Episode 62 – Independent Owner Operator vs Lease Drivers, IC’s and Company Drivers

Which Is The Better Choice For You?

Simple question, but a complicated answer. That’s because there is no one answer that is right for everyone. It all depends so much on YOU – your knowledge, skills, abilities and your goals. Beyond that, it depends on how willing you are to learn, and there is a lot to learn if you intend to be successful. Then there is the amount of additional work involved – are you willing to do it, or willing to pay someone to help you with the critical tasks that must be done?

Too many drivers think they want to be Owner Operators – yet few truly fully understand exactly what that really means and what the price will be if they are to become successful. So most do not become successful – they fail.

How About You – What Does Being An Owner Operator Mean To You And Why Do You Want To Become One?

Do you understand the FMCSR requirements that you will be responsible for compliance with – and the penalties and risks for violating them? How about your cost per mile – what will you need to generate to cover all your expenses before you begin to make any profit? Emergency Reserve Funds? Getting freight? How freight rates are calculated and what they currently are where you are operating? Trip planning strategy? DOT drug testing requirements and penalties ( maybe per load moved in violation!) and overall risk management?

What you do not know at a minimum will hurt you severely financially and expose you to all kinds of risks – and can very easily result in your business failing and worse. What could be worse? Being forced out of business and still owing tens of thousands of dollars for starters.

Independent Owner Operators Have Big Responsibilities

They also have much to gain if they understand the business and all its requirements and are willing and able to do the things that must be done consistently. Those who do will make far more than any company driver ever will – and enjoy life in the process!  However, it won’t be easy or simple – far from it.

Lease Drivers and other Independent Contractors/Lease Purchase Program Drivers

Most of these programs are terrible – though there are a FEW that are beneficial to the drivers who understand them fully and are willing to work hard and smart. There are some good companies with good and fair programs – but you have to know what you are doing and even then you have to be able to find the good ones while avoiding the bad. That’s often very hard to do because for every good program there are dozens of rotten ones… so be very careful if you intend to go this route. Also, keep in mind that leased on drivers and lease purchase drivers are CAPTIVE and do not have the same freedom over their own business as an Independent Owner Operator operating under his or her own authority does. That’s BAD.

It means the motor carrier you are with really controls your business more than you do. You are not free or independent and they control your freight so long as you stay there. If you are leased on (but own your own truck financed or not) you can at least leave the company and go elsewhere if you choose – but it will be the same business relationship at the next company too – meaning the company will always have more power than you ever will, yet you will be taking much of the risk and most of the expenses on regardless of where you go.

Is that acceptable to you?

The company driver has a better deal. If he or she knows what they’re doing and runs smart and hard and treats their job like a business – they can benefit more in most cases than the captives can and have none of their risks or and far fewer headaches in the process.

In many cases, you will be better off as a company driver while you learn the ropes, gain experience, and save up the money to buy your first truck and pay cash for it instead of going in debt. You can also use the time to take courses and study the business you are about to start so your chances of success will be much better.

In the end, it is a choice that you will have to make for your self, and regardless of what you choose, I wish you all the best.

Want more info? Then keep reading my posts and listening to our podcasts.

You might also want to join our new Facebook group Trucking Business Success too if you are serious about your trucking business. Its free and we will be covering everything trucking business related on an ongoing basis – so come and join us there!

 



Comments are closed.