The Real Story on How Truck Drivers are Tricked into Becoming Owner Operators

Executive Summary

• The trucking industry has a strategy of funneling disgruntled truck drivers into becoming owner-operators.
• We cover the lies the trucking industry tells.

Introduction

As part of a long term strategy to keep the pay of drivers down, the trucking industry has developed a highly cynical approach for keeping disgruntled drivers in the industry by giving them the false hope of being an owner operator.

See Our References

Our references for this and other related articles can be found at this link.

The Use of “Owner Operator” Designation to Transfer Costs to the Drivers and Exempt Drivers from Protective Regulations

One of the big scams used by trucking companies to erode the drivers’ position has been employing “owner-operators.” This makes the driver think they are becoming their boss when, in reality, it is just a way to move liabilities onto the driver. This scam is explained in the following quotation.

I met Claudio at a Midwestern truck stop just before the Great Recession. At the time, I was a sociology grad student trying to understand how long-haul trucking had gone from one of the best blue-collar jobs in the U.S. to an industry one economist said consisted of “sweatshops on wheels.” And at the time, Claudio was puzzling over the number on the paycheck he had just received for the 80 hours he had worked over the course of seven days: $41.58.

In many ways, this brought him the obligations of formal employment and few of the perks. One of the things that had drawn him to this new job was the promise of more control over when and where he drove. Now, Claudio was responsible for nearly all of the costs associated with driving his truck, which he was leasing from a subsidiary of his new company. Under his lease agreement, he wasn’t allowed to work for any other companies, and the company decided all of the loads he was to haul. Yet at the same time, the company paid Claudio as if he were self-employed, meaning it didn’t make contributions on his behalf to Social Security, Medicare, worker’s compensation, or unemployment insurance.

Now, Claudio was responsible for nearly all of the costs associated with driving his truck, which he was leasing from a subsidiary of his new company. Under his lease agreement, he wasn’t allowed to work for any other companies, and the company decided all of the loads he was to haul. Yet at the same time, the company paid Claudio as if he were self-employed, meaning it didn’t make contributions on his behalf to Social Security, Medicare, worker’s compensation, or unemployment insurance. This is the experience of many truckers. They are convinced to work as independent contractors by trucking carriers trying to rid themselves of the financial responsibilities of employers and shift the risk of owning and operating trucks to workers. – The Atlantic

Many trucking companies and intermediaries (that the trucking companies are connected to) have either websites or areas of their main website that are dedicated to “selling” being an owner-operator to their disgruntled full-time truck drivers. The conditions of the job of a truck driver are consistently poor such that it motivates many drivers to investigate becoming an owner-operator, which is normally even a worse deal. 

This is expressed in the following quotation.

Many also would not be surprised by my conclusion that the industry systematically mistreats and misleads drivers, transferring to them much of the cost and risk of the industry’s inefficiencies. What was for me one of the most shocking findings of my research — that employees keep wages low and encourage workers to take risks of owning trucks by supporting third party companies that are allied with them — probably should not surprise the most experienced truckers either. But I suspect that even those drivers would be surprised by how sophisticated this coordination is. – Steve Viscelli

In his book, Viscelli proposes that the trucking industry has been very effective through its propaganda in getting truckers to direct their hopes to become owner-operators rather than focusing on unionization efforts.

The trucking companies control most of the information on the internet regarding owner-operators. Very few truck drivers are likely to read Steve Viscelli’s book, which explains how trucking companies perpetuate and control this scam in detail.

What Google Searches for Owner Operator Showed

Our Google searches found that highly biased and pro-owner operator websites and sources controlled the search results. And, of course, all of the websites placed there through Google Ads were naturally controlled by biased industry sources. All of the websites we reviewed did not declare their bias and pretended to provide information that only sought to help the reader make an informed decision on whether to become an owner-operator. 

The website information from Solo presented being an owner-operator is extremely one-sided terms. It also presents the idea of great abundance to the potential owner operator. Solo describes 500,000 loads daily. However, these loads must not pay very well, as owner operators generally do poorly economically. The only conclusion that one can arrive at is that owner-operators do not have much leverage when negotiating the price of loads. Naturally, owner operators do not find this out until they have committed and bought their truck. 

The Landstar website presented many of the same arguments, promoting the independence of the driver’s new life as an owner-operator. 

