SPLIT AND A TERRIBLE OWNER-OPERATOR AGREEMENT

[chuckwagon]

Is it me or am I off here.

I thought the standard in this industry for payment was generally one of three: 60/40, 40/60 or even a set per mile pay.

The o/o I am driving for just sent me his settlement info with all my deductions which includes nearly $535 for the 'use' of his truck and 15% of the overall line haul to the truck.

So, check this out: I drive 1,000 miles at today''s discounted rate of $1.00 per mile. He graps $150 and his $535 for a total of $685.

Leaves me with $315 before fuel and at 10/mpg 2.65 per gallon -265 for fuel leaves me a hefty take home of $50.00 for the week!

Now yes, I signed a contract which states I am responsible for the upkeep and maintenace of the truck and expenses to the truck. One would assume that 'expenses' to the truck meant the upkeep and maintenace expenes -NOT the actual truck payment!

It was a 85/15 split, I pay fuel, tolls, maintenance expenses, etc so I thought it was a GREAT deal.

I guess I was wrong!

Needless to say this guy and me have parted.

But my point here is - get a lawyer to read over these loosely worded contracts, because now this whole thing is headed to the court system.

I had no problems with my carrier in fact they are great, but this o/o has not been able to keep anyone in this truck and I guess now I can see why.

When I brought up the issue with him and said it would not work all he would say is I shouldn't be driving 70 in the truck as I am burning way to much fuel!

Weeeeeeeeeeeeeeeeeeeeeeee

READ THE FINE, FINEST, LOOSELY WORDED CONTRACTS AND ABOVE ALL LET YOUR LAWYER DO IT!

 

[JohnO]

"It was a 85/15 split, I pay fuel, tolls, maintenance expenses, etc so I thought it was a GREAT deal."

Reading that sent shivers up my spine and it reminded me I'm glad I did research before signing any contract with an O/O.

You proved once again that doing the research from current and previous threads would have eliminated this problem you just experienced.

Personally I spoke with dozen or so O/O got copies of their contracts and spoke with dozens of other drivers asking a tons of questions before I ever contemplated signing any contract. I also spoke with several previous and current drivers before choosing O/O to get history on O/O.

As a result when I chose my first O/O we verbally agreed that I would get 60% plus 100% FSC he would handle tolls and all maintenance. When he presented the contract it was missing I would receive 100% of FSC so we wrote it in and both signed it. That took care of all financial issues and I never had a problem with settlements.

Nightmare like the one you just experienced would be easily eliminated by doing research of current, archived threads, speaking with O/O and drivers. Listening to what is being said by them and taking copious notes. I always carry a note pad or loose paper and pen to jot down what folks are talking about. Doing so eliminates 50% of the BS some folks like to spin. When talking on the phone to folks I alert them I’m taking notes and the conversation follows more intelligently.

 

[terryandrene]

JohnO said it all...research is so important whenever you are about to enter an unfamiliar territory.

You said it yourself, a 60/40 or 40/60 split is typical so a huge red flag should have popped up on your screen when you were offered an 85/15 split. Good luck on your next try.

 

[RichM]

I think Chuck's situation is a good lesson for all potential expediters. Chuck has stated on numerous occasions that he has 15 years business experience. Well experience in one endeavor does not necessarily carry over to a different industry.

John O certainly did it and continues to do it right. You can never research enough.

 

[bigjoep89]

Concrete truck driver 15 years
Concrete sales mgr, 13 years.
Expediter 2 years.
FECC

Chuckwagon.
By your posting about your bad experience you could very well have prevented someone else from making the same mistake. I am sure someone will learn from your bad experience. Wouldn't it be cool if somehow this site could but together a rating system of the fleet owners similar to that system used on E-bay? Keep your head up better days are coming!
God bless our Military and Vets.

 

[Tennesseahawk]

An 85/15 or 90/10 sounds like a lease/purchase deal. Were you buying this truck? Unless you were expecting a truck after a certain amount of time, this definitely was the shaft. Curious... was the $535 per week or month?

