How do owner-operators get paid? Both ways explained.
May 5, 2020
There are basically two leasing models owner-operators utilize to generate revenue: percentage of the load and mileage.
How owner-operators get paid, through either percentage revenue of the load or by the mile, really boils down to how they get their loads.
Percent revenue of the load
Owner-operators who earn revenue by receiving a percentage of the loads they haul, often get their loads by leasing-on with a company or getting loads from a load board.
For example, Van Truckload owner-operators who lease-on with Schneider select the loads they want to haul from the company’s private load board and then receive 65 percent of the revenue from the load, plus 100 percent of fuel surcharge and accessorial charges. If the revenue of the load is $1,000, then the owner-operator who hauled it would usually receive about $725.
Benefit of percent revenue
The benefit of getting a percentage of the revenue is that, in many cases, you can generate a higher revenue without driving more miles, depending on the market price of the shipment.
Owner-operators who fall under a paid by the mile model, must run more miles and burn more fuel to increase their revenue.
The second way an owner-operator can generate revenue is by the mile. Owner-operators who earn revenue on a paid by the mile basis often get their loads through a dispatcher.
Mileage revenue is pretty self-explanatory. For example, an owner-operator could make $1.35 per mile on a load that requires 300 miles of driving. $1.35 multiplied by 300 miles is $405. Mileage rates can vary.
Benefit of mileage
The benefit of being paid by the mile is that your rate per mile generally stays the same, regardless of how much the trucking company you contract with makes on their load invoice.
Typically, with paid by the mile models, owner-operators are assigned to their loads and don’t have a whole lot of say in what they do/don’t haul. Whereas, when owner-operators generate revenue through a percentage lease contract, they often pick their loads from a public or private load board.
Bring in the revenue your business needs.
Schneider’s private load board for VTL and Tanker owner-operators means you can take control of your bottom line. Many owner-operators who lease on with Schneider make $800-$1,000 in revenue a day.