Sidecar Focus on Deliveries, Increases Commission to 25%
I got this email late Friday night and didn’t have time this weekend to post about it. Sidecar drivers have seen Sidecar’s emphasis on deliveries in the past few months but now they are pushing deliveries to the forefront ahead of rideshare.
Its also odd that just a month ago, they were putting deliveries on hold in Boston, as seen in this email last month:
Sidecar Focuses on Deliveries
In the last few months, deliveries had really started to pick up on both Sidecar and other startups as well, such as Postmates, Instacart, and Doordash. Everyone is looking to save time so they are turning to these services to provide them with food or other items with a touch of a button. Uber has been dabbling with this for quite sometime now with limited time ice cream deliveries or fresh food as UberFresh, but haven’t rolled a more comprehensive delivery product yet.
Sidecar’s pivot over to deliveries was a bit of a surprise to me as I thought it was more lucrative to drive around passengers rather than deliveries, but its possible that Sidecar believes they can earn more money with deliveries rather than ride requests. The rideshare market is a bit crowded with Lyft and Uber, and it’s possible that Sidecar sees more potential with deliveries than they do with rideshare. When there were delivery guarantees in Boston, they were offering $30 an hour almost every weekend whereas they had either eliminated or cut hourly guarantees for rideshare down to $20-25 and hour.
After speaking to a few Postmates drivers, I found out that earnings are somewhere between $10-$20 an hour most of the time, and similar rates at Instacart. These earnings right now are lower than that of rideshare but there is potential of higher incomes as these earnings are based off of one or two deliveries at a time, but what about 5? or 10 at a time? You can only fit so many people in your car (2-3 groups of people, max), whereas you can easily deliver 5 batches of deliveries at once, like what UPS does with packages.
This was also something shocking that Sidecar was increasing their commission up to 25%. A month ago, it was reported by Forbes that Uber was testing out 30% commission in San Francisco and San Diego. Sidecar is now increasing their commission up to 25%. I really hope that this doesn’t push the entire industry up towards 30% commission. A 10% increase in commission is actually a 12% reduction in our pay, and costs from gas and depreciation is already high enough.
I am hoping that the reason for the higher commission is the Sidecar believes their drivers can earn more with deliveries compared to rideshare. However, the higher commission could be for the higher internal expense of Sidecar deliveries. Additional Sidecar employees are working behind the scenes to coordinate deliveries and help with any potential issue with that delivery, even though some issues can be resolved directly with the customer. It is a similar system at Postmates and Instacart and is fundamentally different from rideshare where the app and its algorithm controls the ride. In deliveries, its a mixture of software and people that coordinate and execute deliveries.
Disabling Comments on the Sidecar Garage
Sidecar has temporarily disabled comments in their Sidecar garage due to the large number of questions or comments about the recent changes. Some changes were positive (more deliveries) and some are negative (25% commission) but I don’t think they want to deal with all that right now in the middle of a huge shift for Sidecar.
This event definitely pushes the need for an independent Facebook Group for Sidecar Drivers! This is something that Sidecar employees can’t control so it’ll stay open in cases of changes like this and also don’t have to worry about censors on questions and comments.
New Hourly Guarantee
Sidecar has been testing this type of guarantee in various markets for the past month or two. At first, all deliveries had an hourly guarantee. If you don’t make more than the guarantee, Sidecar pays you to make up for it.
Now they have a few different tiers of hourly guarantees:
- Minimum Rate: If you make below this amount, Sidecar will pay you the difference. If you make over the stated rate, then you get to keep it.
Base Rate – drivers earn a base hourly amount and any income from delivery or rides will be on top of this base rate
Flat Rate – drivers will earn a pre-set rate per hour, no more/no less.
No Commission – drivers will receive a reimbursement directly from Sidecar of the commission
Bonuses – a set bonus, usually in discrete amounts of money, like $3, $5, etc for every delivery in addition to the delivery fee
You can read Sidecar’s email for more information on these various rates.
Email from Sidecar
Below was the email I got late Friday night.
Sidecar is in the midst of a pivotal and exciting time for our company and community. The on-demand economy is the next big thing and we have successfully positioned ourselves into it with Sidecar Deliveries. Moving forward, Sidecar will be shifting into a “deliveries first” model.
So, what does “deliveries first” mean? Deliveries first means that we’ll be focusing the majority of our efforts on growing and expanding the deliveries business, while simultaneously maintaining the current ride business. By enabling drivers to complete both deliveries and passenger trips while online, you will be utilizing your time, effort, and vehicles in the most efficient way possible.
In order to do this, we are actively building relationships and launching pilots with more Delivery partners to increase demand for our Delivery-enabled drivers. We’re also on track to bring Deliveries to all Sidecar markets in the coming months – if Deliveries has not launched in your city yet, our plan is to be there soon.
