Are you thinking about becoming an owner-operator? Being an owner-operator is a very rewarding job. Truck drivers are who keep America stocked full of food and goods. However, when considering becoming an owner-operator, several factors need to be considered before jumping in a truck. Whether you are making the switch from a company driver or are a newbie, we will cover the basic requirements to begin your career as an owner-operator.
Owner-Operator vs. Company Driver
There are different pros, cons, and requirements for a company driver vs. an owner-operator driver. Owner-operators have flexibility and independence – however, they are fully responsible for taking care of their business expenses and operation. As a company driver, you do not have to worry about the trucking business expenses – that will fall on your employer. Company drivers also have to follow the rules and policies of the trucking company.
An owner-operator owns and runs their own trucking business or leases a truck and contracts with a shipper to haul loads, such as Greatwide Truckload Management. There are three different types:
Lease Operators – where you lease a truck and haul loads for a company.
Lease-Purchase – this is where you lease your truck from a third party and sign a contract to haul loads for a trucking company.
Self-Employed Independent Contractor – you own your truck and contract individual loads. You get more freedom to choose the loads you want and which routes you drive. But, with this option, you are fully responsible for your business operation, expenses, and finding and booking your loads.
Pros and Cons of an Owner-Operator
One of the biggest pros of being an owner-operator is having freedom. You get to make your own decisions regarding your trucking business, especially if you are self-employed. Another pro is you can control how much money you make. Most owner-operators have a higher gross income (up to three times more than a company driver).
While there are some nice pros of becoming an owner-operator, you will have to consider some cons. One of the biggest downfalls of an owner-operator is that you are responsible for all expenses related to your trucking business. These expenses include truck payments, truck maintenance, fuel, insurance, and filing your taxes. As an owner-operator, you will need to keep track of all your receipts and records when tax time comes around. You will also not receive any company benefits such as vacation time off or health insurance. If you are not driving, you are not making money.
How to Become an Owner-Operator
Once you have decided that you want to become an owner-operator as opposed to a company driver, there are some things you must do first. First, you need to determine if being an owner-operator is right for you. You will need to get your CDL, make a financial investment, buy a truck, get insurance, and decide which type of owner-operator you want to become.
Is this career right for you?
Becoming your own boss is a dream for many people. However, sometimes the fantasy of owning your own business and being your own boss blinds you from the work that has to go into it. As an owner-operator, you will need to think about how much time is required to run your business successfully. If you are already a truck driver, you are already spending hours or days away from home, family, and friends. As a business owner, these hours and days can increase.
Obtain your CDL
So, you’ve thought about it, and you’re ready to take the next step – obtaining your Commercial Driver’s License (CDL). While obtaining a standard driver’s license of easy, a lot more time and training goes into getting your CDL. You will need to pass a DOT physical, decide what type of freight you want to haul, whether you want any special endorsements, and complete a knowledge test and road skill test.
When you run your own trucking business, some expenses come along. As mentioned above, you are responsible for taxes, registration fees, licenses, and endorsements. However, you will also need to maintain your truck, handle any loads or leases, insurance, and still be able to afford your living costs. While there is the freedom to become an owner-operator, it is hard work. It takes dedication and learning how to manage these financial responsibilities.
Purchase a Truck
This is the step you have been waiting for – buying your new truck. While this is an exciting but intimidating moment when using your savings or taking out a loan for a truck, it is well worth it. When shopping for your new rig, consider every angle of the type of operation you want to run. When you have determined the type of freight you are interested in, you can fully make your big purchase.
Type of Owner-Operators
You have obtained your CDL, gained financial responsibility, and even purchased your new rig. Now, what kind of owner-operator do you want to be. Are you going to lease to a company or operate under your own name? Many owner-operators lease onto a motor carrier such as Greatwide. Doing so helps you score work and helps with some of the expenses of hauling freight. If you are new to the trucking world, leasing with a carrier can be helpful as you learn the ropes of trucking operations. However, if you decide to haul under your own authority, this can allow you to make more money. However, if you choose to go this route, some of your gains will be offset in finding loads to haul.
Before hitting the road, you will need insurance on your truck. The insurance you choose is often dependent on whether you have chosen to lease with a trucking company or to go out on your own. When leasing with a trucking company, coverage typically applies to primary liability, and you may need to add additional coverage. Below are some additional insurance coverages you can add on.
Non-Trucking Liability Insurance – helps cover you if you are not working with a motor carrier.
Physical Damage Coverage – helps cover costs if your truck has been involved in an accident.
Lease Gap Coverage – if your truck is totaled and the value is less than the remaining amount due on the lease.
Motor Truck Cargo Coverage – covers any goods you were hauling if they become damaged or stolen.
There are multiple insurance coverages you can choose from, and other motor carriers may offer a variety of coverages. However, you will need to ensure that whatever coverage you choose, you follow DOT verification.
Owner-Operator Requirements with Greatwide
So, you think becoming an owner-operator is a career calling your name? Do you have what it takes to become an owner-operator? If you are interested in leasing with Greatwide, below are some driver requirements.
- Have a Class A CDL from the State of your residence
- Medically qualified with a DOT physical
- Have one-year verifiable Class A commercial driving experience within the last three years
- 23 years of age at the time of qualification – flatbed drivers must have a minimum of 6 months of hauling flatbed.
- No positive drug or alcohol tests – this includes previous employment and test refusals
- No commercial felony charges. Misdemeanor charges are reviewed on a case-by-case basis.
- Roadside history will be approved by State utilizing a driver’s PSP (a total PSP score that exceeds 150 total CSA points requires Safety Management’s approval)
- Routine suspension is reviewed on a case-by-case basis
- Three years moving violation and 5-year accident review is as follows
- 3 points or less – pre-qualified
- 4 or 5 points – Need Safety Management’s approval
- 6 points or more – will not be qualified
- Five Year Prohibition – any of the following violations will not be considered
- Drug or Alcohol use/possession/intent
- Preventable DOT recordable accident that resulted in a fatality
- Leaving the scene of an accident or hit and run
- Using a CMV in the commission of a felony
- Negligent homicide, manslaughter, or assault involving a vehicle
Click here if you are ready to fill out an application and lease with Greatwide today.