From Company Truck Driver To Owner Operator Questions

Here are three big things we hear regularly from people who want to own or lease a truck:

• I want to have more control over things like where I run and the home time I get
• It's not all about the money
• A lot of people are successful owner operators so I can be too

I just wanted to touch a little bit on each of these:

I want more control

How much control do you really have as a truck owner? Well you're going to have a lot of fixed costs to cover (insurance, truck payments, operating authority, etc) and of course variable costs as you're running (breakdowns, tire replacement, fuel, etc). Now as an owner you can take all the time off you like. But can you really? Of course not. You have a lot of fixed costs to cover and you'll go broke in a hurry letting that truck sit. So you get very little time off, usually no more than a company driver, and often times less. Business owners famously put in double the hours that most employees put in and that's certainly no different with trucking.

You can run wherever you like and you can refuse loads as an owner. But how often can you really do this? Keep in mind that any freight you're not interested in is probably not interesting to other drivers either. But it all has to get moved by someone. Do you think the company supplying you with freight is going to let you cherry pick all the best stuff while everyone else gets stuck with leftovers? Of course not. Everyone has to take their share of the bad loads with the good. If you start turning down too many loads the company is simply going to let you sit. You're giving them too many headaches so they're going to start telling you, "Sorry, that's all we have in that area right now." In the end you'll often find yourself with two choices - take the bad with the good or go broke sitting around at truck stops. So no, you won't get to cherry pick all the best freight as an owner.

Finally, remember there is nothing in any contract that says a company has to give you enough freight to keep your business afloat. So in essence you have very little control over your own revenues. If you owned a pizzeria or a retail store or a handyman business you can always spend some extra money on advertising to drive more revenues. There isn't much you can do in trucking though. Your work time is limited by the Hours Of Service Regulations and the amount of work you get will ultimately be determined by the company that is supplying your freight. In some cases you have the freedom to find brokers on your own, but so can your competition. And once again if you start refusing loads from the company you're with and hauling loads for other brokers, the company you're with is going to stop giving you anything good at all. They hold all the cards.

So the idea of having control is really a myth. You have to cover fixed costs and you have to please the company supplying your freight. You have all of the risks of being the owner, but not the control you would have with so many other businesses.

It's not all about the money

In my opinion you should start a business because you're willing to take on more risk and do more work in order to have greater control so ultimately you make more money than you would as an employee. I personally would never start a business knowing I would have to take on all of that risk and put in all of that extra work just so I can make decisions. If I can't make considerably more as a business owner than I would as an employee then I would either remain an employee or I would start a business with better financial prospects.

I know I can be successful as an owner operator

The big problem here for most people is defining what success is as a business owner. My feeling here is the same as it was with "it's not all about the money". In business it is about the money. If you're the owner of a business but you're only making the same as you would as an employee doing the same job then in my book you're failing. You're taking on a bunch of extra risk and doing a lot more work but you're not making any more money by doing so. You're getting no return on your investment. That's a failure.

Starting a business and then saying, "It's not about the money" or claiming to be successful when you're making the same as an employee in my opinion is a way of covering up for the fact that you're failing. Nobody starts a business expecting to make the same as they would have as an employee and it's disingenuous to attempt to make that claim.

A wise old man never said, "Take on more risk and put in more work for no return and you'll find happiness." You know why? Cuz he wouldn't be a wise old man if he said that. He'd just be an oddly opinionated old man.

Ride2BFree I read your initial post and the others that followed. In a previous career I worked for several start-up companies and without exception before any of the owners decided to take the plunge and start their own company they all accumulated years of experience, skill, and talent working for someone else. Years! Their decisions were also carefully calculated and done without emotion.

Also realize that many of the largest truck-load carriers have O/O leasing programs...for one basic reason. They (the trucking companies) make more money per mile (gross profit) and have less liability with their owner operators than with their company drivers. They also make money from your lease, directly and indirectly. I am not trying to bad-mouth any of those companies (I happily work for one of them as a company driver), however the "deck" is clearly stacked in their favor when they are writing the terms of your lease agreement, even more so if you are inexperienced in trucking. These are huge corporations just trying to increase their profits and the leasing programs are designed to do just that.

Unless I am mistakin', I believe Ride2BFree is currently considering trucking as a career or attending a truck driving school (awesome!). Correct? If true why would you not want to first learn, sharpen your skills and gain fundamental experience on someone else's dime (your employer)? Realistically the first 6 months of your career, yes you are paid to drive, but also absorb and work through a learning curve that at times is steep. You are paid to learn and all things considered, paid well I might add. There are so many details and variables of this business that have nothing to do with the physical act of driving that you will need to experience and learn your first few months on the job. I am not trying to tell you that being an O/O is the wrong path or choice, all I am trying to point out is; in my mind/opinion, based on my experience it's advisable to master "steps 1-4" of this process before seriously thinking about "step 5".