To execute our new “Deliveries First” model and expand the Deliveries business into all Sidecar markets, a few changes must be made that impact the driver community. Each of these changes is necessary in order to continue growing Sidecar Deliveries and achieve our company goals.
Driver Settings and Pricing
Current prices are a reflection of the passenger rides only business and the following adjustments must be made to enable the growth of Deliveries.
Our Base Commission will be raised to 25%. Effective Monday, July 13th, drivers will receive 75% of completed ride and delivery fares.
Driver price settings will be capped in order to provide consistent, attractive prices to delivery partners and riders. On Monday, July 13th, drivers Price Multiplier will be capped at 2x, and Minimum Price will be capped at $8.
- Sidecar will remain a marketplace model, where drivers with more attractive prices are prioritized in our dispatch algorithm for deliveries.
Sidecar currently pays a pickup bonus to drivers when they complete a delivery request outside of the driver’s pickup radius. Moving forward, this bonus will only apply to requests that are greater than one mile away, outside of the driver’s pickup radius. The bonus will not apply to requests less than one mile from the driver’s location when the request is received.
Driver contribution in The Garage will be temporarily paused as we restructure the platform to align with the Deliveries first model. The Garage will remain open as a resource for drivers to access, however, they will no longer be able to comment on posts or create new discussion topics. Hearing feedback from our driver community is still extremely important to us, so we’ve created new channels for drivers to stay informed and provide feedback directly to the Sidecar team. We’ll be implementing the following in order to keep the lines of communication open between Sidecar HQ and the driver community:
Surveys, newsletters, and updates will be sent directly to drivers on a more frequent basis.
Drivers can now share their feedback directly with the Sidecar team by emailing [email protected]. This email address is not a Support channel, but rather a place to provide your feedback, please do not write in regarding support issues. Each week, drivers will receive an email reporting the most frequent topics submitted by the community. We hope that you will use this channel to provide the same thoughtful and constructive feedback that you previously shared with us in the Garage.
Our goal is to re-open driver contribution in The Garage as soon as its restructured to best suit the Deliveries first model.
Delivery Tip Payment Process
Going forward, all tips for deliveries completed outside of hourly guarantee periods will be distributed to drivers. You will earn the normal pay per delivery fee (based on your price settings) + any tips passed through by delivery partners. For Eat24, a pooled tip amount (~$3.40 per delivery) will be paid out for each delivery completed outside of hourly guarantee periods at the end of the following week.
Hourly guarantee earnings include customer tips. For drivers that do not meet the guarantee requirements, we will pay out the pooled tip amount for each delivery completed within the guarantee period where our partner passed through the tip (i.e. ~$3.40 for Eat24).
We are working with our partners to pass through individual tips at the time of delivery, so in the future you will receive tips in real time when not on an hourly guarantee.
All deliveries completed to date where a driver set their own price (i.e. outside of hourly guarantee periods) included the customer tip. The driver payment for these deliveries was greater than the payment received by Sidecar from our delivery partners (including tips).
All Hourly guarantees completed to date included tips. If a driver received an hourly guarantee payment from Sidecar, tips earned during the guarantee period were included in the payment already received by the driver.
If a driver did not qualify for the hourly guarantee, they were sent a standard pooled tip payment of $3.40 per Eat24 delivery completed. These tips were deposited into driver accounts on Friday, July 10th.
New Hourly Guarantee Pilots
As previously announced, you will continue to see various hourly guarantee structures being piloted and rolled out. The current structures are as follows:
MinimumRate – drivers are guaranteed to earn a minimum hourly rate during the period provided that they meet the requirements defined in the guarantee. All earnings during this period will count towards the minimum guarantee. If driver earnings do not surpass the guarantee, they will be topped up, meaning that we will pay the remaining amount to earn the guarantee.
BaseRate – drivers earn a base hourly amount during the period provided that they meet the requirements. Any ride or delivery trip earnings during this period will be in addition to the base hourly rate.
FlatRate – drivers will earn a pre-set rate per hour provided that they meet the minimum requirements.
No Commission – We will top drivers up for any commission taken on trips during the period.
Bonuses – We will pay a percentage of flat $ bonus on each delivery. This can be combined with other guarantees.
We’d like to thank you, our existing and incredible driver community, for being so adaptive and understanding of these changes. We’re looking forward our future together, and we hope you are too – we couldn’t do this without you!
The Sidecar Team
What do you think about these changes? Do you like that Sidecar is focusing more on deliveries and not on rideshare? Will this impact your earnings in any way? Let us know in the comments below!Have more questions about Uber or Lyft? Head on over to our Rideshare Driver Training Course!