Are you new to trucking and don't know the difference between an independent contractor and an owner operator? Have you been here awhile but are afraid to admit you don't actually know the difference? Do you think you know the distinctions, but just want to check to be sure? No matter your familiarity with the industry, this blog is for you! Read on to find out the difference!!
It's Kinda a Trick Question
Sorry if you feel betrayed by the slightly misleading title of this blog, but an owner operator and independent contractor are basically the same thing!
Essentially, owner operator is the trucker lingo term used by truckers themselves, while independent contractor is the legal term that the IRS uses. When we use owner operator here on our site, we are referring to drivers who operate as independent contractors.
That Doesn't Mean There Aren't a Few Variations, Though!
Owner operators can either lease onto a company, which means that they own their own truck but essentially only drive for one carrier, or they can choose not to lease onto a carrier. The latter means they have their own authority and find their own loads.
Think of this in a different context: if you are building a new house, and your builder hires an independent contractor to install the siding, it is under the assumption that they are working for you today. Then, as long as they finish the job and follow the basic rules, they are free to work for your neighbor tomorrow.
That independent contractor who did your siding might choose to find his own siding jobs, or he might have a relationship with a builder who channels him work. He is still independent and can refuse jobs, but the close relationship with the builder means consistent work for him, and it helps the builder to know who will be doing the siding for his projects.
The same is true in the trucking industry. An independent contractor is free to find their own loads and the company they're hauling for cannot tell them how to do their job (at least within reason—things like safety laws can be exceptions) as long as they get the job done right. The owner operator gets to decide the route they take, they don't have to wear company uniforms or use your company logo, and they control their workload.
Make Sure You Know Your Responsibilities
Although they are one in the same, how each individual company classifies owner operators and independent contractors can vary slightly. Make sure you are clear on what the company expects of you as well as your legal rights before you sign anything; and make sure you understand what is required of you in terms of insurance, income tax, workers' comp, and social security so that no problems arise in the future!
If you are looking to become an owner operator / independent contractor, check out our helpful tips on how to get your business started.
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