Unless I am mistakin', I believe Ride2BFree is currently considering trucking as a career or attending a truck driving school (awesome!). Correct? If true why would you not want to first learn, sharpen your skills and gain fundamental experience on someone else's dime (your employer)?

This reminds me of when I got my motorcycle license. They have tons of 250cc bikes and basically told us that if we're going to lay it down, we'd probably rather do it at school and figure out what we were doing wrong instead of going home and doing it to our own bike. Similar concept. I wouldn't want to be responsible for the repairs to what I'm just learning how to drive.

After getting all the info here plus more search about the subject of a company driver vs O/O. I have came up with the conclusion like many here did before me. I'll stay a company driver. I will invest about a 1$ a month in buying a lottery ticket if one day I'll Get the winning ticket I'll be a truck for cash just for the fun of it. Ill actually buy 2 trucks one I'll give away to some nice company driver. As old school say and Brett as well the math just not added up as an O/O. I never mention it here before but I do have a wide business experience I made a lot of money lost a lot ex wife's took their share ( which I happily gave it to them) Many business people and I believe that the situation with many O/O are getting emotional over their business. They ending up loosing the business and what ever they accumulated personally as well. You can not get emotional about business. But it is easier say then done. I know.

But for the next year I'll probably remain company driver. Thank you all again for sharing.

I just want to say thanks to all who participated in this discussion. It was a fairly civil discussion, and we actually had a real owner operator in here share some realistic sounding numbers, and he acknowledges that he is working twice as hard as most folks, and throwing in a lot of his own labor for free when it comes to maintaining his truck. A lot of what came out in this discussion is the kind of things I try and get people to think about as they consider being an owner operator. There is a lot of extra work, and risk - yet the financial rewards for those things are usually pipe dreams.

I don't mind it so much when people get aggravated with me, and try to accuse me of something silly and baseless like "Online Bullying." Brett and I both know what the numbers should look like when someone comes in here touting the option of being an owner operator, so we are quick to jump on it when it doesn't pass the smell test. I realize that people get all the wrong ideas about us, and think we have some "agenda." The truth is that we are trying to help protect those who've been mesmerized into thinking they are going to make a killing as an O/O. When you see a guy like Cave Dweller (and thanks a million Cave Dweller for your helpful input) tell you that he's getting paid $2.06 per mile, and you look at your pay rate of .33 CPM , or what ever it is, you start to think "wait a minute, at three thousand miles a week that guy is making over $6,000 dollars a week!" The problem with that is that word "making." An O/O's checks are not like a company driver's checks. As a company driver you've earned, or "made," every bit of your paycheck - it is all yours. As an O/O, somewhere close to 85% of your check will actually belong to someone else, and trust me they already have their hand out looking for their share before you even get the money.

For the record, and I'm speaking for myself here, not for Brett - it really doesn't bother me if someone wants to be an owner operator. I understand the lure and the enticement of it completely. My problem with it is that I have seen a terribly high percentage of people go into it and get completely "blind sided." If I can help a person learn to think about what it is that they are getting into, and just how precarious it can be, then I feel like they can make a more informed decision. I believe it was John Adams who is credited with the saying, "facts are stubborn things." When we try to help folks see what the facts are when it comes to a commodity business like trucking, people tend to think we are being "stubborn" or "hard." The facts are hard things to get past in my view. The problem, in my experience, is that for some reason when people promote the benefits of being an O/O they just sort of skim over all the important stuff (the facts) and act like their hopes and dreams are the reality of it all. When it comes to executing and maintaining a successful trucking business, hopes and dreams start coming apart at the seams as quickly and as dangerously as a bad retread tire coming down Cabbage Hill on a hot July day.

For the record, and I'm speaking for myself here, not for Brett - it really doesn't bother me if someone wants to be an owner operator. I understand the lure and the enticement of it completely. My problem with it is that I have seen a terribly high percentage of people go into it and get completely "blind sided."

I feel the same way. As long as people understand they're almost certainly going to be putting in twice the work and taking all kinds of financial risk just to tell people they own a truck then that's fine by me. I'm sure there are tons of things I choose to do with my life that most people wouldn't think about doing for a second. And yet for me it's awesome.

The truth is that we are trying to help protect those who've been mesmerized into thinking they are going to make a killing as an O/O

Exactly. If I wanted to start a website where we were all full of baloney I'd start truckingbaloney.com and we'd talk all day about how owner operators are making five times what a company driver is making. But since we're here at TruckingTruth I'd really like to stick with the facts cuz it's kinda built into the name, ya know? So the most important thing is to help people understand the reality of the risk/reward ratio they face if they choose to buy or lease a truck.

