how to pay drivers

So much depends on the individual situation. I am paid on percentage and I dead head ALOT. Some weeks its 50%. I have done the math and I would take a large pay cut going to cents per mile.

There is no one size fits all.

 

Never anything wrong with DH'ing, just depends what you re DH'ing to!

 

An interesting pay structure might combine the two somehow. You start with a base cents per mile rate lower than normal (like .25/mile) then add in a percentage based upon gross PROFIT, with the percentage of gross profit calculated in such a way that that the driver could potentially earn into the $70,000's (or more) with a decent effort. The true earnings potential comes from a combination of 1) Solid rates 2) Productivity and 3) Control of costs. By providing an incentive to the driver to earn more by controlling costs and achieving high productivity, you should attract and keep drivers who take pride in their work, will take care of your equipment, and act as a partner in your success.

Just a thought....

 

I'd want our motivations to be aligned, so I'd do something like:

$76/day (=$24,000/year @ standard 1 day home per week)


plus once a quarter:

27.5% of gross minus quarterly fuel & toll costs (~$0 at 6mpg fueling haphazardly & $14,000-20,000/year at 8mpg fueling at low cost locations & avoiding tolls)


plus once a quarter (paid only if no tickets):

20% of gross (~$40,000-$50,000/year)


Hand the driver an ungoverned truck, paper logs, a fuel card, a website to check fuel prices, & a bestpass and let them figure out where to fuel, how fast to drive, & what route to take... Plus they can decide whether it is worth $12,500/quarter to risk getting caught breaking the law.

 

when I drive 1099, he deducts 15% dispatch fee/ fuel & Ins./ split 50%

 

Another thing to think about, above base pay, is merits. Give the driver a weekly or monthly or quarterly bonus if he/she can hit a certain mpg mark. Example, if they average 7 mpg for the month, give them a $200 gift card. If they average 8, make it $300. Just make sure it's obtainable. The better the mileage, the bigger the reward. The money they save you should surely be more than the bonus. You both win.

 

Double Yellow

Why is 20% gross bonus paid only if no tickets? Do common traffic tickets actually cost the company that much in increased insurance and other costs?

 

Because it is a pretty good incentive not to get any! Think how much safer the roads would be if every carrier paid that way...

Short term? No. But in the long term I believe they do (from something as minor as having ELD forced on the carrier to increased accident frequency & larger lawsuits).

Plus I would want my equipment to be in excellent shape, and the only way that can stay the case is if the driver actually does an inspection on those 15 minutes in their log book...

 

I'm thinking about how to pay a driver too as I'm inching toward acquiring a second truck. One idea I had was paying the driver a base rate of $0.42 cents per mile up to 2500 miles a week. Any week the driver exceeds 2500 miles even by 1 mile- I would go back and add $0.05 more cents for all the miles on that week.

The numbers I keep coming up with is about 110,000 miles a year for the second truck to be profitable after maintenance, paying the driver, and fuel, insurance etc.

In this way the driver has an incentive to be a go-getter rather than a slacker. At the same time instead of netting a couple hundred a week off the second truck, perhaps netting close to $700 a week so everyone wins.

The big difference is the things large carriers can provide like health insurance and 401k's etc, working for an O/O the only benefit (which is a biggie) is quite a bit more freedom from the nanny carrier.