As an owner-operator, you can fall under two categories: those that are leased to another company and those that operate under their own authority. As a leading free load board, we know that choosing the best option can be tricky. Each has its own advantages. If you’re not sure which category makes the most sense for you and your business, read on. Like any business decision you make, it’s best to consult professionals (like accountants and lawyers) to make sure you’re making a good long-term decision.
To Lease or Not to Lease
Choosing to lease to a carrier or operating under your own authority requires careful consideration. Here are the things you should know so that you can have a smooth start no matter which path you decide to go with.
Leasing to a Carrier: A majority of owner-operators are leased to major carriers, and this is also a popular option for many rookie truck drivers. Whether you’re looking for more stability or looking to learn the ropes of the trucking industry, leasing to a carrier provides you with some immediate experience without the stresses of owning your own business. Some of the other advantages of leasing to carriers include:
- Consistent pay periods
- No hassle finding loads to haul
- Possibility of health insurance and benefits from the carrier
- Carriers file fuel taxes, toll tickets, cargo insurance and can take care of different licenses and permits.
Operating on Your Own: When you decide to get your own MC authority and go out on our your own, you’ve made the decision to control your own path: now you can determine what loads to take, when you want to work, which brokers to work with, etc.
Still, operating under your own authority requires a business-savvy approach and an entrepreneurial mindset. You’re a business owner now, and you have to shift into that mentality vs. being a company driver or leased-on driver. It can help to have experience in the trucking industry as you may have an established network that can help get your business going. Some of the greatest advantages of this path include:
- Freedom and flexibility
- You are your own boss
- You can pick and choose loads
- Possibility to make better money
Which is better? Leased-On or Getting My Own Authority?
You have to decide what better means for you. Some people like the consistency of being leased-on and not worrying about the other responsibilities that comes with having their own company.
Others want to have the freedom to make their own choices and have an opportunity to make more money.
For example, when you are looking to lease to a carrier, you should know if they’ll be able to provide year-round miles, if they pay per mile or load, what kind of insurance do they provide, and how do they treat their drivers? Asking these questions can ensure that you find the best fit for your goals.
When considering becoming an owner-operator under your own authority, it’s important to evaluate if you are equipped to manage business documents such as licenses and permits, if you have the cash flow to keep your business going, and if you’re able to find loads.
No matter which path you decide is best for you, we hope these tips will give you a good starting point to be successful. If you decide to become an owner-operator, there are a lot of resources to help you, including load boards, which help match you to freight that needs to be moved.