OOIDA offers recommendations on how to address lease-purchase problem

Calling it a longstanding problem in the trucking industry, the Owner-Operator Independent Drivers Association is supportive of efforts to end predatory lease-purchase agreements.

Mandated by Congress in 2021, the Truck Leasing Task Force was created to crack down on these arrangements that often take advantage of the driver and exacerbate the industry’s turnover problem.

In these lease-purchase arrangements, a motor carrier owns the truck and leases it to a driver who works for the same carrier. Although the carrier often promises independence and eventual ownership, success stories are rare. In fact, there have been many reports of drivers owing money to the carrier at the end of a pay period.

“While the purported goal of these agreements is for the driver to own the truck and become a full-fledged owner-operator at the end of the lease, the agreements rarely work out that way,” OOIDA wrote in recent comments to the Federal Motor Carrier Safety Administration. “In the end, drivers are paid pennies on the dollar with little chance of owning the truck and zero independence. This system pushes individuals who desire a career in trucking out of the industry and further contributes to driver churn.”

OOIDA provided several recommendations to the agency on how to address the problem:

• All leasing agreements must include language explicitly defining exclusivity with the lessor.
• Leasing agreements must include a documented financial structure that fairly demonstrates the progress of lease payments.
• Leasing arrangements must contain protections to prevent individuals from being coerced into signing contracts they do not understand.
• Federal agencies must establish a centralized office to ensure compliance with leasing regulations and provide oversight of lessors.

OOIDA, which represents small-business truckers, said many of its members and other drivers have been victimized by these predatory arrangements and supports the task force’s effort.

“Lease-purchase agreements are nothing more than inequitable financial scams that push individuals who desire a career in trucking out of the industry and further contribute to driver churn,” OOIDA wrote. “We urge the Truck Leasing Task Force to consider the recommendations outlined in these comments as the advisory group continues their deliberations and submits their final report.” LL