Lease or fleece?

[RostyC]

Interesting article. Don't do it kids.

Lease or Fleece

I guess when England got in trouble they shifted the liability to another company. Why not just haul freight at a reasonable price and treat people fairly?

[GMAN]

The only way these work is GREED! Greed from both sides. The carrier wants to make as much as they can by getting drivers into these programs by making them think that they can actually own a truck with no down payment, no credit and not long term obligation.

The driver wants to become an owner operator without any money or credit. He thinks that he can make a lot of money and own a truck without any money or credit.

[Jackrabbit379]

Aughta be a law against that. Guess they are not doing anything illegal. Just making money while the drivers get the shaft.
Sad part about is, these tenderfoots see $ signs, and they are walking smack dab into a trap.

[Mr. Ford95]

They could be hit with fraud but I'm sure their lawyers have been very crafty in the language of the terms to not get caught by it.

[cdswans]

Sad part about is, these tenderfoots see $ signs, and they are walking smack dab into a trap.

$$$ ?

Read the article. Some of these people are being told to team, lease or walk home! You want a job? Here's your stinkin' job!

As for the others, it's bad enough with the speed differentials, Prime being the most egregious example, but money is very often the last thing on the fleeced minds. They don't understand money, period, let alone accounting. They see a shiny new truck "of their very own" versus an old fleet rat. Throw in a 3 - 4 - 5 - 6 + mph speed differential over the fleet and the ego takes care of the rest.

The last happy day in a fleece truck is the day they leave home after showing it off.

These companies know every way there is to make or lose money with a truck. Their only sin, in my opinion, is stacking the deck in their own favor so as not to lose money and, if you think about it, that's just good business. If some idiot with a fresh CDL is crazy enough to step up and assert that he/she has what it takes to make the thing work, whose fault is it when it doesn't?

I don't have access to any numbers so this is speculation but I'm willing to bet the rate of success with leasing roughly approximates the rate of success with trucking in general. It's low. The SBA says 2/5 of all small businesses fail in the first year and 4/5 after 5. Shouldn't it be worse for the fleeced, given the notorious attrition in trucking?

[cdswans]

They could be hit with fraud but I'm sure their lawyers have been very crafty in the language of the terms to not get caught by it.

Fraud? Horizon is next door to England? England brings you in to screen and train you for a job then sends you next door because they're not hiring unless you're leasing? Fraud is too kind a word for this.

[Windwalker]

There was one company, some years back, that decided they could get more money for their used trucks by leasing them to get rid of them. As long as you were leasing one of the trucks they wanted to get rid of, they made it favorable for you. If you upgraded to a new one, you're screwed, but stay with the old one and they did not want it back. You told them how many miles you want, and that's what you got. They actually did work with you, but if you spent about $15,000 to buy it outright, they would not let you lease it on with them. You had to go somewhere else.

They're also out of business now. And, when they went out of business, those same trucks that they were getting $20,000 to $30,000 for, were selling for $2,000 and $3,000 for parts.

[Jackrabbit379]

$$$ ?

Read the article. Some of these people are being told to team, lease or walk home! You want a job? Here's your stinkin' job!

As for the others, it's bad enough with the speed differentials, Prime being the most egregious example, but money is very often the last thing on the fleeced minds. They don't understand money, period, let alone accounting. They see a shiny new truck "of their very own" versus an old fleet rat. Throw in a 3 - 4 - 5 - 6 + mph speed differential over the fleet and the ego takes care of the rest.

The last happy day in a fleece truck is the day they leave home after showing it off.

These companies know every way there is to make or lose money with a truck. Their only sin, in my opinion, is stacking the deck in their own favor so as not to lose money and, if you think about it, that's just good business. If some idiot with a fresh CDL is crazy enough to step up and assert that he/she has what it takes to make the thing work, whose fault is it when it doesn't?

I don't have access to any numbers so this is speculation but I'm willing to bet the rate of success with leasing roughly approximates the rate of success with trucking in general. It's low. The SBA says 2/5 of all small businesses fail in the first year and 4/5 after 5. Shouldn't it be worse for the fleeced, given the notorious attrition in trucking?

Maybe what I said didn't make any sense..
What I was thinking, the rookies may be thinking that they will make a lot of money by getting their own truck, not knowing that they are getting shafted. If that made sense.

[cdswans]

Maybe what I said didn't make any sense..

You were right from the start; they don't know the first thing about running a truck, let alone a business and have no clue as to the advantages of owning a small business. Many simply see new chrome and a faster truck and ask "where do I sign?" Many others, apparently, are seeing no signature = no job.

This is from an unrelated news story but it speaks quite well to the "new definition" of the employer/employee relationship . .

WAYNE ALLYN ROOT: Barack Obama: The great jobs killer - Opinion - ReviewJournal.com

"I've polled all my friends who own small businesses -- many of them in the Internet and high-tech fields. They all agree that in this new Obama world of high business taxes, income taxes, payroll taxes, capital gains taxes, and workers compensation taxes, the key to success is to avoid employees. The only way to survive as a business owner today is by keeping the payroll very low and by hiring only independent contractors or part-time employees provided by temp agencies."

It's a bit of a rant but I think it's worth a look.

[GMAN]

He hit the nail on the head with his rant. I agree. I know of several business owners who are also looking to get rid of employees as much as possible and those that they use will be independent contractors.

He did forget to mention one increase in employment. Obama has hired 14,000 new IRS auditors to enforce his tax strategy. And by the way, they are particularly targeting the trucking industry. Don't you just LOVE the change?!

[GMAN]

One advantage these lease carriers have is that the lease operators are still considered independent contractors. It will be interesting to see how the administration comes down on this as the new auditors come into play. It could force more carriers to only offer this type of jobs program, where they lease trucks to prospective drivers and then recruit them to haul their freight. The IRS is looking into these fleece deals and may consider them as employees rather than independent contractors.

[RostyC]

They should be considered employees, IMO. In the Landline Mag it had the breakdown of costs to go along with the article. It was astonishing to see the numbers. It's surprising the tactics they use to "persuade" drivers to enter into these leases, however the drivers can walk away. They might lose some money, but they can walk.