Like others looking for workers , Gold Rush ’ s cost has gone up in the last 12 months . “ There is so much competition for employees . It ’ s very easy for anyone to get employed right now . We have done our best to be proactive with our wage increases . I had employees tell me they have had opportunities to leave for more money , but they didn ’ t because they are happy here and we care about them . Those words are music to my ears !”
She offers these suggestions to carriers looking to recruit and retain employee drivers : “ We look at ads from our competitors like Amazon to see how we could better attract employee drivers . We also look at other ads to see what catches our attention and what we like . The key is to never stay the same and to always think you can be better than yesterday . You might stumble a little , but that ’ s got us here so I ’ m sticking with my own advice .”
In Defense of the IC Model
Xcel Delivery in Phoenix and Tucson , AZ operates under the IC model . Chief Operating Officer Tim Cocchia believes in the IC model because he sees it as a way to reward those drivers who are go-getters . Xcel uses 80 ICs to deliver anything from small parcels to heavy freight . They provide expedited deliveries same-day and next-day , offering white glove , medical , TSA and banking delivery services .
Cocchia points out that the use of ICs came later in the development of the delivery sector . “ At one point , most people in our business used employee drivers , paying them hourly wages , and giving them mileage reimbursements ,” he says . “ In fact , this association was heavily involved in defending its members ’ rights to pay drivers this way . But gradually , the economics of that model caused people to start converting to independent contractors . In some sense , it was for dollars and cents . In addition , people started to see that the motivation of an independent contractor and an employee driver is very different .”
In 2001 , Cocchia worked for
Canyon State Courier and converted from an employee driver model to an IC one . “ A lot of our drivers questioned why we were making the change ,” he recalls . “ I distinctly remember a Friday night standing in our warehouse with 100 + drivers in Phoenix explaining why they were all getting laid off and why this was good for them . This is the story I told : Let ’ s say there are three employee drivers . The first driver is really dependable and hardworking . She runs a route that should take eight hours to complete , and she finishes it in six with no mistakes . We try to find her another two hours of work and she gets paid for eight hours . The second driver is someone who runs that same route in exactly eight hours and does a fine job . He gets paid for eight hours . The third driver is one who does just enough to keep from getting fired . He typically runs late and gets that eight-hour run done in nine hours . Then , because he ’ s not too careful , he ends up spending another hour going back to fix something . He ends up getting paid for 10 hours , including two hours in overtime . The company looks at those three employees and says , ‘ The incentives are all wrong here . The driver who does it right and does it fast gets paid the least .’”
He contrasts the compensation of the same three drivers as ICs this way : “ The first driver runs her route in six hours . She gets paid for that job and she now has time to go back out to earn more for additional jobs . The second driver takes eight hours to complete the run and is only paid for one job . He ’ s making less than the first driver . Finally , the last driver , the one who takes longer to do the job and likely has to spend more time going back to fix what he did , still gets paid for completing the route like the others but spent more of his time to make that money . In the end , the driver who did it quickly and correctly makes more money in less time than the other two .”
Cocchia ends his case for the IC model this way : “ The customer wants it done right and as quickly as possible . The IC ’ s incentive is to do it right and as quickly as possible . We want it done right and as quickly as possible . So , the incentives and motivations all line up for us when we operate under the IC model .”
26 customized logistics & delivery Magazine spring 2022