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Owner-drivers only want to "work", they have nc desire for paper work and this could lead to Mail eventual demise
by lain Sherriff WE should not class all light vehicle owner-drivers as "fly-by-nights" and "pirates" because they are not. Indeed, if the group I met recently are typical, owner-drivers are hard-working men who have fulfilled their ambition to become their own bosses, own their own vehicles and do their own "thing".
In the main, the men I met had been lorry drivers. Some had worked for very large companies but they sought to be free, to do their own kind of work. As one man put it "I wanted to earn a bit for myself." Surely a highly commendable ambition.
Instead of 1973 it might have been 1919, when I met them. In those 1919 post-war days men left the Army and used their bounty money to set up as owner-operators, and eventually they formed the EAT (Ex-Army Transport). It was not the aftermath of a war, however, that brought about the new surge of owner-operators of today but the Transport Act 1968. In October that year, even before the Act became operative, vehicles under 30cwt unladen or 3.5 tons plated were released from all forms of carriers' licensing; they did not need to be plated and tested and although the drivers were bound by the hours' regulations. they were not required to keep journey record sheets.
This was the opportunity that many ambitious men had been waiting for. The chance, at last, to become their own bosses. Many took the opportunity and in the intervening 3+ years their ranks have swelled enormously.
Trouble ahead Alas, I fear there is trouble ahead for these men who were fired with ambition back in 1968. If my gloomy forebodings materialize many of them who were at first so successful may find themselves in difficult circumstances if not out of business before the end of 1973.
The men I spoke to all work through agencies or clearing houses and for reasons which will become apparent as the tale unfolds neither the agencies nor the men wish their identities to be known.
Their principal reason for working through agencies is that they lack either the enthusiasm or the ability to plan. They are aware of their own capabilities, they know their vehicles and they know their geography. All they really want to do is drive.
The proprietors of the agencies are the planners; they know how to get the traffic and organize the men. They have no wish to own vehicles or directly employ drivers. With drivers who just want to drive and agencies who can plan for them it is natural that these two links should come together and form what could be a successful business alliance.
The drivers began cautiously enough in 1969 by ensuring that they could get enough work to keep them going before they acquired a vehicle. Indeed, it is almost as if they had introduced a voluntary carriers' licensing system by getting "proof of need" before they put vehicles on the road.
Although work was assured, not all drivers dashed off to buy a vehicle. Many started by hiring a self-drive vehicle for a few weeks to establish themselves as "operators" and then as their businesses showed promise they took the plunge and bought a van. From that point they accepted the fact that there could be no turning back. They were committed financially and this was their spur.
Determination, pride, ignorance or perhaps a mixture of all three kept them going. Today all of them are still working, none has fallen by the wayside, but for many the critical period is approaching — and fast.
Where's the money?
Those who started off with a new vehicle 3+ years ago — I did not meet any who started off with a second-hand vehicle — are now considering replacing them. But I wonder what they will use for money.
Because they are not planners they have neglected to make an allowance for depreciation in what they describe as their costings. The vehicles are now coming to the end of their economic life but there is no money in the kitty to buy a replacement.
The agency pays the typical owner-driver by cheque each week or each month and at the end of the month he sees a substantial credit balance on his banker's statement. In many cases the balance almost equals the original price of their first vehicle.
"But," said one man, "the van I bought in 1968 cost me £1250. Today the same van is costing over £2000."
These drivers have only one bank account and it is used to provide for the family and the business. Not unnaturally as the bank balance grows the family's standard of living improves — but this weakens the business position.
Only one operator to whom I spoke had paid cash for his vehicle, the rest had bought them on hire purchase. The monthly payments were wrongly identified in theil minds as an allowance for depreciation ant certainly they were unable to mak4 provision for both. When the HP payment: finished the additional cash flowing ir became available for other things but no: for a replacement vehicle. Nor have the mei made adequate provision for repairs cost: for an extended life.
Unfortunately, a 3+-year-old 30ewt vat demands quite a bit of repair. At the sam■ time its residual value is unlikely to amoun to the deposit needed for a lieu hire-purchase deal for a replacement van This means that there is insufficient cash ii the account or in assets to put down agains a new vehicle or keep the existing vehicle it the best condition.
No answers None of the 14 to whom I spoke had at answer to this problem. In the short term they said, it was a case of leavim replacement for a few more months an repairing the vehicle after a fashion in thi meantime. But many of them admitted tha this was only putting off the evil day. Other said that "something may 'turn up' ". It ma or may not, only time will tell.
Another aspect of owner-operation whici gives the observer cause for concern is ail inability of the driver to keep records Perhaps it is not only his inability, it may bi his lack of enthusiasm or his failure tt appreciate the importance of maintaininl records. Whatever the reason none of thi men I spoke to had anything vaguel3 resembling a maintenance record system.