"If I claim to be a wise man, it surely means that I don't know." - Kansas

 

[highway star]

One of the canned answers the experienced veterans here have given many times is to make sure you understand your agreement and take it to a lawyer if you don't.

 

[davekc]

I have to agree, the 85/15 deal was a major flag. This goes to even asking and researching the basic items.
As mentioned, it doesn't matter if it per say is a canned message, as long as it is the right one.
Much better luck on your next gig.







Davekc
owner
22 years
PantherII
EO moderator

 

[kwexpress]

KW Express
o/o till i die

good luck chuck

 

[Bruno]

I would have to say that JohnO is a very honest guy and I met him at the Expo this year and even sent him a copy of the lease we have our drivers sign. 85/15 sounds like a lease to own deal. Some can be good and some can be bad. It depends on how new the truck is. Everyone think that if an owner goes by whats in a lease and then follows the lease when they part ways the owner is a crook or someone that don't pay their drivers.

Not saying that this is the case here, but I do see it here drivers doing it. I for one have been called a thief and a crook. And I just went by what was in the lease when they signed it.

 

[chuckwagon]

You all have brought up good points.

Instead of bragging about my past 15-years of business experience in another business, I should have done more asking than talking, and been taking notes instead of shots at others.

To answer a few of the questions, no this was not even a lease/purchase, which if, I would have been asking instead of talking I would have LEARNED that through one of the vets.

And yes, if I would have done enough LISTENING and ASKING and learned that 60/40 and 40/60 were standard this guys 85/15 non-lease-purchase offer would have sent up huge red flags.

But, I have learned the hard way with my hard head, and now am sitting down to the dinner table eating crow.

For all the bs I throw out about by past experience eating this crow right about know is a little hard to chew.

Hey, anyone got some ketchup?

(Well if this prevents another newbie from being as blind and ignorant as I was - then so be it. A little crow never killed anyone. but it really is is tough to chew though. Even with ketchup)

 

[Bugsy Siegel]

>For all the bs I throw out about by past experience eating
>this crow right about know is a little hard to chew.
>
>Hey, anyone got some ketchup?
>

ROFL!!!!





I don't have any ketchup but I do have some great hot sauce made by a guy I work with, I'll save you a bottle!

 

[LDB]

Sounds like you got hit with what Dave Ramsey calls "stupid tax". It gets everybody at some point. The important thing is you learned from the experience and now know how to not get hit with that tax again. Good luck.

Leo Bricker, 73's K5LDB, OOIDA Life Member 677319
Owner, Panther trucks 5508, 5509, 5641
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

 

[chuckwagon]

Stupid tax - that is a great way to describe it!!!!!!

I have discussed this with several of you and am thankful for your input.

I have also been contacted by several of the o/o's here offering a spot with them - once again thank you so very much.

I am to be back on the road 1/2/07 with the rest of you! Hope to see you all out there and thank you for this education you all knew I was going to get - the hard way, becacuse of me being so close-minded on things.

Thanks for the patience, understanding, concern and the 'veteran education'.

 

[arkjarhead]

One reasoning I think expediting is a shisty biz is before I ran expedite I was never asked to pay for fuel. These owners say they want the driver to have something invested in the operation. My time is my investment. I've worked for big companies(C.R. England) and small companies (Larry Fowler Trucking) and was never asked to pay for fuel or tolls. The expedite owners ask a company driver to pay for fuel. To me that is sticking it to a driver and the extra pay is just a lubricant they use so they can really stick it to you. If I want to pay for fuel,tolls, or upkeep on a truck I'll buy one. that's a way that expedite owners give u the crap and they take all the profit. Imagine how long this would last in the business world. you open a business and hire employs and tell them i'm gonna pay you a six figure salary. the employees get happy, and then thay find out but you have to pay the bills run the business and i'll sit on my lazy butt and take the profit. all those employs would walk. in the union they would strick. why is it common place for employers(fleet owners) in the expedite industry to rob their workers and its acceptable. now i understand why you guys can't keep a driver longer than 6 months. you owners are a bunch of crooks. except for the few honest ones. i'm sorry if i have offened the few honest owners but the truth hurts.

