OO/LO Vs. Company Driver

Topic 25140 | Page 1

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Bruce K.'s Comment
member avatar

I thought about making this comment on an existing thread, but it might be a topic by itself.

The owner operator/ lease operator issue comes up often. Why? Because many young drivers get all excited by the prospect. I can understand this because I have a good memory of how I was as a young buck. No one can fault the younger ones for having dreams and ambitions.

I started several business ventures when young and soon got knocked back on my butt because I had the enthusiasm but not the experience, knowledge or financial wherewithal to be successful. This is what will happen to many new drivers if they try to go OO/LO without racking up years of experience first.

And what about the older ones who are getting into driving as a second career? A lot of us are old enough to draw social security, Medicare and really don't need the money. But I don't think many of us even desire to be OO/LO. Why? After years of stress, hard work, trials and tribulations, we want to experience driving in a relatively stress free environment. So, my advice is to start your career in the same way you will probably finish it, as a contented company driver.

Owner Operator:

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

LDRSHIP's Comment
member avatar

Here is the skinny, attempting to become an OO/LO without first getting a couple years in the industry is committing financial suicide. You might as well divorce your wife, give over full custody of your kids, give away everything you own and file bankruptcy. You will save yourself some time. Most OO/LO can’t afford to go home often. They have the ever present fixed bills hanging over their heads. First year income for a rookie driver is not a lot in the first place. Mainly because they are not efficient, they make mistakes, get lost, and just don’t have the stamina to put it 11 hr drive days every single day. Now add ever present truck note, insurance and maintenance costs hanging over your head. An experienced driver who doesn’t commit the spectrum of rookie mistakes daily can expect to make about the same amount of money as they could as a company driver. Sure, Gross Revenue is a BIG number, so are the expenditures!!!! Plus without several YEARS of safe driving, the insurance companies will bend you over a barrel!!! That is IF they would even offer to insure you! Please, heed the advice my father gave me, after 44 years of driving, about being an O/O. “Just don’t do it, it isn’t worth it.” My father did the O/O thing in the early 80s during the heyday of being an O/O. He would know.

Hunter G.'s Comment
member avatar

I thought I was going to go the owner operator / own authority from the beginning, I figured I would be company just long enough to save up. After speaking with dealers and other owner operators it seems you need around 60k - 30k to get started. Most lenders want a huge down payment for a first time buyer. You could buy used but your going to end up throwing away money in repairs at least with a new truck you can get an extended warranty and then trade off the truck at 400k miles. But after seeing the amount truckers pay in taxes after expenses the pay didn’t really surpass a company driver by much. I’m currently a OTR reefer driver for swift. With 8 months experience I get bonuses and accessorial pay. My average take home is about 900$ Iv had several 1000$ take home paychecks. If the weather is causing a mandated shut down I get paid while down. Dispatch doesn’t harass me and I don’t fight for home time I stay home just as long as I would if I was an O/O . I’m 24 and I’ll probably remain a company driver

OTR:

Over The Road

OTR driving normally means you'll be hauling freight to various customers throughout your company's hauling region. It often entails being gone from home for two to three weeks at a time.

Owner Operator:

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

Reefer:

A refrigerated trailer.

OWI:

Operating While Intoxicated

Andrew J.'s Comment
member avatar

I would be an o/o if the pay was more. I think that if you’re gonna take the risk you should get paid a substantial amount more. But from what I’ve seen is you don’t get that much more. Not that I’ll ever rule it out but I’m gonna wait. Plus if I ever do I want all my debt paid off and have some money put aside. It’s company driver for me for a while.

PackRat's Comment
member avatar

Tip: if you want to be a successful O/O, you’d better have a lot put aside, and also at least 70% of every payday. Taxes, repairs, permits, IFTA, accounting, insurance, savings, rainy day funds, etc.

Rick S.'s Comment
member avatar

It comes down to risk vs reward - and what your expectations are for $$ in your pocket after expenses.

Most of the #'s we've seen thrown up here from lease/oo folks, show they're making "marginally more" than regular company drivers. Maybe 10/15/10K more a year. With ALL THE RISKS that the company assumes when you are a company driver.

