Don't Be Fooled By Owner Operator Math - Old School's First Podcast!!

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Brian's Comment
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So I'm curious Rainy the way you spit those numbers out I'd say you have a pretty clear understanding of it. Can you say you have ever met a "successful" owner operator or feel it is possible at all?

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Brett Aquila's Comment
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So I'm curious Rainy the way you spit those numbers out I'd say you have a pretty clear understanding of it. Can you say you have ever met a "successful" owner operator or feel it is possible at all?

I know Rainy will be happy to answer that, but before she can you'll have to define exactly what "successful" means to you. To some people it means not going bankrupt. To others it means making more money than a company driver. To others it means becoming very wealthy. So what is your definition of being successful?

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Old School's Comment
member avatar

I completely agree with Brett here. We actually have some successful lease drivers here in our forum. Ernie comes to mind, but he has told us on several occasions that he's maybe making only slightly more than a good company driver. The whole point of all this is to stress that there is precious little extra money in being the owner in this business. For me, that makes it not worth the extra risks and exposure to liability.

Brian, how about looking at it like this. Look at your income now as a company driver, then try and figure out what you could do as a company driver to improve your success. We have a ton of information available here on this site that could help you with that.

I'll tell you this... In the four years since I completed my rookie year, I have increased my annual trucking income by $25,000 dollars. On average that's a $6,500 dollar increase per year. I'm nearing a topping out point now, but I consider that to be very successful.

Rainy D.'s Comment
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So I'm curious Rainy the way you spit those numbers out I'd say you have a pretty clear understanding of it. Can you say you have ever met a "successful" owner operator or feel it is possible at all?

success is subjective. i have an oo.friend who teams at fedex. She bought a 6 year old truck for $35k, and the $14k extended warranty. a month later she put out $15k for a non warranteed part. also as a first time buyer the interest payment was alot more.

so she pays $1200 per month for the payments, big difference from the prime lease. But, shes in an old truck that the first year alone cost her $40k in repairs. because of the age of the truck she spends a lot more for fuel. close to $1000 more per week over my cascadia. Shes also in a Volvo which is heavier than my cascadia, so her fuel will cost more anyway. because she pays for the repairs, she lets things wait or buys used parts such as tires. her APU broke and she waited for weeks before fixing it. shes get a patch welded instead of replacing a part.

If you ask her she is ecstatic with her revenue and she chooses her loads from load boards. she made me all sorts of spreadsheets and offered me a job driving a truck she was planning to buy. she takes way more hometime than any other lease or oo i know but she still doesnt have the savings i do, and her credit is way lower than mine. i was nearly bankrupt and brought my credit score way up to 760s. im completely debt free but shes hovering around 630. so if she was making all that, wouldnt she have the money to pay her debt off? i did.

is it cause i budget? is it.cause she spends too much on entertianment when she goes home? who knows.

as a company driver i will always have a bright shiny new truck and at 400k miles ill get another one. Anything that goes wrong with my truck gets fixed when i request, whether new tires, a window button, an APU or seat. i am usually calm and not stressed about chasing revenue cause i know my FM wil take care of me. with my tests before surgery, i had to keep running between NJ and MO. My FM runs me through places i want without question.

If you ask my boyfriend he will tell you leasing is better, but over christmas he was stressed cause he could only stay home 3 days. he had to make that money, yet he boasts to me that company drivers are used and abused.

Both she and he have made runs in dead of winter when they should have been shut down cause they "had to". screw that, im parking.

i have one lease op friend who after 20 years just retired and bought a house. Most have no savings or retirement funds set up. I have a 5 year plan and can buy a house outright if i want to.

The very first trainer i met at prime is now running solo and told me "dont bother going lease. your making more than i am." Finding honest people is rare.

what is succesful to you, driving a new truck? if so then my boyfriend and i are succesful. is it major home time? then my fedex friend is. is it money in the bank and retirement? then i am more successful than eithee of them.

My idea of success would be all of it. and if it is possible it will take planning and years. Most of these people have no business plan, no budget, no idea what they would do if freight rates dropped again or if fuel shot up in price.

The guys have been so adamant here against it cause people see "driver shortage" and "make $200,000 the second year" and they sign their lives away with no preparation. what Old School and Brett were pointing out is that unlike buying real estate that could go up in value, that truck is constantly going down. thats why so many OO have 1 million miles or.more.

Im a snob. Im not driving an old truck with a busted APU and staying in a Red Roof Inn when the truck is in the shop. Im not risking my life in blizzards. My butt is in a jacuzzi suite. lol so in my opinion...it would take years and a lot of knowledge, if it was possible.

you can be sure of this....any owner or lease op who has flashy cars and vacation homes, motorcycles, are never around to enjoy them. they are too busy working to pay for them.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Fm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

APU:

Auxiliary Power Unit

On tractor trailers, and APU is a small diesel engine that powers a heat and air conditioning unit while charging the truck's main batteries at the same time. This allows the driver to remain comfortable in the cab and have access to electric power without running the main truck engine.

