A month ago, mobile delivery startup Postmates publicly launched its ‘Get It Now’ on-demand courier service in San Francisco, allowing its users to order pretty much anything from various stores and restaurants around the city. When it introduced the plan, it charged a flat $7.99 fee for all deliveries made within an hour. Now it’s changing things up just a bit, with a new dynamic pricing plan that will range anywhere from $5-$12, based on how difficult the delivery is.
The dynamic pricing plan is based on an algorithm which calculates the fee based on the amount of time spent traveling and distance traveled, how long its couriers spend shopping or waiting in line to pick up an item, and the type of store that the user ordered from. Prices are based on historical data from the last month of operations, and will continue to be adjusted as new deliveries provide more data.
The new pricing recognizes that not all deliveries are created equal: For instance, ordering smoothies from the Jamba Juice down the street — as one Vungle co-founder does pretty much every day — is different from ordering Postmates to pick up some animal style fries from In-N-Out at Fisherman’s Wharf and having them delivered to the Outer Sunset. The former delivery would probably cost $5, while the latter would probably run $12.
Postmates is really trying to incentivize users to keep using it for really easy local deliveries. And really, it’s about “giving customers the best price possible,” co-founder Bastian Lehmann told me by email.
Another reason it’s willing to move to this model is that, based on its historical data, Postmates is able to forecast the cost of these deliveries before they happen. The new model is also more fair to its couriers, who, you know, actually do the work of delivering things. That said, the new pricing won’t affect early adopters, who will remain at the flat-rate $7.99 model.
In addition to dynamic pricing, Postmates is also pushing its startup discount program, which reduces the cost of deliveries for companies that offer the service to their employees. So far, it’s quietly signed up about 50 startups to the program, including Twitter, Square, Groupon, Yelp, Getaround, Dropbox, Github, and InMobi.
The more employees sign up, the steeper the discount — with average discount running around 25 percent currently. In addition to cheaper deliveries, companies that sign up get tailored newsletters, special offers, and exclusive events through the program.