I'm a carrier - Planning to give/sell ownership of my trucks to my drivers (Good idea or Bad?)

Yep, I agree.

Although I think his plan could work for the right individual, and I do think it is somewhat intriguing/interesting; the main problem is very average to low average pay, with no benefits, 1099, and average equipment. And this all stems from low revenue and small, tight profit margins.

And another thing that scares me, small profits usually means equipment is not impeccably maintained. I don't know about this specific owner, but someone not making much money, usually can't fix everything he would if he had the money.

 

You make it seem like it's a bad thing, you do know that every single owner operator is taking on a risk to attempt making profits? Therefore makes them entrepreneurs Your boss is an entrepreneur, or if you don't have a boss, then you are an entrepreneur; attempting to make profits.

 

Wow you really need to rethink this.

I'm not going to sugar coat my comments - so here is what I see.

Unless it is a partnership that is formed, the driver will get screwed royally.

The financial liabilities that a driver holds will not allow them to take advantage of the taxes, LLC is not going to do it. Once they formed the LLC, they become a contractor, not an employee and you can't tell them what to do or how to do it. They can't write off a truck payment legally unless it is a buyout lease and only then it has to be done a certain way and can't be done as an employee. The profit sharing scheme will also screw them in taxes because they are not a stake holder in the company you OWN, they are an employee.

The contract is meaningless because of how bankruptcy works, they are not a creditor and not subject to part of the assets unless there is a partnership or a co-ownership of the vehicle (asset). You would have to bond the money some how, escrow won't work because it is not insured.

YOU have little risk involved, they carry all the risk with a loss incurred by your actions. It may be your money up front but you are taking theirs to pay for a truck that you already get a ridiculously high ROI on their work (really $4k in profit?) and theirs is zero BUT the biggest problem is that they can't see that ROI for the payment they are making. You are taking the depreciation from that truck, you are using it to offset the taxes while at the same time they can't write off the payment.

Who would want an old POS truck after 4 years?

Buying used junk is not a way to make a profit long term, it is a way to make profits short term and before some of you start with "I've got a million miles" crap, you are not running/owning a fleet or offering leasing ownership options.

Driver retention isn't about what you offer, right now at a $1.65 you are offering low rates, get off your butt and look for work at a consistent $2.25 a mile and bring up your driver rates.

 

an entrepreneur starts many different business and when each one fails, starts yet another DIFFERENT business. an owner operator stays focused on the business he/she starts up. entrepreneurs are gamblers more so than an ordinary person starting up a business.

if YOU want to go and work for a gambler, be my guest.

 

entrepreneur is an overused word, I am beginning to hate it.

 

@Ridgeline would you at least agree that it could be an interesting business concept if done correctly? And a decent way for a driver to buy out a truck (granted at a fair price for decent equipment, somehow adjusting for depreciation)

 

Not at those rates/ages

 

Yeah. I agree with that. Just think the concept is kind of interesting, if done fairly for the driver.