The best system I encountered wa; dog-eared copy invoices for fuel, oil, spare; and services and a notebook. All of du invoices were promptly paid and correct13 receipted but none of them was recorded. A best these owner-operators are dependini on these documents and mental arithmeth to work out their fuel consumption and thi: is done only to ensure that the fuelling poin has not overcharged them for fuel. Not, yot will note, to check on engine performance a check on tyre costs. This requires progressive record if it is to serve an purpose and such a record to these men about as intelligible as an astronaut': check-list would be to me.
Personal interest At a time when full productivity fain' vehicles entails two, three or even four mer driving the same vehicle in a week, it was ar experience to meet men who regard then vehicle as something very personal, then
try own. They tend them in a manner eminiscent of the old horse-traffic days vhen the carter groomed his horse and Polished its harness in his every free noment. I looked under the bonnets of hese light vans and all of them gleamed like 7ormula One engines before a Grand Prix. 'If it's a choice between a hair-do for my vile or a cylinder head gasket for the ;ngine," said one man, "then the van wins — it earns the money."
Most of the men had been long-distance Irivers before they became self employed .nd all of them are capable of doing their own repairs on the roadside. They change oil, light bulbs and tyres and do their own Teasing. The major tasks, and this includes very job on brakes, steering or engine, are oassed out to professionals.
"We cannot afford to pay distributor's ates for repairs," they said. "We have them one by the backdoor." They buy in the naterials and then find a back-street epairer who will use them as labourers to ssist in carrying out the repairs at light time or at weekends, thus reducing the ost. Another system is to engage the ervices of a mechanic — sometimes a listributor's man — when, of course, he is if duty.
This gets the job done and keeps the ehicle running because these men cannot fford to be off the road when there is work o be done. "If the repair takes the vehicle if the road for one day, it costs £15 more ban the cost of repairs, because that's what re normally earn in a day," said one driver. When it comes to earning there is no one lore knowledgeable or alive to the situation nan the owner-driver. Each of them makes is own arrangement with the agent and is aid on either time and mileage for local work or receives a rate for the job for long-distance work. There is little variation in the rates which are around £1 per hour plus 5p per mile in excess of 5 mph.
If a man operates for 10 hours and covers 200 miles in a day he will earn £10 on the hourly rate plus £7.50 on the excessmileage rate and this will give him gross earnings of £350 per month. At the end of each period — some work weekly, others monthly — the drivers submit their accounts to the agent who checks their time and mileage against his own records.
In some cases the agent makes out the invoice for the man who checks it and returns it to the agent for payment. Agencies and drivers agree that invariably their figures coincide first time. At this point the agent hands over the cheque for a gross amount. Here again there is confusion in the mind of the owner-driver. He does not take account of the day when work may not be available. As a self-employed man he has certain obligations but few seem to have recognized them.
Owner-drivers fail to make allowances for any deductions. There is no question of making provision for sickness, holidays, income tax or other not too apparent expenditure.
As long as the bank balance grows each month many are happy but none has any idea of how much the balance should grow.
One man I met said that he knew he should be keeping books but even after three years he is still not doing so. "I think I'll get an accountant to sort out my tax affairs," he said.
Where system fails Most of the men shy clear of accountants, because, they told me, they could not afford to pay accountancy fees. But this is where the system is breaking down. On the one hand there is the driver, on the other the agent — the missing link is a financial administrator.
Now it is likely that they will all be drawn up short. If VAT does nothing else it is likely to drive these men into the arms of an accountant who will have to solve more than their VAT problems. At the moment they are just on the edge of the £5000 VAT boundary line. An increase in earnings of 3p per hour — and this is likely when the freeze comes off — will put most of them over the boundary and thus make them liable for VAT calculations in their charges.
Success and failure are separated in most walks of life by a very fine dividing line. In the case of these owner-drivers I see that dividing line as paper work. It is paper work which produces proper accounts and records of vehicle performance, maintenance, servicing, and costings. They need someone to keep their records for them and arrange their accountancy affairs but although they may accept this in principle they fear that putting theory into practice could mean they have to form themselves into a large group and lose their identity.
I believe it is important that the owner-operator survives; there is, I am sure, a place for him on the transport scene. They carry the smalls traffic that the more sophisticated carrier does not look for and in addition they have the incentive to provide that personalized service which is so often lacking in the company-employed driver.
Without assistance these men will disappear but if they do there are others who will step in for a short time to supply the service that they are supplying so well today — we are not short of ambitious drivers. Unfortunately the likelihood is that the replacements will also disappear unless someone can forge the necessary administrative link in the chain.