Which would you rather have?
- Thread starter Bruno
- Start date
I would rather have the 40 percent. The owners should always pay for fuel. After all, it's their truck. But then the owner gets to tell you where to sit and such which can be the downside to that agreement.
I don't tell my teams where to sit. I would rather they move to where the freight is. They are contractors and they make the choice where to sit.
nightcreacher
Veteran Expediter
First off,this goes back when I had three trucks
I have worked it both ways,the truck that gets the 60% and fsc actually makes more money than the one getting the 40%.At 40% there is a restriction on coming home.If over 150 miles,they would have to pay for the fuel.For that reason,there getting home is harder.
When drivers get the 60%,they do have to pay attention to what they are doing.More fuel they save,the more money they make.In a tractor fsc is based on 6mpg,when they get 7 mpg,thats like a bonus,5.5 mpg,its a loss of pay,so they would need to change what they are doing.
I've worked this out with the truck I'm driving now,and it still is the same.
Why do I know it works,thats how I pay myself.
drivers split 40%,truck get 20% plus fsc
Also,I have had drivers at 65% because truck thry were driving wouldn't get the minimum fuel mileage,tractor needing at least 6 mpg to get the minimum fsc
I at one time had a truck that wouldnt get the 6 mpg no matter how you drove it,so I kept that truck for myself,but I did a 65% and it worked out fine
I have worked it both ways,the truck that gets the 60% and fsc actually makes more money than the one getting the 40%.At 40% there is a restriction on coming home.If over 150 miles,they would have to pay for the fuel.For that reason,there getting home is harder.
When drivers get the 60%,they do have to pay attention to what they are doing.More fuel they save,the more money they make.In a tractor fsc is based on 6mpg,when they get 7 mpg,thats like a bonus,5.5 mpg,its a loss of pay,so they would need to change what they are doing.
I've worked this out with the truck I'm driving now,and it still is the same.
Why do I know it works,thats how I pay myself.
drivers split 40%,truck get 20% plus fsc
Also,I have had drivers at 65% because truck thry were driving wouldn't get the minimum fuel mileage,tractor needing at least 6 mpg to get the minimum fsc
I at one time had a truck that wouldnt get the 6 mpg no matter how you drove it,so I kept that truck for myself,but I did a 65% and it worked out fine
That is right Steve. That is why I don't tell them where to sit, they make the choice on what runs the truck takes.
nightcreacher
Veteran Expediter
if drivers are contract labor,owner cant say squat,or they are employees,
moose
Veteran Expediter
i think that bough options are way outdated , and reflect the owner needs more then the team ability to be comparative in today Expedite market .
my contract set in a whole other way .
greg334
Veteran Expediter
But they are not contract labor, they are contractors with a skill (CDL) which means a different thing.
You can tell them where to sit or where to go or even what runs to take because it is your truck but you can't tell them how to operate the truck, how to secure loads or tell them how to act or preform a number of job related tasks.
You can tell them where to sit or where to go or even what runs to take because it is your truck but you can't tell them how to operate the truck, how to secure loads or tell them how to act or preform a number of job related tasks.
greg334
Veteran Expediter
I have gone through that process as both employer and employee and the IRS has nothing to do with determining employee status outside of collecting taxes. The Department of Labor is the one who makes the real judgment call on what an employee and what is a contractor and by their standards, what I listed is correct and been practiced in other industries with out problems.
The key is to understand that the driver is a profession, because they have to go through a licensing process and have requirements to maintain beyond the control of the owner, the driver is now in a different category as say a day laborer who is digging a ditch. Another way to think about this is the driver is being hired to operate the truck, not the business and as such the driver has limitations on what they can and can not do in the decision making process of obtaining work. It comes down to how the contract defines each roll.
The key is to understand that the driver is a profession, because they have to go through a licensing process and have requirements to maintain beyond the control of the owner, the driver is now in a different category as say a day laborer who is digging a ditch. Another way to think about this is the driver is being hired to operate the truck, not the business and as such the driver has limitations on what they can and can not do in the decision making process of obtaining work. It comes down to how the contract defines each roll.
Terry's link is the one I would subscribe to. There has been many posts on this in the past. All things being equal, a 60 percent to the driver and receiving 100 percent of the FSC is more beneficial to the driver(s) assuming they know what they are doing, and not just "steering wheel holders".
From a fleet owner perspective, it is my opinion that since they have a vested interest in the truck, they will have more of a inclination to operate it profitably. Driving smart, have a closer eye on maintenance, and reducing excessive idling. From that, I get a smaller cut, but have less operating costs. There are exceptions, but since we have done both over the years, that would be my opinion when comparing.
From a fleet owner perspective, it is my opinion that since they have a vested interest in the truck, they will have more of a inclination to operate it profitably. Driving smart, have a closer eye on maintenance, and reducing excessive idling. From that, I get a smaller cut, but have less operating costs. There are exceptions, but since we have done both over the years, that would be my opinion when comparing.
If the truck has an APU, and perhaps even if it doesn't, the only intelligent side from a gross income standpoint is the 60% side. That's why I won't even consider a team who doesn't want to (as in desire to) pay for fuel. As Dave said, the return is a little less but the headaches/hassles/worries are also less and well worth the tradeoff in income from operations. The "income" from reduced vehicle expenses and personal grief more than makes up for it.