Question on driver pay...

[BiggMaNN59]

My driver agreed when she started that she would get 60% and pay fuel and tolls. When she left on first day we gave an advance of 250.00 cash for fuel to be paid back at 25.00 per check till pd in full. She ran a 1100 plus mile run supposed to be 1.05/mile but only got 85cpm, and turned down without permission 2 runs. Van broke down and had to come home 1400 miles with my permission BUT refused a run thru Chicago of 600 miles which was on way home. We take 30% off top for van exp. then her 60%. After she quit her pay was 400 but we took 250 for advance out and now wants 250 back plus all her food, phone card, and a motel. Total is 440.00 more and is taking us to court for it. Says we have to pay all expenses for her and fuel. She is acting like she never heard a word we said in beginning . Are we doing something wrong ?

 

[usafk9]

What does your contract with her say? Lemme guess....there isn't one.

Wait....turned down without permission. ......was she your employee?

 

[Turtle]

If you don't have a written contract signed by you and the driver, that's probably considered wrong.

Not sure what you mean by "turned down without permission." Either the driver is an independent contractor making the decisions, or they're your employee.

If you take 30% off the top and then her 60%, what happens to the other 10%?

 

[BiggMaNN59]

The remaining after 30% is where 60% comes from and our 40%. Example 1000.00 times 30% is 300. 1000-300=700.
700 times 60% =420-115(fuel)=305.00 pay.
40% of 700 is 280= my share.

 

[BiggMaNN59]

She was too accept loads. If she refuses loads where does the money come from to pay expenses and pay? She refused a total of 3 runs in 3 days. Why, did not feel like doing them. Then can't understand why check is small.

 

[Turtle]

So you're paying 60% of 70%. Wow

 

[BiggMaNN59]

What is the right way?

 

[Turtle]

Standard in this business is a 60/40 split with the 60 paying for fuel and tolls (usually the driver), and whoever is getting the 60% also gets the fuel surcharge (FSC). The 40% goes to the other party (usually the fleet owner). So, on a $1000 load, $600 goes to the driver and $400 goes to the owner. Fuel and tolls are paid out of the $600, vehicle expenses are out of the $400.

 

[RoadTime]

The remaining after 30% is where 60% comes from and our 40%. Example 1000.00 times 30% is 300. 1000-300=700.
700 times 60% =420-115(fuel)=305.00 pay.
40% of 700 is 280= my share.

 

[BiggMaNN59]

Does not leave much for owner when insurance and van pmts are 1300+/month not including repairs and maintaining van. Then driver turns down loads.

We are finished with hiring drivers and will drive ourselves from now on. After my hip surgery and 3 month recovery I will just do it myself.
Not enough money for one van. I had 7 trucks and 4 drivers years ago and made big bucks and paid my drivers 500/week for 2 days work. Insurance was low, 1000.00 a month for all trucks and upkeep was a 7 day headache but made good return. Company shut down with 2 days notice and we went in the toilet. We paid double to drivers then what others were getting but no one came to my aid when I needed a fair shake to help with my expenses. That's why I have toake more than bare minimum. Sorry for rant.

 

[Turtle]

That's the thing, there really isn't enough money in cargo vans to split it between driver and owner. Neither one can make enough.

As for turning down loads, you can go broke in a hurry by taking every load. You sometimes have to be picky. Not every load is profitable. And, when you pay a driver 60% of 70% then every load they accept has to be a home run or they're not gonna take it. Like, a $600 load, if you take 30% off the top ($180) and then give the driver 60% of what's left ($420 x 60% = $252), then the driver is getting 42% and the owner is getting 58% ($348) and the driver is having to pay essentially half their pay for fuel.

The 60/40 came about because the owner and driver split the money down the middle, and it costs about 20% for fuel, so whoever pays for fuel gets that 20 percent. The Rule of Thirds also bears this out, where One Third of gross revenue goes to Operating Expenses (fuel, oil, some maintenance like filters, etc), One Third goes to the truck (insurance, payments, repair and maintenance), and One Third goes to the driver. So when you split the revenue under Rule of Thirds, which isn't hard anf fast but is rather a general approximation, 33.33% goes to the driver, and then the One Third for Operating Expenses goes to the driver, too. That's 66.67 percent. But of course, unless the driver is paying for oil changes and all used oil, and things like oil, fuel and air filters, then a full third is too much, so you move that 6.67% over to the Truck and the Truck's 33.33% becomes 40%.

