The majority of owner-operators indicated that they would expect to experience significant decreases in their job satisfaction and annual income if they were reclassified to a company driver, according to a recent study conducted by the American Transportation Research Institute’s Research Advisory Committee.
The study, which surveyed 2,097 drivers, aimed to better understand the existing role of owner-operators/independent contractors in the supply chain, and the impact that labor classification laws could have on commercial truck drivers.
Motivating Factors Behind Becoming a Company Driver or Owner-Operator
The top three motivating factors behind the decision to become a company driver were job security/stability (nearly 90% rated this factor has ‘extremely important’ or ‘important’), income (83%), and healthcare/retirement savings (nearly 80%).
Meanwhile, the top motivating factors behind becoming an owner-operator/independent contractor were independence/ability to set hours, schedule/flexibility, and choice of routes/length of haul.
The ability for owner-operators to essentially control their own workplace environment is such a strong incentive that over 90% of owner-operator respondents ranked the top four motivating factors as ‘extremely important’ or ’important.’
In contrast, the least important motivating factors for company drivers were choice of routes/length of haul, independence/ability to set hours, and business/job growth.
Compensation: Company Drivers Versus Owner-Operators
Among company drivers, the primary compensation models are paid by the mile (46%) and paid by the hour (nearly 28%).
About 74% of company drivers who are paid by the hour, and 66% of company drivers who are paid by the mile, indicated they were ‘very satisfied/satisfied’ with their income.
Among owner-operators leased to a motor carrier, the primary compensation method is percent of freight bill (49%), and among owner-operators with their own operating authority, the majority (nearly 57%) are paid by the load.
Nearly 81% of owner-operators paid by percent of freight bill, and 81% of owner-operators paid on a per load basis, reported being ‘very satisfied’ or ‘satisfied’ with their income level.
Nearly 70% of company drivers indicated their annual wages fell in the $50,000 to $100,000 range. About 55% of owner-operators leased to a motor carrier, and nearly 52% of owner-operators with their own operating authority, reported annual net income for the previous year of $75,000 or higher.
The Impact of Reclassification of Owner-Operators
In recent years, new legislation pertaining to employment status classification has been introduced in various states that threatens the eligibility of drivers to work as owner-operators/independent contractors.
For example, Assembly Bill No. 5, commonly referred to as AB 5, was signed into law by the California Governor in September 2019 and went into effect in January of 2020. With a few exceptions, the bill limits when workers can be considered independent contractors and will require companies that hire workers as independent contractors to reclassify them as employees if they do not pass a three-part test.
The majority of owner-operators expect that they would experience significant decreases in their job satisfaction (73%) and annual income (68%) if they were reclassified to a company driver.
Fewer than one in five company drivers indicated a desire to become an owner-operator in the future. Among those who did desire to become an owner-operator, nearly 85% believe they would experience an increase in their income and 71% indicated they believe they would experience an increase in their job satisfaction.
Among company drivers who indicated that they had been an owner-operator in the past (about 36%3), 30% indicated that their income had decreased since becoming a company driver and 20% indicated that their job satisfaction had decreased.