.
But the idea of on-demand delivery is neither new nor novel. Both Seamless and GrubHub were already dominating the industry in D.C. Most people who pay the price of a good meal prefer to enjoy the atmosphere that comes with it. A $50 Prime Rib from Del Frisco’s Steakhouse somehow doesn’t taste the same on foam and plastic as it does on china and silverware.
So many of the food purchases are for franchises and fast food restaurants like Shake Shack, Chipotle, Potbelly, and McDonald’s — those with low prices and even smaller margins.
The app is popular with college students who may not have the best spending habits. But college students don’t tip and couriers could make as little as $5 an hour especially if they have to wait in line and make an order — like Vapiano during rush hour. And how long will college students continue to use the app, when their parents find out that their spending habits and cut back on allowances.
Jason Morenz had been delivering for Postmates since they arrived in D.C., and recommended I give it a try. Since I’m in the Restaurant food and customer relations business, I had to see it for myself. I signed up and attended the onboarding session. And just like that, I was hired — it was fast and easy. They didn’t even check to see if I knew the city, was in shape or I was really up to this task. As long as I didn’t have a criminal record, I was hired.
At first, it was fun. I got to see the city and visit new restaurants while getting a workout. The customers were nice but stingy on the tip, and there was definitely a lack of transparency on how much they tipped (since it was not readily known how much their tip was)
After completing 10 orders successfully, the company started sending me two orders at a time and that’s when it started becoming a burden. And even if you want to do one order at a time, Postmates will keep pushing it, along with the most deafening beep requiring you to accept or reject.
You almost want to accept a second order just to keep your phone from beeping. And you can’t turn the app off since you need to keep it on for directions to your customer.
And since Postmates have invested a lot of resources in marketing, they have way more orders than they have couriers. So if you are scheduled or if you check in for duty — you will be bombarded with orders — some of them very challenging to complete within an hour.
The orders that I regretted taking were for made-to-order restaurants like Vapiano that would not take orders over the phone. I had to travel to the location, wait in line for 30 minutes, order, pay, pick up the food, then travel to the customer. The entire job took over an hour but my fees plus tips amounted to less than the minimum wage of $10.50/hr.
The obvious goal was to avoid taking orders that were time-consuming, had low margins, or would take me away from the city hub. Orders for deliveries to the northern corner of D.C. such as Friendship Heights also meant not finding another order for miles. I could cancel the order. But this would come with a penalty and a negative rating.
Knowing which orders were attractive and which were the low-hanging fruit came with experience. Usually, the newer couriers were tricked into taking them. But eventually, word spread like wildfire. To incentivize couriers to accept unpopular orders, Postmates would offer a $50 bonus if you were able to complete 20 orders in a 48-hour period. The catch was that you would have to accept every order that was assigned. You no longer could swipe left on an order that you didn’t like.
If you experienced any issues such as the order not being ready, or the customer not answering the phone, you could call customer service to iron things out. But after a while, the company outsourced their help desk and we would generally get a canned answer that didn’t seem to solve my problem.
To take a break from taking orders, I would often check out of duty to pick up passengers. Very rarely did I do both at the same time, though it was entirely possible unless it was pizza in which my passenger would enjoy the smell of spicy pepperoni with melted cheese on hot pizza dough.
Because the orders took us all over D.C., MD and VA, I would rotate my mode of transportation from my Subaru, bike, and pedicab. Unlike their competitors, Postmates would deliver virtually anything: clothing from Walmart, electronics, groceries, even pharmacy prescriptions.
At one time, I accepted an order to carry $20,000 worth of laptops, ten miles to Bethesda. Postmates knew I was driving my car, so they assigned me the order. The customer was shocked when I arrived since they had made the purchase from Apple and not Postmates. Apple just subcontracted the order to Postmates. Needless to say, I didn’t receive a tip.
Many restaurants are not happy with Postmates doing their delivery since Postmates does not ask the restaurant for permission. They just link the restaurants’ menus to their site and charge the customer a steep delivery fee. Some restauranteurs are not happy because they don’t trust the couriers to handle their food properly, and if there is a complaint, it most likely will be directed to the restaurant.
On April 4, 2015, I was riding my pedicab on M St NW transporting burgers from Thunder Burger, when I was struck from behind and suffered damage to my right rear wheel. The driver stopped and was apologetic, but did not have any insurance. My bike was out of order and I wasn’t able to deliver the meal. My rating score would take a hit, but at least I got a free burger.
I got the wheel fixed and sent a copy of my bill to Postmates for compensation. I was surprised to hear from Stephan the local area manager that they would not cover my expenses.
“What if I got hurt and needed medical care?” I asked.
“You’re a 1099 independent contractor, not an employee,” Stephen replied harshly. “You’re on your own.”
“If you enjoy delivery and want all the benefits of an employee, you should consider venturing into trucking,” Jason said.
“That’s absurd. Trucking is a hard life and if you think the streets of D.C. are busy on a pedicab, I can’t imagine what it’s like in an 18-wheeler.”
The following week, I got a call from Stephen. With my recent slew of late deliveries from my pedicab, my rating had dropped below 4.6 (out of 5) and I would be terminated effective immediately.
“Is there an appeal process?”
“We decided in this case, you didn’t merit one.”
It didn’t matter that I had connections to hundreds of restaurants in the area. It didn’t matter that I had received dozens of 5-star reviews. That couldn’t be fair. The way Postmates treated their couriers was a violation of labor law. The following week, I called Jason Rathod a Labor Attorney from Migliaccio & Rathod Limited Liability Partnership to see what could be done. They agreed to file a claim, and I joined Sherry Singer et al v Postmates in the class action lawsuit.
“If the courts rule in our favor, Postmates would have to treat its couriers as employees and pay them accordingly,” said Jason Rathod. “ A victory will have implications for other delivery companies like GrubHub as well as Uber and Lyft drivers and GrubHub food carriers.“
Labels don’t really matter; it’s the economic realities,”co-counsel, Nicholas Migliaccio said. “Giving workers labels to deny them protections is an injustice worth fighting against.”
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