Being A Company Driver

I'm grateful that Brett laid out the argument the way he did. I want to illustrate it with a true story that might help some of us understand it better, or at least see what Brett is saying. I made the acquaintance of a fellow driver on the same dedicated account at Knight that I'm on. The only difference being he was dedicated to a different "Hydro" plant than I am. We regularly encountered each other at various customer locations.

He was one of these "loud mouth" know it all types who felt compelled to make sure everybody within a hundred yards of him knew that he was an "owner operator." Actually he was a lease operator, but the poor fellow didn't realize there was a difference. One day, after questioning me as to why in the world I didn't do like him and start making that big money, I told him I had done my research and found that I was making better money as a company driver. He just belly laughed at that statement and told me emphatically that his pay as a company driver didn't support his "lifestyle." That was the reason he became an owner operator.

I said well your pay now doesn't support it either. You're spending your revenues as income, and that will catch up with you shortly. The law of means and averages is not easily broken. He just scratched his head and told me I had a lot to learn.

These days he is unemployed. He went broke and quit. He claimed they started cheating him on his lease! He never really understood what was happening, and I'm not sure he understands it now. Revenues are not income. It's very simple, yet it confuses a lot of folks who think they have it figured out.

Matt, when someone makes a statement like this...

The husband said they were clearing $5000/week after all expenses.

They are saying they are making over 250,000 dollars per year as a team. So, for clarification, are you and your wife doing that? Do you seriously believe that lease operator is doing that?

You told us about one great week you had...

Few weeks back we netted 7k miles in a week and made over 6 grand between us. Hard to maintain that mileage, but even 6k miles a week is gonna be 5 grand.

That's great, and it's fun to talk about those big numbers when we have a really strong week like that. Are you prepared to tell us you and your wife are "netting" 250,000 dollars per year?

I don't think so, but we'd love to hear it if it's the truth.

No we are not netting 250k a year. A company team here will make around 5 grand on a 6,000 mile week though, and that is fairly sustainable while you stay out if you are worth your salt. A lease team can certainly pull those numbers too. Do I think that particular husband/wife couple were making 250k a year? Probably not, but it doesn't take cherry picked weeks for those numbers, either.

We run on a dedicated account, we are home a couple days a week, and we don't run hard due to the way the freight is scheduled. So we are working around 40 hours a week each (4300 miles), and we make around 3400 a week.

Running otr , staying out the whole year, I bet we could hit 250k.

As for the rest of it, I'm not going to try to defend leasing. It's not for me, and I certainly don't think it's for anyone new to trucking. I completely understand y'all's take on it and why it is heavily dissuaded here. I just think sometimes people get a little crazy with the actual numbers. Comparing top dog company drivers to lousy lease drivers is a bit disingenuous.

Is it worth the risk? I don't think so. I know the line rates on our load though and it is a bit more money. And that is an apples to apples comparison.

The big question that pops up for me is if you can make the same money as a company driver, then the lease op is losing money. After expenses they are only naming 50 - 60% of what you could. And that is probably an optimistic figure.

Comparing top dog company drivers to lousy lease drivers is a bit disingenuous.

Matt...I just have to comment on this remark...

There are a few "experienced" lease drivers who pop in and out of this forum. They basically state the same set of facts; they are making a little bit more than if they were a company driver.

The numbers you shared are gross figures not net. The point both Old School and Brett made and I will reiterate in the simplest of terms; a lease driver cannot put all of the revenue generated by the truck into their pocket. The same exact thing holds true for any business owner of a non-trucking entity; they budget a salary figure to pay themselves. Usually it's modest in comparison to the total revenue a business generates. It's no different with a lease-operator; it requires discipline and a financial budget that must be followed. Otherwise, it's guaranteed to fail as witnessed by Old School in reference to his friend who clearly did not understand the concept.

Comparing top dog company drivers to lousy lease drivers is a bit disingenuous.

Matt...I just have to comment on this remark...

There are a few "experienced" lease drivers who pop in and out of this forum. They basically state the same set of facts; they are making a little bit more than if they were a company driver.

I agree, they make a little bit more than company drivers (given all else equal, and not falling victim to the risk). Have I misrepresented that?

I understand salarying yourself as a driver as an owner-op as well. But if you want to treat a lease at Prime as baby's first lease (glorified company driver) I think it's fair to include the net income of the truck to the gross salary of the company driver. It would get pretty convoluted doing it any other way.

I do not condone leasing. I do not condone leasing. I do not condone leasing.

I agree with most of the points people make in this thread about leasing a truck. I just felt like the earnings at Prime Inc in a lease as opposed to company truck had been misrepresented according to my personal experience.

I agree, they make a little bit more than company drivers

Why is this being stated as if it's a given, universal fact. It most certainly is not. There are plenty of lease drivers who have gone deep in the hole and never recovered. This we know for a fact.

We have yet to see a single tax statement from a lease driver or owner-operator showing demonstrating they made more than a company driver. I've been asking to see tax forms since I started trucking in '93 and we've asked for this consistently on this website for well over 10 years and we've yet to see one single tax statement from anyone.

What I would love to see is a comparison between a company driver and either a lease driver or owner-operator who has turned the same yearly miles. It's not just about how much money you can make. It's also about what it takes to make that much money.

I just felt like the earnings at Prime Inc in a lease as opposed to company truck had been misrepresented according to my personal experience.

Based on your personal experience as a lease driver?

Did I say thank you for this thread Donna. Again thank you great thread. My lease trainer to go back to earlier posts mainly wanted me to team so he can pay taxes for his year. Spent it as he got it not made it. Ummm I used to teach math and if I started a business I would pay myself pennies and put my money down to run debt free and grow my business. Then pick up leftovers after its all said and done. Not prepared to invest in trucking in this economy. I want gains so I will go company and invest my profits into something profitable. Probably not I just want to buy a sailboat and circumnavigate the world. Dont know an acronym for truck but....

B.O.A.T

Break Out Another Thousand.

Same deal but a sailboat is about free wind not diesel and hard work/leisure. Just my pennies.

I’ll testify to the net vs revenue topic! I own a small landscape business, my company grosses about 150k a year. After all expenses, business and work comp insurance, payroll, maintenance and repair, shop rent, fuel, ETC.... I kill myself to make about 50-60k. That is the reality of a small business. I do high quality work, and could have grown this business into a large company if I had found the right guys. Unfortunately, all the good guys are happy where they are at or went out on their own and are dealing with the same employee issues I am. Honestly, its not worth the headaches, I am burnt out from 12 years of trying. That’s why I want to go back to just working and collecting my pay check

if I started a business I would pay myself pennies and put my money down to run debt free and grow my business

How would you pay your personal bills if you're only paying yourself pennies?

Why do the most highly profitable companies in the world carry sizeable long-term debts even if they have the cash and cash flow to pay them off completely and run debt-free?

What is the #1 reason small businesses go out of business?

You don't have to answer these, but they are examples of questions a person must understand if they're going into business. There are many misconceptions about how to run a business. Old School mentioned the one that always shocks me the most - many people don't know the difference between revenues and profits.

Another one that always surprises me is the approach that debt is the enemy. I hear a lot of people say they want to spend all of their cash to stay out of debt. Debt, when used properly, is the rocket engine of growth in the business world. It can be in your personal life, too. Cash is king. When you're out of cash, you're out of business. Most people seem to fear debt more than they fear running out of cash.

"Business is the ultimate sport."

- Mark Cuban