Owner-Operator vs. Company Driver: What’s the Difference and What’s the Better Option?

Company truck driver or owner-operator

Last Updated on September 1, 2023

Owner-operator vs. company driver is a common debate in the trucking industry. Which one pays more? Which one requires more work? And ultimately, is it better to be an owner-operator or company driver?

There’s no one size fits all answer, but by taking some time to better understand the differences, you can decide which is best for you.

What is an Owner-Operator?

An owner-operator is a self-employed truck driver who owns or finances their own commercial truck. They work as independent contractors who can set their own hours and schedule.

Owner-operators either operate under their own authority, meaning they are responsible for essentially all aspects of their business, including finding loads to haul, or they lease-on to a carrier, who assists with finding loads and managing paperwork.

Regardless, many successful owner-operators began as company drivers, incorporating the skills and tips they learned while driving for a company.

Responsibilities and Requirements of an Owner-Operator

One of the biggest differences in owner-operator vs. company truck driver comparisons is the level of responsibility associated with each role.

As an owner-operator operating under your own authority, you are responsible for all aspects of running your business. This includes:

  • Paperwork and scheduling
  • Maintaining equipment
  • Managing your fleet and employees (if applicable)
  • Tracking profits and expenses (including calculating cost per mile)
  • Taxes and insurance
  • Finding and booking loads
  • Staying compliant with driver and business regulations
  • Managing cash flow
  • Negotiating payment terms

To become an owner-operator, you’ll need to obtain the following:

With these in place, you’ll be able to develop a trucking business plan and start finding loads.

How Does an Owner-Operator Get Paid?

Owner-operator truck drivers are usually paid by mileage or a percentage of the load’s value. Regarding percent of load terms, owner-operators may be paid anywhere from 25% to 85% of the gross load revenue. Pay tends to be more volatile then mileage-based pay — though it can also be more lucrative. Owner-operator vs. company driver pay tends to lean higher toward owner-operators, but there is more risk if you aren’t able to get loads consistently.

Owner-operators often use freight factoring to cover operating costs. Freight factoring is commonly used because it alleviates the frustrating process of chasing down unpaid invoices. Instead, unpaid invoices are sold to a freight factoring company for a cash advance. Owner-operators are paid the bulk of the invoice value upfront, and receive the rest after the invoice is paid, minus a small factoring fee.

What is a Company Truck Driver?

A company driver is an individual who works as a driver for another trucking company. As an employee, they receive standard employee benefits in addition to an agreed-upon salary.

Responsibilities and Requirements of a Company Truck Driver

Company drivers have fewer responsibilities than owner-operators. Their schedules and loads are determined by their employer, who also handles truck maintenance and other back-office activities. Company truck drivers’ focus is mainly on transporting loads to their destination in a safe and timely manner.

You’ll need to meet the following requirements to become a truck driver:

  • Obtain a commercial driver’s license (CDL)
  • Be at least 18 years old for in-state driving, and 21 for interstate driving
  • Have a clean driving record
  • Pass a background check
  • Pass a medical exam and periodic drug testing

Some companies may also require that you have a high school diploma or obtain extra endorsements to carry certain types of cargo.

How Does a Company Truck Driver Get Paid?

Employers offer a variety of payment options for company truck drivers to determine how much you get paid per load, such as pay per mile, hourly pay, guaranteed pay, detention pay, and so on. Company drivers are usually paid weekly, though this varies from company to company. However, overall, salary is much simpler for company drivers vs. owner-operators.

Owner-Operator vs. Company Driver: Similarities and Differences

These owner-operator vs. company driver comparisons can help you decide which option is best for you:

  Owner-Operator Company Driver
Main Responsibilities All aspects of running a business. For trucking business owners, this also includes: driving, paperwork, maintenance, taxes and insurance, booking loads, negotiating rates and more Drive your truck, keep it clean and report maintenance issues
Expenses Taxes, insurance, repairs and maintenance All work-related expenses are covered by your employer
Schedule You choose the schedule that works best for you Your company sets your routes, though sometimes, options are made available to choose from (pertaining to times, routes, loads)
Pay Owner-operators tend to earn much more than fleet drivers since they can negotiate their rates Typically paid per mile or per hour. Income is consistent, but lower than owner-operators

Owner-Operator vs. Company Driver: Which is the Right Fit For You?

Deciding whether being an owner-operator or company driver is right for you ultimately comes down to your career goals and preferences. As an owner-operator, you have total control over your work — but you also have a lot more responsibility as a business owner. For some, the extra income is worth the extra work and stress. For others, the stability that being a company driver provides, along with being able to focus solely on driving and getting consistent pay, makes remaining a company driver more worthwhile. Carefully consider your own preferences, and you should be able to figure out which is best for you.

FAQs

Does an owner-operator or company driver make more money?

With an average yearly salary of $320,165, owner-operators can earn significantly more than company drivers. Per Indeed, the average annual salary for a CDL is $59,925.

However, when comparing owner-operator vs. company driver salary, it’s important to remember that owner-operators are responsible for their own taxes, and expenses, and insurance (both business-related and personal). Company drivers have all work expenses covered by their employer and are typically provided with good insurance and other benefits.

Is an owner-operator an independent contractor?

Yes! Owner-operators function as their own trucking business, which qualifies them as an independent contractor.

Is being an owner-operator worth it?

There’s no right answer, as it’s truly subjective. For many, the potential higher earnings of being an owner-operator and the ability to have full control over a business are well worth it. However, you have a lot more responsibility, like managing paperwork and scheduling, maintaining your equipment, staying compliant, covering expenses, and finding profitable freight. It’s a lot of work, so it ultimately comes down to your goals and disposition.