Postmates is known as the app where the cost of delivery could easily total more than the food you ordered.
That’s because the app will deliver from anywhere. Ordering from somewhere outside the usual delivery range, though, would send delivery fees skyrocketing into the double digits based on distance. (Orders from the core merchants on Postmates Plus, with more limited options comparable to Seamless or Grubhub, had a more standard delivery fee of $2.99.)
Postmates is scrapping that model, the app announced Thursday. Instead, delivery from any merchant on Postmates will cost $5.99. Delivery from restaurants on Postmates Plus will go up a dollar, to $3.99.
“What we wanted to achieve with this was to make pricing in the Anywhere product fully transparent and clear to customers,” said Postmates Senior Vice President of Strategy and Finance Kristin Schaefer.
The significant changes to Postmates’ pricing are part of a slew of updates Postmates is rolling out. The app is expanding its unlimited service, where users pay $9.99 a month for free delivery on their orders over $20. Unlimited now includes all the merchants on the app, not just Postmates Plus restaurants.
The app will also scrap service fees on Postmates Plus orders and introduce a more variable service fee for its $5.99 orders from anywhere. That fee will be about a few dollars for the average $25-$30 food order, but could be up to $20 when someone’s ordering something expensive like a MacBook through Postmates.
The changes come as Postmates tries to figure out how to attract most customers and fulfill its early promise as the delivery company of the future. Since its launch in 2011, Postmates has raised about $278 millions in funding, including a major $140 million round in September 2016 that reportedly didn’t go so well.
Since then, Postmates hasn’t had much in the way of good news. A leaked version of the company’s presentation to possible funders showed that it did not expect to make a profit until 2018, and that this would only happen if the company’s sales increased 400%.
It’s an ambitious goal, and one that will be tough for Postmates to hit. The app laid off all its city managers last week as it centralized its operations in San Francisco.
At least ordering from that one restaurant that’s too far away for Seamless won’t cost $20 anymore!