That's why, unless you got the van on the cheap, the only way to make any real money with a van is drive it yourself. A dollar a mile give or take just isn't enough to split.

 

[paullud]

My driver agreed when she started that she would get 60% and pay fuel and tolls. When she left on first day we gave an advance of 250.00 cash for fuel to be paid back at 25.00 per check till pd in full. She ran a 1100 plus mile run supposed to be 1.05/mile but only got 85cpm, and turned down without permission 2 runs. Van broke down and had to come home 1400 miles with my permission BUT refused a run thru Chicago of 600 miles which was on way home. We take 30% off top for van exp. then her 60%. After she quit her pay was 400 but we took 250 for advance out and now wants 250 back plus all her food, phone card, and a motel. Total is 440.00 more and is taking us to court for it. Says we have to pay all expenses for her and fuel. She is acting like she never heard a word we said in beginning . Are we doing something wrong ?

As much as the breakdown was a bad thing for you it was a bad thing for her. That took away her "home" and money earning potential. You may want to consider paying for the motel room as a compromise since it was your equipment. It clearly was not your fault but it is not unheard of in the transportation industry for motel rooms to be provided for drivers in the event of a breakdown.

 

[paullud]

The remaining after 30% is where 60% comes from and our 40%. Example 1000.00 times 30% is 300. 1000-300=700.
700 times 60% =420-115(fuel)=305.00 pay.
40% of 700 is 280= my share.

That would give you an extra $180 off of that load that the same driver could get from being with another van owner. So let's say that switching to the traditional 60/40 model costs you that once a week on average throughout the year. $180 X 52= $9,360 It is a nice chunk of money but keeping a happy driver in that van will be worth it as the van sitting empty produces nothing.

 

[BiggMaNN59]

I understand now what I am doing wrong in the expeditor world. Most business's take expenses off first and then pay the worker. If I would have paid my drivers before expenses on my last venture, owned 5 trucks, I would not have lasted long and would have used up savings to pay my truck only expenses. I have talked to business owners and bank officers and was told my way was the way they recommended. So will work myself. My drivers back in 05 and 06 expediting were getting 900.00/week and I paid fuel, tolls, etc. And their jobs ended cause I was not taking truck expenses out first. Imo

 

[aquitted]

You should have went to the Expedite expo then you would have been well informed and thought twice before getting in the business especially with vans.

 

[BiggMaNN59]

I still want to go to an expo when I can. Not many around Nebraska but will be moving next year to Danville AL area.

 

[ATeam]

I still want to go to an expo when I can. Not many around Nebraska but will be moving next year to Danville AL area.

The expense of traveling to the Exepedite Expo is worth the investment if you wish to be informed about this business. Expediting is a unique sector in transportation. Trying to use knowledge from non-expediting endeavors to operate an expediting business is asking for trouble. There are, of course, basic principles that apply to all businesses, but the best way to grasp what expediting is all about is to immerse yourself in the expediting world. And the best place to do that is the Expo. The next best place is this Open Forum. Read, read, read past posts (two years of past posts is not too much) to get a sense of what is going on in this business.

 

[Dynamite 1]

I understand now what I am doing wrong in the expeditor world. Most business's take expenses off first and then pay the worker. If I would have paid my drivers before expenses on my last venture, owned 5 trucks, I would not have lasted long and would have used up savings to pay my truck only expenses. I have talked to business owners and bank officers and was told my way was the way they recommended. So will work myself. My drivers back in 05 and 06 expediting were getting 900.00/week and I paid fuel, tolls, etc. And their jobs ended cause I was not taking truck expenses out first. Imo

Taking all expenses out before you pay drivers is not how it is done. Driver get paid there % from the linehaul plus anything else thats in the contract and fsc if the driver pays for fuel. You have to manage your money and pay expenses out of your %. Its not a get rich quick scheme !!!

 

[usafk9]

Taking all expenses out before you pay drivers is not how it is done.

With that logic, the burger flippers at Mickey D's should get paid the same as the lazy union slugs at the GM plant we delivered to this morning.

While I don't agree with OP'S pay plan, stating "that's not how it's done" should have included "in my business model". There's plenty of pay schemes in this gig. Some are awesome; some suck. OP is free to establish a pay schedule of their choosing. They're also free to accept rapid driver turnover as a result!!!!!!!

 

[Dynamite 1]

Maybe i should have but im old school honest !!! LOL