Owner Operator

Topic 25747 | Page 1

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Victoria M.'s Comment
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My daughter started with a company and after a short time decided to become n owner operator. She has paid 40,000 on the truck the first year and the company is #1 having money problems and #2 has not been giving her enough runs to make it and making it difficult for her. Part of the contract is that she pays 15 cents a mile for maintainence for the truck and she has about 5-6,000 in her fund. The comany is sayin that if she leaves that money stays with the truck. isnt that illegal because it's her her money and just because she didn't need to use it why would the company get that money. Also would like to know good companies she can get on with. she has 3 yrs otr

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.

LDRSHIP's Comment
member avatar

The main function of this site is to help new drivers to successfully transition into the world of trucking. Although we have a few owner operators that belong to this forum, it is not the focus of our efforts. We discourage being an O/O or L/O simply because it is not something a rookie need do or be concerned about.

A better place to take your query would be to OOIDA. There sole focus is supporting Owner Operators.

Owner Operator:

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

OOIDA:

Owner-Operator Independent Drivers Association

Who They Are

OOIDA is an international trade association representing the interests of independent owner-operators and professional drivers on all issues that affect truckers. The over 150,000 members of OOIDA are men and women in all 50 states and Canada who collectively own and/or operate more than 240,000 individual heavy-duty trucks and small truck fleets.

Their Mission

The mission of OOIDA is to serve owner-operators, small fleets and professional truckers; to work for a business climate where truckers are treated equally and fairly; to promote highway safety and responsibility among all highway users; and to promote a better business climate and efficiency for all truck operators.

LDRSHIP's Comment
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Their* sole focus. Dang autocorrect.

Rainy 's Comment
member avatar

My daughter started with a company and after a short time decided to become n owner operator. She has paid 40,000 on the truck the first year and the company is #1 having money problems and #2 has not been giving her enough runs to make it and making it difficult for her. Part of the contract is that she pays 15 cents a mile for maintainence for the truck and she has about 5-6,000 in her fund. The comany is sayin that if she leaves that money stays with the truck. isnt that illegal because it's her her money and just because she didn't need to use it why would the company get that money. Also would like to know good companies she can get on with. she has 3 yrs otr

Not our focus... but.... it isnt illegal if it is in her contract. My company's contract spells this out. If they stay until the "lease completion" they get the money back. If they leave, they lose it. Also, she is not an owner operator. It sounds like she is a lease op and the truck gets returned when the lease is up.

1) She should be the one writing and asking questions, not her parent.

2) It is in the contract, so she agreed to it

3) This is all why we advocate refraining from leasing or owing a truck.

4) when is the lease up? it should be fairly shortly

5) Freight is slow right now at most companies. So less loads may not mean financial ruin of her company.

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.

OWI:

Operating While Intoxicated

PackRat's Comment
member avatar

She’s not an owner operator. She leased a truck. Sorry she made this bad decision, but in all likelihood, she has lost a great deal of money by not doing her research ahead of time.

Owner Operator:

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

Old School's Comment
member avatar

It's just amazing how many people get upset with us when we try our best to discourage them from leasing a truck. Occasionally we get to hear from the folks like this, who confirm the problems with this whole leasing scenario. It's a business transaction that is set up for the company's advantage. Everybody seems to think they have the magic sauce that can make it work, but there's no magic involved.

When Is The Right Time To Lease A Truck?

Old School's Comment
member avatar

I have no doubt some of you get tired of my commentary concerning truck ownership. But lately I've been thinking about how most trucking companies are asset based businesses. They are capital intensive enterprises which utilize their assets to produce revenues and profit. That in itself should indicate how much of an uphill struggle it can be as an owner/operator. An individual is very limited to how many assets he can afford to operate.

I know we've got a few O/O's in here and they seem to be satisfied with how they're doing. I just can never see the advantage to it. If I'm going to make the sacrifices involved to be in business for myself, I want to earn considerably more than I could as an employee. I don't want to buy myself a job. In this business if you want to make more money, you need more equipment to move more freight. Independent owners are severely limited by their small number of assets while a mega carrier benefits greatly from readily available assets. The problem with these assets are the wildly variable costs involved in maintaining them and keeping them up to date.

The big guys have a plan, and they know how to execute it. I make about eighty thousand dollars a year out here, and as soon as they think I've worn out my current truck they put me in another one. I've made good money for myself and for my employer. We're both happy! So, what becomes of my old truck (Their Asset) with a half a million or more miles on it? It gets leased to some driver who most likely has never figured out how to make good money out here. He's convinced the only way he can break through to some good pay is to lease a truck!

Now that truck is entering a proven stage of it's productive lifetime that requires extensive maintenance. Who is going to pay for that? Not the company - no, they're far too smart at this game. The lease operator is going to foot that bill. That's why the company takes that truck from me and keeps that asset producing revenue and profit by limiting their exposure to those additional liabilities. If they keep me in that truck the warranty is going away and they will be responsible for the expenses. They aren't going to let that happen - they're too smart for that. They simply have to find someone who is willing to take on those additional risks.

There's more to this story... that lease operator needs to take his truck to the company's repair shops and terminals so that the company can charge them for the repairs and maintenance. Now they're making money off their facilities (assets) and their extensive discount programs through national tire distribution programs and parts networks. It's called "leverage" in the big boy's conversations. It's something that the small independent O/O's don't get to work with. This game is played with money. And small independent operators are generally strapped.

There's some great income and liberty in this job, but it takes some effort and some understanding of how to get there. Far too many people take what seems like a shortcut to the "good stuff," but it just never seems to work out for them.

Terminal:

A facility where trucking companies operate out of, or their "home base" if you will. A lot of major companies have multiple terminals around the country which usually consist of the main office building, a drop lot for trailers, and sometimes a repair shop and wash facilities.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Robert B. (The Dragon) ye's Comment
member avatar

My only disagreement Old School is your claim about maintenance and repair. As most folks here know, I've done the lease gig, not because I wanted to try to prove any point but rather to take the risk so that I could be a credible witness as to how they work. Some companies may require it, like Prime or Knight but that's not the case with all. I was free to take my trucks wherever I chose for repairs and the only authorization was to make the company aware so they could apply my maintenance account to whatever the repair costs were. I was not in any way limited or required to go to any specific locations for work done. I know several others playing the lease game at other companies and they have no restrictions either. Warranty items were obviously covered at the dealership but non warranty can be repaired anywhere.

HOS:

Hours Of Service

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

You're correct Robert. It depends on your contract.

Robert B. (The Dragon) ye's Comment
member avatar

In regards to the OP, as Old School mentioned, it's all about the contract. If it doesn't state that maintenance account monies specifically stay with the truck, then they should be refunded. However, be prepared because upon their inspection on return, they will compile a list of "repairs" which will wipe out that maintenance account although in reality, they won't do a thing to the truck. It's yet another part of the scam where they will get over on a driver.

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