How Does Shipt Determine Pay?

Whether you just got started delivering for Shipt or you’re still thinking about signing up, there’s one thing you might be wondering.

“How does Shipt determine pay?”

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It’s nice to see the pay estimates before accepting orders, but it’s only natural to wonder what goes into those estimates. If you know, then that might even help you pick better orders.

In this guide, we’re going to break down Shipt’s payments as best as we can so you can understand how Shipt calculates earnings for orders.

How is the pay determined for Shipt orders?

Whether you’re new to Shipt or a seasoned shopper, you might be wondering how the company determines your pay.

Like other gig companies, Shipt uses algorithms to calculate how much you’ll earn per order. In mid-2020, they updated their payment structure, and here’s what they had to say about it:

“The updated pay model takes into account the many factors, such as estimated drive time, the number of items in the order, peak shopping windows and location, that can affect the effort needed to shop and deliver an order. This means that some orders may pay out differently than before since payment is based on effort and not on the value of the order.” Shipt blog

The main takeaway is that the pay changes a lot from one order to the next. Furthermore, your pay is based partially on your effort but not the value the customer receives.

For instance, you’ll get paid more for a delivery that includes 25 items VS a delivery that only has 3 items. The logic is that shopping for 25 items takes a lot more effort and time, so you deserve to be compensated more for it.

While it may seem surprising at first, Shipt doesn’t increase your pay based on the total value of the order. For instance, you’ll make more from a $50 order with 10 items than an order for 2 items that costs $100.

This was a big departure from their old payment structure when Shipt commissions factored in the customer’s order value. But when you think about it, Shipt is paying you for your effort, so the cash value of the customer’s order isn’t that relevant.

However, it’s important to keep in mind that customers can tip, and as a Shipt delivery person, you keep 100% of that tip. Generally speaking, customers with larger orders tend to tip more often, so you could end up making more from higher-priced orders.

What is the payment algorithm exactly?

Unfortunately, the inner workings of the algorithm are private, so we’ll never know exactly how Shipt calculates pay.

With that said, they have provided a reasonable overview of their system, and it’s similar to how other gig apps work too. For example, Uber Eats pays more at peak hours, and DoorDash pays higher commissions based on the region.

What matters most is that you are able to preview these order values before you accept a job. And if you use multi-apping, you can cherry-pick the ones worth the most and then switch to another app.

What is the hourly pay like?

Now that you have an idea of how earnings per order are calculated, you may be wondering what the average hourly pay is like for a Shipt driver.

As a Shipt driver, you can expect to make $15-22/hour.

That’s a pretty wide margin, but it makes sense, given how much the payment can change from one order to the next. If you want to stay closer to the $22 side of that range, make sure to take the most profitable orders and deliver promo orders when available.

It also helps to deliver on peak days/hours. Most Shipt shoppers agree that weekends are the busiest times to deliver, especially Sundays, so this is when your earnings will likely be the highest.

How to earn more with promos

So far, we’ve only discussed the pay structure for normal orders, but Shipt also has promo orders.

They reserve promos for when a customer’s order sits around too long. When this happens, they’ll add a $5-10 bonus to the order to persuade drivers to take it.

Oftentimes, these promos can take you miles out of your normal delivery region, but if you have the means to make the delivery and the price is right, it’s a great way to boost your earnings for the week.

Does Shipt penalize you for declining orders?

With all this talk about pay-per-order and choosing the best ones, you might be worried about repercussions from declining orders.

Unfortunately, Shipt does factor order declines into your driver rating. You’ll want to accept most deliveries that come your way in order to keep your account in good standing. Otherwise, you may see fewer orders showing up in the app for you to take on.

While it’s good to be aware of this, there are other factors, like customer reviews, that are much more important, so make sure to prioritize great service.

How to cut your expenses to earn more

On the one hand, you want to maximize your earnings by delivering more profitable orders and doing so faster.

But there’s another side to the coin.

You can also improve your earnings but cutting costs, and there are some great techniques to do this. The trouble with being a Shipt shopper is that you can’t deliver via bike or electric scooter due to the large volume of items you have to deliver.

That’s why one of the best ways to save money is to get cash back on your gas payments with an app like Upside. The Upside app is totally free, and if you signup with our link, you’ll get a bonus 15¢ per gallon the next time you’re at the pump.

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Now you know all about how Shipt determines the pay for each order. Thanks for reading, and happy delivering!