I've been known to say, "I'll tell you what I know, you do with it what you like." That's exactly the case here also. As long as people come here and learn the facts, not the myths, then we've done our job. What they choose to do with that information is up to them.

I just have a question to Brett and old school If it's a couple that drive as a team does the numbers of being O/O looks better for them? Or you think they still better off being company drivers as a team?

I just have a question to Brett and old school If it's a couple that drive as a team does the numbers of being O/O looks better for them? Or you think they still better off being company drivers as a team?

I'm a lease op and running team as a trainer right now. As long as your variable costs don't go way up running more miles, you should do better running team as a couple since you'll have more revenue to cover your fixed costs (truck payment, insurance, etc.). You'll buy more fuel, the truck will depreciate faster, and your maintenance costs will increase since you're running more miles, but those should stay within a certain range in terms of cost per mile. The big risk is breakdown with repair costs and lost revenue, so you absolutely must have a very healthy rainy day fund for when (not if) that happens, and the more miles you run, the sooner that breakdown will arrive.

I am whole heartedly for becoming an owner operator but to me that means having my own authority, not leasing on to another company. But I also know that going into it without the proper safety net is not a good idea also. Also the profit is going to be based on your needs. If you need more money because you live in say CA vs WY then your pay will need to be higher and that brings the profit down. I have also said that you need to specialize, $1.12 per mile freight will not work. I have seen some that make decent money hauling refrigerated hazmat loads etc. Some chemicals need to be temperature controlled.

You all have seen the loads that I haul, I have posted enough photos... LOL But we run empty about 49% of the time because we are going to the equipment and once we drop it we come home empty. Short hauls seem to be what pays the best. You can not run 10 trucks 49% empty on 1.12 per mile rates, it just does not fit. Now the company I drive for has been around for nearly 40 years so they are well established and command a good rate. Heck even belly dumps here get between $110 and $150 per hour instead of mileage and depending on the number of axles. The more axles the more weight the more the hourly rate is.

I also tell people that they need to have 30-50k in cash for those emergency repairs. Not all repairs will cost that much but an inframe on a CAT can easily run 30k. I want enough in the bank to replace the truck if I need to. I have 5 good friends that I have drilled over the last 3 years and all of them are owner operators with their own authority and run from 1-4 trucks. The one question that they have all pretty much answered the same was "How much can you make per truck after all expenses?" Each and every one of them has told me between $30-60k per truck is what you can expect. This is after all expenses, including your own salary or driver's salary. Now these guys range from 20 years to 3 years in business on their own. They are having to run off the load boards to fill in the gaps.

Where most people get into trouble is 1. Not being able to sell their services. You have to be a salesman and a driver and let's face it, there are some people that could not sell an eskimo a heater and others that could sell them block ice and make them cut it out of the glacier themselves. 2. That extra 30-60k I mentioned earlier, well they think that is extra pay and it is not. That money belongs to the company and needs to stay in the company at least in the short term to build up that bank account.

Me, I still drive for a company even though I want a truck so bad I can taste the grease on it. (either that or I wiped my glove across my mouth) I will not jump into this until I have the funds that I have determined are needed.

"How much can you make per truck after all expenses?" Each and every one of them has told me between $30-60k per truck is what you can expect. This is after all expenses, including your own salary or driver's salary

Oh you almost had it right! But one major flaw. You'll make $30,000-$60,000 in profit after all truck expenses but before paying the driver's salary.

If you paid a driver $50,000 you certainly would not make an additional $30,000-$60,000 in profit off that truck. Not a chance. You would only make a few thousand bucks. Remember, the average profit margin in the trucking industry is 3% and that would be after paying all expenses, including the driver's salary. So on average, if a truck turns $200,000 in revenues for the year it's going to make about $6,000 in profits after all expenses, including the driver's salary.

So basically what you can figure on is this - take the revenues the truck makes, pay yourself $50,000 for the year, and then add 3% of the truck's revenues to your salary. That, on average, is what you're going to make in the end.

$200,000 in total revenues X 3% profit margin = $6,000 net profit

Average experienced driver salary - $50,000

$50,000 + $6,000 = $56,000 total salary to the owner operator after all expenses

On your taxes it will show you personally made $50,000 in taxable income and the truck (the LLC or Corporation) made $6,000 in taxable income.

So on average an owner operator or lease driver will make about 3% more than a company driver. If you paid the driver $50,000 and made another $50,000 in profits from the truck that would likely put your profit margin up around 45% or so. If that were the case you'd have a line of competitors from sea to shining sea ready to undercut you and steal a bunch of those profits.