Postmates Business Model

Postmates Business Model and How It Works

April 15, 2021 Admin Delivery App Development

What is Postmates?

Launched in the year 2011, Postmates is one of the most popular online delivery services in the USA. Although the majority of its work stems from on-demand food delivery, the company also possesses partnerships with various businesses in retail, supermarket, etc.

Postmates helps in connecting businesses with their customers and allows people to get anything delivered at their doorstep, that too, with just a small amount of fee. If we talk about the Postmates business model, it is quite similar to that of Uber. Just like taxi networks, Postmates’s human courier networks receive the order notification once the customer orders. In addition, the company also uses GPS to deliver the goods in the shortest possible time.

Explore the unique business model of Postmates and understand how it revolutionized the on-demand delivery landscape. This blog post provides a detailed analysis of Postmates' approach to logistics, user experience, and market expansion. Whether you're in the on-demand delivery space or considering entering it, learn from the successes and challenges that shaped Postmates into a prominent player in the industry.

More than 903 dollars of funding has been raised by the company till now. Moreover, it has also sold this funding to Uber for $2.65 billion. Therefore, it would not be wrong to say that Postmates business model has helped the company a lot to achieve huge success. Postmates has also successfully tied up official knots with some well-known companies like Walgreens, McDonald's, Starbucks, Apple, etc.

Let’s know about some facts associated with Postmates

Facts & Timeline of Postmates

  • Founders: Sam Street, Sean Plaice, and Bastian Lehmann.
  • Company Headquarters: San Francisco, California.
  • Company Valuation: $500 M
  • Average order size: $40

Postmates Successful Timeline

Postmates business model

Salient Features of Postmates

  • Wide Reach: Anyone can order from anywhere in the city.
  • Nominal Delivery Fee: Postmates charges fees based on the distance covered from pick-up to drop-off point.
  • Featured Stores: The company owns special featured stores to cater to the needs of different people.
  • 1-Hour Delivery: Deliveries made with Postmates are finished within 1 hour only.
  • Postmates: The delivery couriers who work with the company are also known as ‘postmates’.
  • 24/7 Availability: The delivery couriers or postmates are available 24/7.
  • Minimum Delivery Fee: The minimum delivery fee is $5.
  • Tracking Option: The customer can easily track the location of the postmates after placing the order.

3 Customer Segments Of Postmates: Who Are They?

As a matter of fact, Postmates serves 3 different types of customer segments. Here they are:

1. Customers

Those who order the goods to get them delivered at their doorsteps are the customers. They are willing to spend an extra price (delivery fee) on the required article.

2. Merchants

Postmates also connects with local merchants and provides them a platform for reaching their customers. Through Postmates’s platform, these local merchants deliver goods to their customers at their desired locations. A definite percentage of the total bill is shared by these merchants to Postmates.

3. Delivery Persons

The delivery persons working with Postmates are also called ‘postmates’. As per the Postmates business model, 20% of the delivery fee is taken by the company, and the rest 80% is earned by the postmates. Having said that, postmates can earn around $25 in an hour.

Value Propositions

Having known about the 3 customer segments of Postmates business model, let’s understand the excellent value proposition provided by the company to each one of them.


  • Customers are allowed to order anything from any local store in the respective area.
  • The delivery services are available 24/7.
  • Customers can get things delivered to their doorstep within an hour.


  • The company provides online visibility to the merchants.
  • Merchants can serve their customers using the Postmates platform.
  • The company also helps in extending the merchant’s customer base.

Delivery Persons

  • They are free to work according to their own schedule.
  • They get 80% of the delivery fee.
  • The more will be the deliveries, the more they will earn.

How Postmates Works: The 4-Steps Business Model

Understanding how Postmates works is very pivotal for taking your on-demand delivery business to another level. Especially, if you are thinking to start up with a business like that, understanding Postmates business model is very important. So, let’s start with the first step of the model!

how postmates works

Step 1: Browse and Order

The very first step in Postmates Business Model is to create a demand among people. One can easily browse the products and order them to get delivered to the doorstep.