A mechanical disaster (blow a turbo, metal goes into the motor - etc.), can put you down for weeks/months with no income - and exhaust "repair fund".

I ran the numbers a few years ago - like a deep run of #'s, including a business plan that my accountant approved. As exciting as the prospect sounds: ownership, flying your own MC#, etc. (or even leased onto someone like LandStar or others) - just not worth the hassle. The folks that are making decent $$ are in "specialized hauling" - but their overheads are even higher than reefer/dry haulers.

I have old friends that are owners. One guy hauls flatbed local - and I wouldn't even want to get behind the wheel of his truck for fear of getting a Level I roadside, and walking away without a license. And it's not "intentional neglect" - just that he can't even afford to keep up with it. He spends his off time, under the hood trying to keep the truck alive.

If you're retired, have $200K to blow to get setup, fund your maintenance accounts right out of the gate, float your receivables for 30-60 days, etc. - and you can afford to LOSE IT AND WALK AWAY if things go bad - GO FOR IT.

We tend to let our ego's jump in and say "I can do this". Keep that in check and KEEP IT SIMPLE. Drive someone elses stuff, let them pay for maintenance, insurance, fuel, taxes, tolls. Drive safe and efficient, run the miles you can, deposit your paycheck and be able to sleep at night.

We'll actually get a firsthand account from Patrick (LDRSHP) - who is going to operate someone else's truck, as an LO/OO operator. Waiting to hear him relate his experiences.

Rick

Reefer:

A refrigerated trailer.

Old School's Comment
member avatar
We tend to let our ego's jump in and say "I can do this". Keep that in check and KEEP IT SIMPLE.

Rick just stated something profound that's sometimes hard to quantify as far as how much it affects a person's decision making process. I've noticed two categories of O/O's out here. There's the guys who are convinced they are making more money than those silly company guys, but they are driving worn out rigs like the friend Rick described. They are living off their revenues thinking they're making money, but the stark reality of their truck's slow demise is somehow ignored.

Then there's the guys who feel like a king because they are driving a "cool looking" rig. They pour all their money into truck washes, accessories, "chicken lights," and paint schemes. After all, these things are "write offs." They like to look cool - they think every company driver envies them in that long nosed Pete, and they can "feel" the respect they get from lowly company drivers even if it doesn't exist. Ego is a cruel master - it's deceptive and misleading.

Having been "The Boss" for most of my life, I know the effects of ego well. There's been more times than I'd like to admit that I allowed mine to lead me into some stupid business decisions. It took a long time for me to learn to separate my emotions and make rational business decisions, and still sometimes a really cool looking rig will get my mind to working on calculations for a business plan. Egos never die. Even when we get old, that creature can still be alive and well.

Dm:

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.
Bruce K.'s Comment
member avatar

Rick & OS, I certainly can't improve on your responses with this subject. But I did observe something I find odd. I thought it would be mostly the younger bucks wanting to go OO/LO. But while I was in school, Schneider had L/O classes going on at the same time. I think they bring the L/O guys in for a week of school for the L/O program. MOST of those guys were older, many as old or older than me! That was a big surprise to me. As Rick said, the OO/LO route is not a way to simplify your life. That is one reason I knew L/O would never be a fit for me. I thought all old guys wanted to simplify their lives like I do. Now I have to rethink the situation and figure out why my original conclusion was wrong. Great, a new complication!

HOS:

Hours Of Service

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

Bruce, there's no age limit on wanting to earn more money. Truck drivers who've been out here for years top out their pay because they've gotten to the point where there's just not any more money left in the freight rates to pay them more. They'd still like to increase their pay, so they turn to the L/O or O/O option, convinced there's got to be a way to make more money. Once they get a good taste of it they usually start to realize how good they had it as a company driver.

's Comment
member avatar

The reason those older guys are going LO/OO (more so OO) isn't only about the money but about the quality of life. As an OO your cherry picking your loads that fit your economics. Your no longer running for quantity but for quality. Meanwhile your time off is much greater to pursue other interests/hobbies. You only run hard when the economics dictates so. This is not for everyone. You need to be in a position of standing that allows for this unpredictable model of business.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
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