Category Archives: Labor Economics

Uber Freight’s power-only expansion helps owner-operators

One of the big problems owner-operators have is waiting to load and unload at warehouses. that is dead time for them. They are only earning their fee if they are rolling; they aren’t paid for waiting time.

Uber Freight has designed a service called Powerloop, which offers to place leased trailers at shippers’ premises so that they can load or unload when it suits them. When a trailer is ready for pickup, the Uber Freight system finds an owner-operator driver who can come to the premises, and simply hook up to the trailer and leave. And on the other end, the owner-operator simply drops off the trailer. It’s then up to the receiver to unload the trailer on their own time.

This is clearly a big advantage to the driver. And Uber takes a cut from the fee offered to cover the trailer lease and maintenance costs, and the service ofhaving it at the shipper’s warehouse when they need it.

Think of it as a bit like the U-Haul moving pods you sometimes see outside the house of someone who is moving. the family can load it as they can, and when it’s ready they can just say, “Come pick it up.” A driver comes and takes it to where it’s going, and leaves it again, in the new driveway or something. It’s up to the family to unload it, and then have it taken away. For some it works a lot better than a moving van.

Warehouses are notorious for having limited working hours that don’t conform to the needs of the truckers they’ve hired to move the load. The warehouses may have labor rules for union workers, or may have instituted various rules themselves. Failing to match rules to truckers’ needs can result in a warehouse being placed on a lwess-than-desirable list that may bring higher rates, or fewer carriers to select from. And at the extreme it may result in abandoned loads and poor relations with the carrier, customer, and warehouse, losing money and time for all.

The Uber approach is one that could work in drivers’ favor and warehouses also. It takes financial muscle, such as Uber can generate— to lease the trailers; and technology, like Uber’s— the system for good communication with drivers and drop-off points to get the scheduling right.

Uber Freight’s power-only expansion into Georgia gives owner-operators leg up Powerloop now accessible in 3 states .

Grace Sharkey Thursday, August 26, 2021

Uber Freight’s power-only expansion into Georgia gives owner-operators leg up – FreightWaves

Two divisions of Covenant settle big case by drivers alleging ‘no-hire’ conspiracy

Now four firms have settled in this big case. It is interesting reading, even though amounts of damages are not revealed. Didthe trucking firms conspire not to hire certain drivers from one another?

That would amount to restraining the worker’s right to take another job. It’s probably illegal. But it is also involved with charging drivers for taking a safety course.

Trucking firms have made many attempts to manipulate work rules to reduce the wages paid to drivers.

One of the most egregious is to require truckers to lease a truck through the company, on terms dictated by the company. This is often not a good deal for the truckers. But that’s not the question here.

John Kingston Friday, August 27, 2021

Two divisions of Covenant settle in big case by drivers alleging ‘no-hire’ conspiracy – FreightWaves

No milkshakes at McDonald’s – peak season worsens already chronic driver shortage

You think we have a driver shortage in the US? In the UK it is even worse.

When we can’t get milkshakes, maybe we can get carriers to pay more to drivers, or change work rules so they can be fairly compensated.

In short term economics of the situation, shippers are always working out on carriers for lower prices. It’s the single factor they care about most. Whether that is what they should be concerned about is a different question; it’s reality. Carriers (trucking companies and owner-operators) have only limited control over their expenses– fuel, which is proportional to distance and delay time), labor costs, and relatively longer term costs such as truck lease payments and insurance. Note that truckers can often get the shipper to pay trailer or container chassis costs; otherwise those are also short term.

The only one ofthese within easy control is labor costs– wages for the driver and any benefits they get. Employee drivers usually get an hourly wage and some benefits like medical insurance, retirement benefits etc. Owner-operators get a piece rate for theload they carry, and must pay their benefits themselves out of the receipts.

So the easy short term way for carriers to squeeze cost out is to keep wages low for employees, or negotiate lower piece rates for owner-operators. They are likely to resist raising rates to drivers, even if they can raise prices to the shipper for hauling their cargo.

How can drivers earn more? They can jump to a different firm. Owner-operators can refuse low-paying loads,and in the extreme simply park their truck, taking themselves out of the labor market for trucking logistics. This is called job mobility in the language of labor economics. That results in fewer people seeking this kind of job. In the US, over half the drivers are owner-operators rather than employees, but the fraction varies in different segments of trucking. In the UK, more drivers are employees.

How can trucking firms react to the shortage? It’s actually simple– pay more! Drivers do a difficult job, that requires some skill and a reliable attitude. Maybe it’s worth more than carriers are currently paying.

By Alexander Whiteman 24/08/2021

No milkshakes at McDonald’s – peak season worsens already chronic driver shortage – The Loadstar