In trucking, we see the terms “owner operator” and “independent contractor” get thrown around a lot. They both essentially describe truck drivers who are independent operators and are not legally employed by one carrier company in particular. While these terms tend to be used interchangeably, that’s not always correct. While it is true that all owner operators are independent contractors, there are key distinctions that make some truck drivers owner operators, and others just independent contractors.
When you’re an owner operator, you’re basically an independent contractor who gets to choose who to work with, get the W-9 from all companies you work with, own your own equipment, etc. When it all comes down to the basics, an owner operator is an independent contractor with a business attached to their name.
However, you can be an independent contractor in trucking without being an owner operator. Some drivers choose to lease a vehicle from a larger company and operate under their authority without having to become a full-fledged owner operator. Instead of setting up their own carrier company, a driver would be running with another company and using that entity’s authority. Think of independent contractors like dipping your toe in the water, whereas the owner operators are diving head first.
To break it all down, the biggest differentiator between the two is who owns the operating authority. What is authority? Authority is a designation that every carrier company needs in order to transport goods in the United States. Owner operators have their own authority so that anyone in their business can successfully and legally transport freight. While some independent contractors have their own authority, not all do, so that’s when they look to other companies to work with.
Why do some independent contractors choose not to become owner operators? There are additional expenses – such as insurance, taxes, operating expenses, equipment expenses and more. However, as an owner operator, you get to keep 100% of the revenue generated from each load, whereas independent contractors working for other carriers will almost always have a cut taken out of their earnings due to renting equipment and other expenses.
As an owner operator, you will have full autonomy to find your own freight, make 100% of the earnings, be your own boss and determine your destiny in the world of trucking. If you are interested in becoming an owner operator with CLST, please contact us or submit the form below to get started!
Director of Marketing & Media, C.L. Services Transport