Nascar Racing – Drivers & History

The race between UPS and FedEx Ground to win more market share is just as hot and as fast as NASCAR Dale Jarrett in the UPS car and Jason Leffler drove the car FedEx.

More than just competition between companies is a fight between two business models. A company hires employees with benefits and protections under the law. The other company saves up to 30% by classifying its drivers as independent contractors (CI), which they claim are their own business.

What delivery driver is an employee? Which is an independent contractor? Both wear uniforms. The two trucks traveling in flying colors and logos company.

Answer: FedEx Ground operates a model independent contractor and hiring UPS employees only.

By offering attractive benefits packages and higher salaries, UPS argues that loyalty and satisfaction results of their employees at a higher level of service to their customers. FedEx Ground counters that the way they motivate drivers to work harder and more intelligent to make a profit.

"The business model we use is good for our subcontractors," FedEx CEO Fred Smith said. "It what freedom About. We have seen that entrepreneurial opportunity to thousands of contractors to own, grow and develop their own affairs. "

Drivers with multiple contracts or routes can earn over $ 100,000 and even hire their own employees. They are independent, autonomous and are not monitored. If customers are happy, FedEx is happy. No boss looking over their shoulder to tell what they are their own boss.

The disadvantages include no benefits, no overtime pay, sick leave, vacation or insurance and pay for all drivers: the truck, gas, maintenance, supplies, uniforms, insurance. Social Security benefits at retirement will be less because taxes are not collected while working as an IC. The amount of freedom is not much either when drivers have a really one customer: FedEx.

Annette Craig, of King of Prussia, PA worked 16 to 18 hours a day on a journey through some high-crime neighborhoods Philadelphia. It does not earn overtime as a CI and was not eligible either for the workers' compensation after struck by a car while providing FedEx. The company has terminated its contract weeks later and then repossessed his company sponsored truck. Now, she is homeless and staying with a cousin and with friends while her daughter lives with her family in Florida.

Working at UPS as an employee has its advantages and disadvantages too. The drivers have job security, good benefits and a contract Teamsters union and collective bargaining. Gasoline, maintenance, insurance and all other costs are paid by the company, the average tenure is over 16 years and nearly all pilots are hired within the company.

Everything is carefully planned and controlled, for good and bad. One rule is that drivers reversing the truck should get the key contact and keep the teeth down, except one or two seconds to start the truck.

On the negative side, the top salaries of around $ 70,000, and it may take four to twelve years to get a job as a driver after joining the company. Those of the Union shall also come with the possibility of a strike and stop working, as in 1997.

The appearance that FedEx contractors are actually employees without lead to practical benefits of working for FedEx investigated in 25 states and a class action covering drivers in 20 states. FedEx said it May have to pay 319 million dollars in back taxes and IRS penalties for misclassification of workers 2002. The IRS has also audited the trucking unit to FedEx from 2004 to 2006 and the potential liability could be 1 billion dollars.

In July 2004, Los Angeles County Superior Court Judge Howard J. Schwab ruled that contractors with multiple paths are entrepreneurs operating a legitimate business. Single-route contractors but it should be classified as employees. FedEx disagree with the decision but if it holds up, they will either have to reclassify contractors to a single route or change employee relations are less restrictive and controlling, allowing drivers to be true independent contractors.

What do you think? FedEx is the right to be able to contract with adult consenting sane or FedEx is wrong to take advantage of drivers desperate for a job?

Next issue: Information Act IRS and what it means for all workers.

 © 2008 Bob Carstensen

Bob Carstensen

Dale Jarrett wins his first NASCAR cup race at Pocono in 1995

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