Previously in this series: Time-based pay could improve fairness, reduce detention
"It's about the only way I would do it. If you operate for all-miles pay ... you're letting the house hold your cards. [When you do that,] the pay's always going to be less." --Owner-operator Henry Albert
Percentage of the load/revenue has risen to predominance over many years as the No. 1 compensation structure for owner-operators leased to motor carriers. Owner-operator Henry Albert was referencing that model when he spoke the words above.
Nearly 8 in every 10 leased owner-operators in Overdrive's audience today are compensated on a percentage model, according to our 2021 compensation survey of owner-operators leased and with authority, small fleets and company drivers. It hasn't always been that way. As Overdrive reported just about a decade ago, for about 20 years following 1980s deregulation of pricing in freight markets, miles pay rose in prominence, given the shock of the post-deregulation rates freefall. The "guaranteed" aspect of miles pay appealed to those who were looking for more predictable income in a market they no longer understood.
That's the thing about percentage pay -- those who excel under it have the ability negotiate their rates with carrier agents or otherwise at the very least exercise load choice to capitalize on local markets where they know supply/demand metrics favor them. There's plenty evidence that more owner-operators are putting that market knowledge into practice.
Owner-operators' pay-package realities, as shown above, align fairly well with stated preferences, too. Polled here at Overdrive around the same time as the recent compensation survey, 7 in 10 owners signaled a strong preference for percentage structures over mileage or even a choice of miles or percentage, as shown.
