WASHINGTON — A study of public data filed in court cases alleging abuse of drivers participating in truck lease-purchase programs with carriers estimates that the extent of predatory lease contracts in the industry approaches 6% of all CDL holders.
Such rampant abuse by carriers makes the industry less safe by causing qualified drivers to leave the profession, while drivers stuck in such contracts may be more likely to be less safe on the road, according to the Federal Motor Carrier Safety Administration’s Truck Leasing Task Force (TLTF).
“There are many weeks when drivers [in lease-purchase programs] earn very little or no pay at all,” said task force member Steve Viscelli, a research sociologist at the University of Pennsylvania, speaking at a group meeting on Wednesday. “We can imagine some of the stress that puts on people and decisions they’re going to make with regard to safety.”
Litigation data compiled by the TLTF and the Consumer Financial Protection Bureau, a federal agency supporting the group’s work, reveals over 200,000 drivers out of 3.5 million CDL holders who potentially are involved in predatory truck leases – “probably the tip of the iceberg of the number of drivers actually affected,” Viscelli said.
Viscelli’s role on TLTF’s Public Courts Data Subcommittee, which presented its results to the full committee on Wednesday, was to look at driver experiences and how drivers were getting into lease-purchase agreements, the consequences in terms of their career trajectory, and the economic impacts.
“Just a handful of drivers out of thousands that appeared to participate in these lease-purchase programs actually completed them successfully, suggesting that the turnover rates are extraordinarily high and the likelihood of success extraordinarily low,” he said.
“Even when drivers completed them successfully, the available evidence suggests that they were actually working for significantly less pay than they would have as a comparable employee.”
By examining court-case data, Viscelli and the subcommittee found that lease-purchase contracts were structured such that drivers at times were far more productive than the average productivity for a fleet.
“They were working harder, working more days and were earning less than they would have as even a trainee at some of these companies, after meeting those lease costs and obligations for fuel, insurance and other expenses,” he said. “So owner-operators in these agreements were providing these trucking companies a tremendous competitive advantage in terms of labor costs, while frankly working their butts off.”
The TLTF, which was authorized as part of the Bipartisan Infrastructure Bill in 2021, was created by FMCSA to investigate and assess – and potentially regulate – truck lease-purchase agreements. The group was tasked, among other things, with determining if the agreements act as a disincentive to safe operations, including noncompliance with hours-of-service regulations.
“Lease-purchase in and of itself is not necessarily what we’re trying to stop; there are legitimate programs out there,” said TLTF member Kaitlyn Long, director of economics for the Teamsters Union. Long pointed out at the meeting that fellow task force member Joshua Krause runs a truck leasing company.
“The problem is when the entity leasing the truck is the same entity that has an exclusive carrier agreement with the driver, which can lead drivers into a cycle of indebtedness with the carrier where they feel they don’t have any options.”
The task force highlighted a case in which a carrier estimated that only 5%-10% of its lease-purchase drivers successfully completed their leases, and of those who didn’t roughly half ended up being indebted to the company.
The TLTF is formalizing specific recommendations to bring before the FMCSA, including that the agency consider banning motor carriers from offering truck lease-purchase arrangements to independent operators/drivers who are also required to be exclusive drivers for the carrier.
Outside of banning such arrangements, the task force is considering a recommendation that FMCSA provide new rules or statutes that offer restitution and easier avenues for recourse for affected drivers to provide more accountability in the industry, as well as add more enforcement responsibility to FMCSA oversight.
Everette Pullock
I very much understand and I had experience not getting any pay after working with Beverley freight in Chicago Illinois hauling loads for three weeks awaiting the promise they advertise. Because I didn’t take truck which they had deleted the DEF system and I decided to quit .
Israel Nehemiah
The trucking industry needs a overhaul in itself. So many qualified drivers are quitting the industry in droves because the rates are so low you can’t afford to do repairs on you truck if you’re an O/O. Enforce the laws and make these companies open their books so you know what the load really pay. This way everyone is making money and it’s not so one sided.
The companies advertise you can make “UP TO” this or “BETWEEN” That. You start working and that’s when the games start. With so much greed in the industry the roads have become too dangerous. In all the greed driving the qualified drivers to leave and the companies scrambling to put butt’s in seat they forget that they and their families have to get on those very roads that they are making unsafe.
Carlos Fernandez
The Chicago Russian mafia, the Bulgarian gang, n others gangs must to be investigated by the federal. The IRS , making a lot of frauds laundering thousands of millions of dollars. They opening of ocean yards in a Florida , Houston , Dallas n many others city’s the us government should catch those Scumback s n make pay big time.
Robert Smith
I had two bad experiences with lease purchase, and three companies steal pay checks from me. I met some mechanics that said they do stuff to the truck near the end of the lease and the company tell the driver the motor is not good and to start a new lease. One company I lease with gave me a truck that was rolled over and they stuck a new cab on the frame and I found out about it. From the company mechanic.
James Early
I know a company that left a lease purchase drivers truck in the repair shop for over a year because of a warranty dispute.
The driver could have completely finished paying for the truck in that time as it was towards the end of the lease. Yet it sat, they ended up quitting without the truck they worked so hard for so long to get.
Almost all lease purchase programs are 100% predatory, and the companies that run them will 100% do whatever they can to stop a driver from completing them at all costs.
Al
The carrier has the business structure, the freight, owns the truck , owns the trailer. People need to stop and ask why do they want to lease it to me if they can make money operating it. The truth is they can’t make as much as getting you to work for nearly nothing. They don’t have to deal with labor law, unemployment payments, or workman’s comp. They also don’t need to match your fica or Medicare payments.
Garland Trice
Sadly severely years back I experienced this with a company in Jackson Mississippi.. Miller Transport a Haz/mat operation.. Their contract’s all favorable to the Miller Company and Jurisdiction only in Jackson Mississippi,, Yet they sued me in Pine Bluff,, Arkansas I lost at the local level.. But I won in the Appeal Court.. The rule in the lease company was to sale that one (1) truck three (3) times.. Sad. Now hopefully the government will step in and protect so many of the fraudulent contracts that exits,, Owner Operators should be protected. Their are a few good companies.. But the majority of the least to own is questionable without a doubt..
Lora
I say it should be handled as what drivers expect when purchasing a vehicle be car or truck and all laws apply and when it come to predictor lending they should be shut down and fined which goes along with safety