Here we go with Driver Inc. again ...

[Michael Ludwig]

Normally I am not a fan of Mike McCarron's writing, but WOW, this time he hit the nail on the head and has written, for Truck News, one of the most brilliant articles I have seen in quite some time.
Read this article, twice. What it says is of vital importance to all of us ... ALL OF US !!!

Driver Inc. fight may be a lost cause - Truck News

When I sold my trucking business in 2012, a one-page filing mistake landed me a seven-figure headache. Eleven years and three court dates later, Canada

www.trucknews.com

 

[SSH123]

My good friends a nurse who works at a hospital in Ontario. The hospital refuses to hire her as an employee, instead they made her open a corporation and hired her as a contractor.

Even FedEx is pushing in a direction where the company drives are no longer on payroll. They want their drivers to be incorporated.

FedEx Overhaul Contemplates a Future With No Drivers on Payroll

FedEx Corp. is ripping up founder Fred Smith’s well-worn playbook as it rethinks virtually the entire business. That could mean the end of FedEx drivers as we know them.

www.bloomberg.com

 

[Upper Ech]

My good friends a nurse who works at a hospital in Ontario. The hospital refuses to hire her as an employee, instead they made her open a corporation and hired her as a contractor.

Even FedEx is pushing in a direction where the company drives are no longer on payroll. They want their drivers to be incorporated.

FedEx Overhaul Contemplates a Future With No Drivers on Payroll

FedEx Corp. is ripping up founder Fred Smith’s well-worn playbook as it rethinks virtually the entire business. That could mean the end of FedEx drivers as we know them.

www.bloomberg.com

i'm seeing it even in the cleaning industry. companies wont take on Janitors until they are incorporated and have their own insurance.

 

[Freight Broker]

This why so many companies have such a wonderful facade online... their shares trade on Wall Street.. they've been in business for five years and are already making billions in sales.. BUT.. at the end of the day the service provided boils down to a poor "contractor" pedalling an old bike with a huge pack on his back.

 

[JACKBURTON]

I am wondering if freight brokers ever look into this when hiring carriers? Not sure if it's possible, but surely "too good to be true" rates might be a bit of a giveaway?

 

[Melroy75]

My good friends a nurse who works at a hospital in Ontario. The hospital refuses to hire her as an employee, instead they made her open a corporation and hired her as a contractor.

Yep doctors too, its called a "professionals corporation". I believe its to shield the hospital from any liabilities if/when a doctor or nurse messes up.

 

[Melroy75]

I am wondering if freight brokers ever look into this when hiring carriers? Not sure if it's possible, but surely "too good to be true" rates might be a bit of a giveaway?

well the problem lies right there in the wording, Brokers don't "Hire Carriers" they "Broker Freight".

 

[Michael Ludwig]

I am wondering if freight brokers ever look into this when hiring carriers? Not sure if it's possible, but surely "too good to be true" rates might be a bit of a giveaway?

No, they don't, and why should they? It's none of their business how the carrier pays the driver.

 

[JACKBURTON]

No, they don't, and why should they? It's none of their business how the carrier pays the driver.

Well a wise man once said-- " What it says is of vital importance to all of us ... ALL OF US !!!"

 

[missy_519]

What happens when one of these Driver Inc. service drivers gets hurt on the job. Do you they go to WSIB or do they carry a supplement health package? If they don't are companies they are entering and working for know they do not have proper coverage? I know the answer to this question......

 

[Michael Ludwig]

Thank you for the compliment ... LOL

What McCarron says is 1,000% the truth. If you are a trucking company in Canada, especially a small to medium size carrier, you will have to pay by Driver Inc. if you want to survive. Conservative estimates indicate 25% of the Canadian carrier base pays by Driver Inc. Almost 100% of them are immigrant companies ... not that there is anything wrong with immigrant companies ... and they are redefining the industry as we know it. The simple axiom "Lead, follow, or get out of the way" totally applies here. Right now, legacy carriers have to chose to follow or get out of they way because we certainly are not leading.

Load brokers do just what their title suggests ... broker loads. They are not the payroll police.

I am sure there are a lot of you out there saying Driver Inc is immoral. Morality is a moving target that is almost impossible to hit. Someone somewhere is always thinking something is immoral. 30 years ago it was immoral to be gay. 20 years ago it was immoral for women to go topless. 10 years ago it was immoral to job hop.

What happens when one of these Driver Inc. service drivers gets hurt on the job. Do you they go to WSIB or do they carry a supplement health package? If they don't are companies they are entering and working for know they do not have proper coverage? I know the answer to this question......

I'd be very interested in hearing your answer.

