Last Mile Delivery Pay Structures

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Last Mile Delivery Pay Structures

California Last Mile Driver Contracts/Pay Structures

NowRx, 1st Choice Delivery, Apollo Couriers, Shipt and Alto Pharmacy all offer same-day delivery services for prescriptions and pharmaceutical products within California. Pay ranges for drivers, both employees and independent contractors, for these companies ranges from $15-$22 per hour.

NowRx

  • NowRx is a pharmacy startup that offers free local same-day delivery of prescription medications, or low-cost delivery of medications within 1-hour utilizing their own paid delivery employees.
  • While the official contract could not be found, a job posting by the company for a driver in San Jose, CA, indicates that the job is paid $17.50 to $19.00 per hour for full-time hours, with access to benefits including 401(k), 401(k) matching, Dental insurance, Health insurance, Paid sick time, Paid time off and Vision insurance. Employees work 8-hour shifts, including weekends, and are required to have a clean driving record and a valid driver's license. Drivers must be over the age of 21. The full job posting can be found here.

1st Choice Delivery

  • 1st Choice Delivery is a last-mile delivery service operating in the central Midwest and West Coast "for pharmaceutical distributors, office product suppliers and other time-sensitive commodities." The company is highly focused on security, demonstrated by "investments in state-of-the-art track and trace technology, along with implementing leading edge security systems for all their facilities and vehicles." Other security measures include annual criminal background checks and random drug testing of employees, video facility surveillance, encrypted personnel badges, and real-time GPS tracking.
  • While not currently hiring drivers in the California area, 1st Choice Delivery is currently hiring for drivers in the Midwest. According to these postings, 1st Choice Delivery drivers are independent contractor drivers for General Commodity Routes. They state: "With regard to pay, your pay earnings will strictly depend on how well you know the area and how many deliveries you can make in a day. The more deliveries you do the more money you make. As an Owner Operator you are responsible for all expenses. This includes fuel, vehicle repairs, taxes, insurance and any additional equipment necessary to complete the deliveries." The research team found one posting indicating that owner operator drivers for 1st Choice Delivery made between $750-$1,200 weekly.
  • The research team also found a job posting for 1st Choice Delivery hiring an employee driver in Hastings, Nebraska. The advertised pay rate for this employee was $15-$15.50 per hour.

Apollo Couriers

  • Apollo Couriers is a medical logistics company offering last mile delivery services throughout California.
  • Drivers for Apollo are hired as employees and earn $15 per hour plus a mileage reimbursement for driving their own car. They have access to benefits including medical insurance and life insurance. Shifts are eight hours, Monday-Friday, and drivers can expect a full-time schedule.

Shipt and CVS

  • CVS partnered with Shipt to offer same-day Rx delivery at select locations, including in California.
  • Shipt personal shoppers and delivery drivers are independent contractors that must utilize their own vehicle and mobile phone. Shoppers and drivers can select their own schedules and are offered no benefits. Shoppers and drivers can make up to $22 per hour according to Shipt.

Alto Pharmacy

  • Alto Pharmacy is a pharmacy chain serving mainly the West Coast, including in the San Francisco Bay Area, Sacramento, and Los Angeles/Orange County. They offer free, same-day delivery on all prescriptions.
  • Alto Pharmacy hires their delivery drivers part-time, working a flexible schedule of between 10-20 hours per week. Drivers can choose from 3-hour shifts, any day of the week. Drivers use their own vehicles and must have a valid Driver's License and clean driving record. Pay is between $19-$22 per hour.

Research Strategy

The research team first focused on identifying companies that provide last mile delivery service for medical or pharmaceutical companies within California. From there, the research team worked to identify the driver contract structure and rate of pay for each company. We were unable to find official driver contracts after a review of each companies website, relevant press, and job postings. This is likely because these contracts are kept private between the company and employees and only provided upon hiring. Therefore, the research team pivoted to attempt to describe, for each company, the pay structure from job postings, company websites, and salary databases.

US Last Mile Driver Contracts/Pay Structures

Uber, Instacart, Capsule, Roadie and Rx2Go all offer prescription delivery services within the US, generally utilizing independent contractors as drivers.