 

[Fr8 Shaker]

Well one of the reason's, Actually the main reason is deadhead. I know of an owner that was paying the fuel until he had a driver put on 26,000 miles with only 6,000 of those miles paid. And also heard of another driver using the owners van to stay at home delivering pizza's. Would you pay the fuel???

 

[Tennesseahawk]

Ark... Many drivers, when given the choice, choose to take the 60%+fsc. IMO, this helps both the owner and driver. It helps the owner whos truck isn't being idled or deadheaded needlessly. The driver also tends to be more interested in noises and actions the truck may make, since it usually will affect fuel milage. It helps the driver who can dh where their heart desires, and not worry about being nickel and dimed to death by penny-pinching owners who charge for every needless mile. Fueling decisions also give the driver more responsibility than just steering the truck, which makes them more business savy when it comes time to get their own truck.

Granted, the driver is on the losing end if the truck gets less than 8 mpg and doesn't have a generator. In that case, they're better off going with 40%.

"If I claim to be a wise man, it surely means that I don't know." - Kansas

 

[arkjarhead]

The deal is until I own a truck a won't pay for fuel. I will ask you before I start what % is to much deadhead. example is if offered a 600 mile run would you limit me to 300 miles deadhead for the load or 150? I would also ask how close to home do you want me to be before I deadhead home. get it in writing then go to work. If you want to sit somewhere until I get a load within 30 miles that's fine. once i've been there for 24 hours I need at least 30 dollars a day layover pay. as a good driver I feel I'm entitled to good benenfits and pay, and i always got what I wanted. I paid for fuel once. That was because a very close uncle was on his death bed in arkansas and I was in wisconsin. I asked the owner(who paid for fuel) could I go home if I paid him back for the fuel. he said sure. uncle died on the way home and I took about a week off. sent the owner a check, he deposited it in the bank and decided I needed the money more than he did and he mailed me a check with the money back. I could understand payin for fuel in that situation. I refuse to pay for fuel based on principal. first u get stuck with fuel. then tolls. then washes. the next thing you know they are asking you to pay for an oil change and charging you rent. anytime something had to be bought for a truck i was driving I called the owner and got it approved for reimbursement then i bought it.if you are a good driver and have references that can prove your worth you can get a good deal. I know a man I used to haul for and if I called him right now lookin for a job(if i could drive) he'd find an honest owner of his with an open truck to put me in. he told me when i was ready to go back on the road let him know he would buy a truck for me to drive if he needed to. That's how bad he wants me to haul his frieght. I'm not trying to brag but when you leave a path of good employers and take care of equipment you can get what you want/need. if i owned a truck i'd muck rather pay for fuel and have an experinced driver who will make up the difference by making sound descisions and making me money than i would hire a green rookie who is gonna want me to hold his hand from 500 miles away but will pay for fuel. to me its common sense. the more experince and better refernces the sweeter the deal.that's how it shoudl be.

 

[LDB]

The side taking 60% plus 100% of the FSC and paying for the fuel is the side that's going to make the most money. You are certainly entitled to an opinion that having to pay for fuel is a bad thing however if you run the numbers you'll find it's not only the "bad" thing it's the smarter and better paying thing. That depends on the driver being in business for himself, not just being a steering wheel aimer though.

Leo Bricker, 73's K5LDB, OOIDA Life Member 677319
Owner, Panther trucks 5508, 5509, 5641
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

 

[davekc]

I think Hawk is alot closer to reality on this one. I would rather have someone that has a vested interest verses someone just to hold the steering wheel. The caliber of people are remarkably different between the two when engaged.
There may be an exception or two, but not many.
I would rather KNOW someone is protecting my investment, rather than whether they might be.









Davekc
owner
22 years
PantherII
EO moderator