 

[Freight Broker]

The Driver Inc. driver would be required to obtain his/her own WSIB number and coverage. Thus, if he/she is hurt on the job then his/her WSIB would come into play. If I were hiring drivers as contractors I would require them to provide WSIB Clearance Certificates.. same way as I would require one from a contractor who does work on my house. Clearance Certificates may also be construed as tacit admission by the government that the driver is indeed a subcontractor.. i.e. if the driver's status is ever challenged by another government body (by the CRA for example) the carrier can alway state that WSIB considers him/her an independent contractor.

 

[loaders]

As Michael correctly stated, freight brokers are not the payroll police and what a carrier pays their drivers, or what they pay for new trucks, or whether they rent or own their offices, is none of the brokers business. However, every freight broker should be asking for and receiving WSIB (or similar provincial body) clearance certificates from every carrier they hire. In the event of a non covered driver being injured on the job, WSIB can and has assigned that injury and its associated costs to the account of either the shipper or the freight broker. Just another possible liability concern we have to be aware of.

 

[Michael Ludwig]

However, every freight broker should be asking for and receiving WSIB (or similar provincial body) clearance certificates from every carrier they hire.

Here's where it could get tricky for load brokers though ... suppose I take a load from you and supply you with my valid WSIB clearance cert. You think you and your shipper are covered and all is good to go. But, I'm a Driver Inc. carrier and our only employee is me. All of my drivers are Driver Inc. and may, or may not, have WSIB clearances. There's no way for you to ever know. It's going to be a minefield.

 

[JACKBURTON]

Here's where it could get tricky for load brokers though ... suppose I take a load from you and supply you with my valid WSIB clearance cert. You think you and your shipper are covered and all is good to go. But, I'm a Driver Inc. carrier and our only employee is me. All of my drivers are Driver Inc. and may, or may not, have WSIB clearances. There's no way for you to ever know. It's going to be a minefield.

I think it's a "cover your own ass" move. Any document can be forged or falsified.

 

[loaders]

I am not sure I would call it a “cover my ass” move and yes, almost any document can and has been forged. It is however, one important step of a multi step process in vetting new carriers and maintaining current records on existing ones. Excellent point Michael, that a Driver Inc carrier could register with WSIB and have just a couple of office staff or perhaps a mechanic as actual reporting employees. There would be no way for a shipper or freight broker to know with certainty that the driver was actually covered. Again, most precautions are not meant or designed to prevent a fraudulent or criminal action although they can and do help, they are employed to demonstrate that due diligence was exercised.

 

[Capner]

I find it amazing how, as a country, which I love and find amazing every day, we cannot enforce our own rules and laws. We have this need to "bend" as if to make people happy or not to offend. We don't want to admit it but, as Mike says, Driver Inc is here to stay. For a moment, lets think about that. This is not Driver Inc, this is Worker Inc. The government condones this in transportation, why not manufacturing, retail, warehousing, construction etc. How can they say it only applies to one industry.

Government is basically saying to the whole country... "It's fine, you don't need to collect taxes. I'm sure everyone will do what's right and pay us what they should. Oh and don't worry about CPP, EI, WSIB or any of that nonsense. We've got lots of money saved to support all that and probably won't need any of those programs in the future anyway".

Some days it can make you wonder.... I am still a very proud Canadian, love this country and what it stands for but...it is changing fast.

 

[Michael Ludwig]

Nefariousness aside, this will require some thought.
First of all I'm not certain how a load broker could CYA.
Second, due diligence is meaningless when MOL (Ministry of Labour) or LC (Labour Canada) become involved. Their modus operandi is "Someone's gotta pay.".

@Capner is right. Technically it's Worker Inc. What would happen if this was turned loose on the the Ford Oakville plant, or at Canadian Tire, or, for that matter ... Loblaws !!! Not to mention CN or CPKCS. What if PSAC decided to drop their strike in favour of "Worker Inc."?
What a shit show we'd have then.

From a political point of view, there are way too many votes at stake now for any political party to publicize putting an end to it.

 

[loaders]

Regardless of how your due diligence might be perceived by government authorities, or even a hungry personal injury lawyer for that matter, it has been my experience that being able to demonstrate that you/your company took steps to mitigate any possible liability is infinitely better than having done nothing at all. As I mentioned earlier, taking these steps may not prevent the fraud, accident, whatever from occurring, but they will can minimize the effect/cost to some degree.

 

[Mario]

The Drivers Inc model is nothing new. This has been used in other industries for years and will always exist. As a lot of big and small companies and goverment agencies, everyone uses the " Grey Area" of legality. Why is it when this stuff is being pushed to mainstream in trucking the words level playing field always come into play by the big carriers trying to squash it? Seen the same wording with speed limiters and E Logs.