1. Owner operator vs. company driver – what’s the difference?
Company driver:
An employee who hauls freight with tractors and trailers provided by their employer, usually paid per mile driven. Some companies also guarantee minimum weekly pay to protect your earnings during wait times or breakdowns. Today’s market for professional drivers is fiercely competitive, so company drivers often are eligible for attractive sign-on bonuses and benefits packages.
Owner operator:
An independent business person who leases or purchases a tractorand then contracts to haul loads for atrucking company. Owner operators generally earn higher per-mile rates than company drivers or a percent-of-load rate. Although they make more income per load, they also must pay all the expenses of operating a truck and business. Furthermore, owner operators are on their own when it comes to waiting or breakdowns, finding health insurance – and just about everything else.
Owner operators are free to operate as they choose and aren’t subject to forced dispatch. However, they must contract for enough loads, at high enough rates, to both cover expenses and make a living. They assume all the risks and responsibilities of business ownership. With hard work and discipline, you may earn more money as an owner operator vs. company driver – but you’re at risk of losing what you make, too.
Company drivers are free of the burdens of ownership. Once home, a company driver leaves the hassles of the job behind. Someone else pays for the truck, schedules maintenance and finds the next load. Company drivers’ paychecks and free time are their own to spend as they choose.
2. Do you love driving – AND the business of driving?
Successful owner operators aren’t lone wolves, free to roam the roads. They’re knowledgeable, disciplined business people – dedicated to their work 24/7.
If you’re excited by the prospect of becoming an entrepreneur, then be prepared to learn everything about trucking. You’ll be responsible for keeping your tractor, books and business in order, as well as for building relationships with vendors and potential clients. Above all else, working harder and smarter is the key to earning more.
Do you prefer the security of a steady paycheck, letting someone else suffer trucking’s maintenance, marketing, financial, legal, regulatory and administrative headaches? Do you look forward to relaxing on your breaks and days off? Then you may find more freedom in the right company driver job.
3. Are you and your family in good shape?
If you get sick while on the road, who delivers your freight? How do you find your way home during a family emergency?
If you must hurry home, you need someone to take care of your truck and load. When you’re an owner operator vs. company driver, that “someone” isn’t easy to find. What are the odds of an emergency? If they’re above average, then you may be better off driving for a company known for supporting drivers in times of crisis.
Staying healthy may be less expensive as a company driver, too. Owner operators have to find and pay for their health insurance plans. They generally don’t have access to the lower-cost, company-subsidized group plans available to company drivers.
4. Are you and your family financially prepared?
Everyone benefits from disciplined spending and a high credit score.
However, prospective owner operators absolutely must get their financial houses in order. If you’re considering the path of owner operator vs. company driver,
- Reduce or pay off your debt. You need a strong credit rating to buy or lease your truck at a reasonable cost.
- Build a healthy savings account, too. It should be large enough to cover a down payment and other start-up costs. Also, be prepared to supplement your earnings in the early days – you may not receive your first check for two or three weeks.
- Learn to live on a budget. Know all your family’s expenses and how much income you need to cover them. Don’t forget: that income needs to arrive BEFORE your bills come due.
- Develop a realistic business plan. (Use all the data you gather under Question 5 below.) Can you make enough to support yourself and your family as an owner operator vs. company driver? Is this an opportunity worth the investment and sacrifice it requires?
Before you finish your business plan, you’ll need to choose which sort of owner operator you’ll become.
Lease operators:
Lease their tractors from a trucking company and then contract to haul that company’s freight. The upside? It’s easier to get your hands on a truck and a load.
Research carefully before pursuing this option, however. The trucking company for which you’re hauling is your lender, too. Can you trust them to give you (rather than their company drivers) enough business to make a profit – or are you on the hook for lease payments that may exceed your earnings?
Lease-purchase operators:
Purchase their trucks independently or lease them through a third-party leasing company, then contract to haul a single trucking company’s goods.
Owner operators usually prefer the financial independence of this arrangement, as opposed to being a lease operator. Also, a lease-purchase operator often has an easier time finding loads than a self-employed independent contractor.
Just be sure you can count on getting lots of miles at a reasonable rate. Otherwise, you could make less as an owner operator vs. company driver after paying expenses. In addition, be sure you’ll be happy with the loads and routes you’ll most likely drive.
Self-employed independent contractors:
Genuinely are their own bosses. They own their equipment and book their loads. They also enjoy the freedom to choose the routes and loads they drive. Of course, they must find, price, book and drive every trip (and return trip, too).
5. How long have you been driving?
If you’ve been a professional truck driver for fewer than five years, then your best choice might be a company driver job. Even if you ultimately decide to become an owner operator vs. company driver, this gives you a chance to