Uber Health and NimbleRx

  • In August 2020, Uber Health announced a partnership with NimbleRx to provide pharmaceutical delivery in Seattle and Dallas. Prescriptions with NimbleRx can be filled utilizing Uber Direct.
  • Uber drivers are generally understood to be independent contractors, however this varies by city/state and has been fought in the courts. In some areas, such as New York City or California, drivers are considered employees and guaranteed a minimum wage, and may have access to some health care benefits. Drivers in California also receive a $0.30 per mile mileage reimbursement.
  • The Uber driver contract is only available after signing in. Generally, the Uber pay structure works like this: Uber pays drivers a customer fare based on the number of minutes the ride takes, the length of the ride, and demand. Uber then charges drivers a commission of 25%, plus a booking fee, which varies between $1-$3. Uber drivers may also receive tips on certain rides, of which 100% go to the driver.
  • The research team found no special precautions or requirements for Uber Health drivers.

Instacart and Costco

  • Costco offers prescription delivery from participating pharmacies utilizing Instacart shoppers.
  • Instacart Drivers are independent contractors, and make, on average, $15 per hour before tips and before expenses. Instacart shoppers are able to keep 100% of their tips and are also offered other bonuses such as "Peak Boosts" and "Quality Bonuses".
  • The Instacart App agreement can be found here, while the Instacart Independent Contractor Agreement can be found here.

Capsule

  • Capsule offers free, same-day prescription delivery from their pharmacies in New York City, Austin, Boston, Chicago and the Twin Cities.
  • Capsule couriers are hired as employees but must utilize their own vehicle or bike. While full pay details were not available, reports show that couriers make between $15-$17 per hour, and potentially up to $22 per hour.

Roadie

  • Roadie provides crowd-sourced delivery for pharmacies nationwide by matching the delivery with a driver "already headed in the right direction."
  • Roadie drivers are independent contractors. They are paid per-gig (per drive), anywhere from $8-$50 for a local delivery and up to $650 for a long distance delivery with an oversized item. Roadie drivers are allowed to accept tips.
  • The full Roadie driver agreement can be found here.

Rx2Go

  • Rx2Go provides prescription deliveries for pharmacies within New York City.
  • Rx2Go drivers are independent contract drivers that must utilize their own vehicles. Drivers can accept tips. Drivers can make up to $70,154.00 per year, but details on how pay is calculated per trip were not available.

Research Strategy

The research team first focused on identifying companies that provide last mile delivery service for medical or pharmaceutical orders within the US. From there, the research team worked to identify the driver contract structure and rate of pay for each company. We were only able to find the official driver contract for Roadie and Instacart, after a review of each companies website, relevant press, job reviews and job postings. This is likely because these contracts are kept private between the company and employees and only provided upon hiring/contracting. Therefore, the research team pivoted to attempt to describe, for each company, the pay structure from job postings, company websites, and salary databases.

Last Mile Delivery Trends Affecting Drivers

Three trends in last-mile delivery that will affect drivers are the increase in gig driver apps, insourced deliveries, and autonomous deliveries.

Gig Driver Apps

Insourcing Deliveries

  • While many retailers are looking to outsource last-mile delivery, some retailers are shifting to insourcing their last-mile delivery.
  • The driver of this is the sudden increase in demand for last-mile shipping, which "encourages more shippers to begin insourcing last mile deliveries [...] using their trucks to reach their immediate, local consumers."
  • This is contributing to the rise in courier jobs.
  • For example, Amazon has recently been investing in their own delivery fleet, including the purchase of 20,000 Mercedes-Benz Sprinter vans for last-mile delivery in 2018.

Autonomous Delivery

  • Another trend in last-mile delivery is autonomous delivery, or the use of driverless cars, drones, or robots. McKinsey estimates that in the future, "autonomous vehicles and drones will deliver 78% of all items, relegating traditional deliveries to 20% and bicycle couriers to 2%."
  • This is being driven by advancements in technology, coupled by the high cost of labor (accounting for an estimated 50-60% of total cost of delivery) for last-mile delivery companies. Autonomous delivery would, in the long run, save companies a lot of money.
  • The increase in autonomous delivery will put drivers out of work. According to one study, by 2030, there will be a "50% to 70% cut in truck driving jobs in the U.S. and Europe due to self-driving technology."
  • Nuro is a driverless delivery startup in California that recently received approval from the state to collect payment for deliveries completed by their driverless delivery vehicles operating under 35 mph.

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