CHARLOTTETOWN, P.E.I. – A research paper presented during this summer’s Canadian Transportation Research Forum in Charlottetown, P.E.I. has concluded that many truckers are not finding the life they’re looking for after they become owner/operators.

Cost of Independence: A Socio-economic Profile of Canadian Owner/Operators concludes that Canadian owner/operators end up working longer hours to cover business-related costs (such as fuel and maintenance), have a lower after-tax income, and face more work-related stress than company drivers who work alongside them.

In monetary terms, the findings of the study are even more discouraging. They found that owner/operators have an average after-tax income (minus all operating expenses) of a paltry $16,000 per year. That compares to the average $26,800 take-home after taxes earned by for-hire drivers and $26,230 collected by private company drivers.

“Despite the long hours owner/operators were working in 1997, about 62 per cent of owner/operators brought home total earnings under $20,000 before taxes,” the study concludes. “The total money income of these drivers was also found to be substantially lower than self-employed individuals in manufacturing, trades, transportation and primary industries ($22,500), and the company drivers employed by for-hire carriers ($33,000) and private carriers ($32,600).”

The paper was written by Irwin Bess, an analyst with the Trucking Section of the Transportation Division of Statistics Canada. Using new data recently released by StatsCan, such as the Survey of Labor and Income Dynamics, and well-established surveys such as the annual Small For-Hire Carrier and Owner/Operator Survey, Bess was able to compare the incomes, work patterns and demographic profiles of Canadian owner/operators and company drivers.

“It was a bit surprising,” Bess says of the results. “But when you look at what owner/operators earn relative to the average income for all self-employed individuals, it is not far out of line.

“In terms of work hours, though, owner/operators definitely are at the upper end in the total amount of hours worked. So, in terms of wages per hour, owner/operators do seem to earn less than company drivers or other skilled workers.”

The freedom of the open road aside, the picture the study paints of the life of owner/operators is not a pretty one. First of all, as independent business owners, they must “invest in capital equipment, acquire debt, pay taxes, interest, and other operating expenses (maintenance, fuel, insurance, meals, etc.).” This, of course, is in addition to earning enough income to cover their personal expenses.

The 1997 For-Hire Carrier and Owner/Operator Survey found that the average Canadian owner/operator takes in operating revenues of approximately $145,000 per year. Average expenses, though, total some $127,000, with almost $16,000 going for fuel, $13,500 going for maintenance and $19,600 for depreciation on equipment. The study found the average owner/operator drives more than 146,000 km per year, burning 67,830 litres of diesel.

To make matters worse, many of the owner/operators’ expenses, such as fuel, maintenance, and interest rates, are variable costs. And as many owner/operators found out with the higher fuel prices of last winter, a substantial increase in any one of these variable costs can render a business unprofitable.

“I think the research showed that there are opportunities to be successful working as an owner/operator,” says Bess. “But there is just as much potential to not be successful.”

Clearly, being an owner/operator is no picnic, and that fact shows up in the study’s finding relating to on-the-job stress. The 1997 labor and income survey asked drivers to assess their level of work-life stress as either “very stressful”, “somewhat stressful”, “not very stressful”, or “not at all stressful”. Almost seven out of 10 truckers surveyed described their worklife as very to somewhat stressful. When considered separately, owner/operators were more likely to describe their stress level as very to somewhat stressful, with 80 per cent responding this way compared to the 66 per cent of surveyed company drivers.

“The levels for the two classes of drivers were definitely different,” says Bess. “The owner/operator is more sensitive to changes in operating conditions. “

Based on 1998 StatsCan data, the study estimated that there were approximately 50,000 owner/operators in Canada – 22 per cent of the entire population of Canadian truckers. n