Step 2: Make Payment

Once the payment is done for the order by the customer, it is said to be received. According to the distance between the pickup and drop-off location, the delivery fee is charged in addition to the actual price of the item.

Step 3: Matching

Once the order is received, a notification is sent regarding the customer’s order to a delivery guy. The application works smartly by allocating the order to the postmates who are nearest to the store. So, the delivery person shops for your order and then delivers the items to your doorstep within an hour.

Step 4: Tracking, Receiving Order & Tipping

Postmates business model has this excellent feature of tracking orders. In the case of delays, the customer can report the same to the authorities. Also, the tipping option entirely relies on the customers. In case the orders are finished very seamlessly by the postmates, the customers have the option to add tips for the delivery person as a token of reward.

So, that’s how Postmates works!

Postmates Revenue Model: How Postmates Make Money?

There is no doubt in the fact that Postmates business model has been a strong backbone of the company to achieve such massive success. However, if you are looking for staring up with your own ‘on-demand delivery’ business like Postmates, then you should be aware of the 3 main revenue sources of the company.

1. Delivery Fee

The company earns a lot from the delivery fee applied for each processed order. As already discussed above, 80% of the total delivery fee is earned by the delivery person and the rest 20% goes into the company’s account.

2. Convenience Fee

Over each order, Postmates charges a convenience fee of 9% in addition to the delivery fee. Moreover, people are happy to pay this price because of the promising and shortest delivery time. This convenience fee also adds up to the company's revenue.

3. Merchant Programme

As Postmates also ties official knots with various merchants, it receives a certain percentage of the total bill received by the merchants. The main purpose of this merchant program is to sign an official agreement with the merchants to add up to the revenue through the shared amount.

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Why Should You Build An App Like Postmates?

Although there are a plethora of reasons why you should choose Postmates business model as a base for your online delivery app, we have cut down a few important reasons for you. Here they are:

Step 1: Advanced Technology

The Postmates application has been intelligently designed with the help of advanced and user-friendly technology.

Step 2: Highly Efficient

The entire delivery process in Postmates is highly efficient and robust. Along with aesthetic designs and appropriate functionality for the users, Postmates is well known for executing the entire delivery process in a seamless and faster manner. So, if you will mimic its efficiency, you can get the expected results.

Step 3: Immense Popularity

Postmates is quite a popular company in the global market. So, if you will try to mimic Postmates, it would become quite easy for you as a beginner to attract new users.

Step 4: Effective Business Model

With the help of Postmates Business Model, you can gain a deep understanding of how to earn more profits for your online delivery business.

Why Choose Appicial To Develop Postmates Clone App?

There’s no denying that on-demand Postmates Colne apps are the future of app technology, and businesses need to embrace it soon.

If you want a professional app development company, we can help you out!!

Appicial is a leading on-demand Postmates clone app development company that has a dexterous team of talented developers and creative designers to turn your concept into a worth using app.

  • Exceptional customer service
  • Affordable price
  • Happiest customers
  • Team of experienced app developers
  • Continuous improvement

Our app developers have successfully made many apps and delivered more than expected. Contact us to get the best on-demand Postmates clone app development that may significantly grow your business without breaking the bank.


So, that’s it for Postmates business model and how does it actually work.

Undoubtedly, the on-demand delivery business has a great future because of rapid digitalization as well as the need for ease and convenience while shopping online. If you are also looking for building an application similar to Postmates, then it is high time to take the action!

Just get in touch with us today and you can get best-in-class on-demand app solutions, that too, without burning holes in your pocket!

Author's Bio

Vinay Jain Grepix Infotech
Vinay Jain

Vinay Jain is the Founder at Grepix Infotech and brings over 12 years of entrepreneurial experience. His focus revolves around software & business development and customer satisfaction.

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