Although the publicly available data is limited, court cases involving predatory lease-purchase agreements in the trucking industry provide a glimpse into the severity of the problem.
As part of the Federal Motor Carrier Safety Administration’s Truck Leasing Task Force meeting on Wednesday, Oct. 30, the Public Court Data Subcommittee presented a report on what the accessible cases reveal about agreements where a motor carrier leases a truck to a driver but still largely holds control over the operation.
“Conservatively, over 200,000 truck drivers have been affected by predatory truck lease-purchase programs,” the subcommittee report stated. “Hundreds of thousands more drivers are likely affected but lack the resources to hold the carrier accountable for its bad practices.”
Steve Viscelli, a task force member and economic sociologist at the University of Pennsylvania, reiterated that 200,000 drivers is likely “just the tip of the iceberg.” Despite the limitations, Viscelli said the cases provide lots of useful data.
“Turnover rates are extraordinarily high, and the likelihood of success is extremely low,” he said. “Even when drivers completed these agreements successfully, they actually were working for less than they would have made as an employee. There are many weeks where drivers earn very little or no pay at all. That puts stress on drivers in terms of whether they stay in the industry but also for the choices they make in terms of safety.”
Kaitlyn Long, task force member and chief economist for the International Brotherhood of Teamsters, said that court data helped the subcommittee reach several conclusions:
- The current system is set up to harm drivers.
- There is a financial incentive for trucking companies to continue the practice.
- It harms the entire supply chain and drives down wages.
- Litigation is currently a driver’s only avenue for relief.
- Driver education needs improvement.
The subcommittee also made several recommendations:
- Create new rules for restitution or recourse.
- Increase education for drivers before they enter such agreements.
- Create protections for drivers to unionize or pursue more favorable agreements.
- Ban agreements where the entity that holds the debt over someone also controls whether the person is able to pay off the debt.
The task force, which was established by Congress with the goal of ending predatory lease-purchase agreements in the trucking industry, started in 2023. Since that time, numerous stories of truck drivers getting into bad deals with motor carriers have been relayed. In these predatory lease-purchase agreements, a carrier leases a truck to a driver but still largely holds control over the operation, including the driver’s ability to pay off the loan. It is common for drivers to report owing money to the carrier at the end of a pay period.
The Truck Leasing Task Force is expected to have its next meeting on Nov. 20. LL
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