Moral Hazard problem in a small business

[skindog]

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Have the OOs figured the net effect of bribes+better loads into their earnings? Does that make them better paid than the industry average?


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They have not. This is not a common practice at my company (yet). My manager/salesman is also very good at booking loads, so we usually have good loads to give out no matter what. I just take the better ones - the difference is anywhere from $100-$500 per load.

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If you change the load designations so that they don't get the most profitable loads, will they still earn enough to stay with you? Or will you risk them leaving for something better?


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I'm pretty sure they will. I've had owners make 80-90k with my legit loads, so they're not exactly living on scraps.

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If your own trucks are more profitable than the OOs, why are you looking to increase the number of OOs? Are they profitable enough to generate cash flow to help you increase your own fleet?

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Exactly what you said - they generate cash flow that I don't need, but I like very much. It's a risk/reward thing - I get a lot of money and relatively few hassles compared to my own trucks. I bypass financing, insurance, workers' comp., taxes, etc. etc. etc. - all I have to do is coordinate the shippers, receivers, and OOs and I earn 10% (usually ~$500/week)