Having an APU helps save money in fuel costs and saves wear and tear on the main engine, though they tend to be expensive to install and maintain. Therefore only a very small percentage of the trucks on the road today come equipped with an APU.

Brian's Comment
member avatar

Well Brett that's a good question. I still might to trying to figure out the full answer to that myself. I'm barely 28 so too put that into perspective I was 3 when you started driving haha. Success in my personal life means providing for my daughter above and beyond her needs. As it pertains to what would be a successful o/o. I'm really not sure. I was just curious what Rainy felt that meant to her. Or what it would even mean to you.

Also I want note none of this had to do with being hell bent on being an o/o. If would anybody ever asked me about it I would absolutely refer them to old schools podcast and this post as a whole. I feel the podcast could be a great series. Have Rainy on next or both old school and Rainy. And than whenever someone does post here for the first time asking about being an operator they can just be immediately refered to these podcasts.

Turtle's Comment
member avatar
Theres a prime driver on FB who as a company driver, went from homeless to paying $100,000 in cash for her house in 4 years. Shes on the Prime FB page if you want to see the post.

While you are there on the Prime, Inc. Facebook page, scroll down to Sep 11th. Prime added a live video of an interview with a lease driver. At 12:45 in, he mentions what he made in his first three years as a solo L/O. In his own words, after all expenses (payments, fuel, taxes, maintenance, etc.), his net weekly take-home averaged out to "about $1000".

That's considerably less than I average as a company driver, and I get all the benefits (healthcare, shiny new truck, 401k, vaca, comp, unemp, etc.).

Granted, he's only one example. But there ya go.

I tried adding a link, but it wouldn't take. It's only a couple of clicks away though

Brett Aquila's Comment
member avatar
As it pertains to what would be a successful o/o. I'm really not sure. I was just curious what Rainy felt that meant to her. Or what it would even mean to you.

For me, success in business means a couple of things:

1) You have to be able to make way, way more money than you would as an employee doing the same work. In other words, being an owner operator and making a profit of $60,000/year is a failure if I can make $60,000/year as a company driver. I've heard that referred to as "buying yourself a job" and it's something you definitely don't want to do. Owning any business entails considerable financial risk and inordinate amounts of time above and beyond what an employee will face. You don't want to take on all of that additional work and risk without any reward.

2) Sustainability over time. You have to be able to sustain a business for the long term. Over 96% of businesses fail before the 10 year mark. When a business fails that almost certainly means you've gone bankrupt, and now everything you've worked for is gone.

Why 96% Of Businesses Fail Within 10 Years

So many times we've had lease drivers and owner operators come in here bragging about how much money they're making when they've only been doing it a few months! A business can not possibly be evaluated on such a short time frame. That's like a football player declaring himself eligible for the Hall of Fame in his rookie year after one good preseason game!

If you can survive in a business for more than 10 years and you've made considerably more money overall than you would have made as an employee in that same business then in my book you can call yourself a success.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Rainy D.'s Comment
member avatar

Yeah!!! Turrle I forgot about that. theres a recording on the prime phone lines that says "The average lease op makes $1000 per week solo and $2300 per week team training. If you arent training, you are losing $1300 per week."

i heard that and said "cool. i take home.more than the average lease op. guess i dont have to lease."

rofl-1.gif

PlanB's Comment
member avatar

The word that sticks out to me there is "average".

Compared amongst a fleet of 5-6000 lease driver's I think your productivity would rank in the top 90-95% Rainy. I'd bet that there are lots of "less than top tier driver's" dragging that average way down.

I'd bet the average income for company driver's is far less than what your producing.

Yeah!!! Turrle I forgot about that. theres a recording on the prime phone lines that says "The average lease op makes $1000 per week solo and $2300 per week team training. If you arent training, you are losing $1300 per week."

i heard that and said "cool. i take home.more than the average lease op. guess i dont have to lease."

rofl-1.gif

Brett Aquila's Comment
member avatar
I'd bet the average income for company driver's is far less than what your producing.

That's the beauty of trucking. You get paid for the amount of work you get done. It has nothing to do with what anyone else is doing. So if you're ambitious you're going to be a top earner. If you're lazy you're going to be at the bottom. As it should be.

The average lease op makes $1000 per week solo

$1,000 per week is about on par with the average company driver, which is the entire point of everything we're saying. You're not going to get ahead by leasing a truck or being an owner operator. You can make just as much money being a company driver, so why take the risk and do all of that extra work for nothing?

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

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