I couldn’t find any websites in the search results of the first few pages that wanted potential future owner operators of the many downsides of becoming one.

Even when I typed in “owner operator scam” I still did not find results that provided a clear explanation of what trucking companies do and how they mistreat owner operators. Looking at these results, it is clear that it would be difficult for truck drivers thinking of becoming an owner-operator to obtain the straight story.

However, the information available on YouTube was much more balanced on being an owner operator. The following is a good example.

This video explains that trucking companies give the best loads to their drivers, and owner-operators end up with the worst possible loads. This is particularly horrible, as it is the trucking companies themselves that discriminate against owner operators — which they then encourage drivers to become! 

This was an excellent video, however, it only had 285 views when I viewed it. And I had to find it by typing in “owner operator scams.” However, even when I typed in just “owner operator” the results did have negative or realistic explanations, but they were mixed in with rather confusing videos that focused more on the procedures of becoming an owner operator than warning drivers away from becoming owner operators or explaining being an owner operator as the trucking company scam that it is.

It is curious that the trucking companies do not have the same control or YouTube results as they do with the Google results. However, even with some realistic videos, a truck driver watching these videos may still come away with the idea that being an owner operator might be a good decision.

The Use of “Owner Operator” Designation to Distract from Unionizing

Becoming an owner operator is also a way to keep drivers from focusing on what worked in the past in trucking, which is unions.

No, unions were not the solution on these workers’ minds. Instead, many talked about the possibility of becoming an owner operator. – Steve Viscelli

Fake Independent Contractor Drivers

Designating what should be full-time employees as “Independent contractors” is another scam perpetrated by trucking companies on truck drivers. This places costs and risks on the drivers that the trucking companies should bear. How this works is covered in the following quotation.

Independent contractors are exempt from the FLSA’s overtime and minimum wage requirements. This means they do not need to be paid at least minimum wage for each hour worked or receive overtime for hours worked over 40 per workweek. However, truck drivers are frequently misclassified as independent contractors when they are actually employees under the law. Employers misclassify employees primarily as a means to save money and avoid the FLSA’s wage and hour mandates.

Whether a truck driver has been misclassified as an independent contractor is a complex question that examines numerous factors. Who owns the truck you drive? Who makes your route schedules or assigns routes? Are you allowed to drive for multiple companies at the same time? – Best Lawyers

Yes, obviously a true independent contractor could move loads for any trucking company. However, many drivers classified as independent contractors only work for one trucking company. They are employees who have been illegally classified as being independent. Why would an independent contractor only work for and move loads for only one trucking company?

The quote continues.

Do you have the ability to accept or reject assignments? These will all be relevant questions regarding whether you will be considered an employee or an independent contractor under the law. If you believe you’ve been misclassified as an independent contractor, you should reach out to us, since misclassification issues are highly dependent on the specific facts and circumstances of your situation. – Best Lawyers

This quote is from the website of attorneys who sue trucking companies for trucking labor violations.

Step Two of the Scam That Trucking Companies Perform on Drivers

Step one of the scams trucking companies perform on drivers is to lock them into driving under poor pay and poor conditions by making them repay the cost of driving training unless they stay for a longer period than they ordinarily would. This step is explained in the following article The Real Story on How Trucking Companies Control Drivers With Training Costs. Step two is funneling a high percentage of disgruntled drivers into being owner-operators, which turns out to be financially devastating for the majority of the drivers who take this step. Owner operation is explained as a synopsis in the following quotation.

To retain these more experienced drivers, the TL carriers and trucking media convince workers to become independent contractors, promising that contracting will be financially rewarding and give workers additional control over working conditions. But contracting ends up being even worse for most truckers than being an employee. Simply put, it allows carriers to pay the most productive drivers far less than they are worth for their labor and to shirt much of the cost and risk of owning and operating a truck to them. – Steve Viscelli

Conclusion

The owner operator mode of being a truck driver is primarily a scam perpetuated by trucking companies on workers to manage the natural dissatisfaction with the job of driving a truck that comes from the trucking companies having driven the wages and working conditions in the industry so low. Trucking companies know that many new truck drivers will soon become disenchanted with the job, and they have created the owner-operator mode to serve as a release valve. This release valve produces false hope on the part of the driver and pushes them further into debt. All of this is done as a strategy to keep the trucking companies from having to improve working conditions and driver pay.