The Road Safety Remuneration Tribunal may have been put together with the best of intentions, however it has failed those it sought to protect. The correlation between safety and owner-operator driver’s pay rates was determined by the National Transport Commission after a 2008 investigation into the underlying causes of unsafe practices in the road transport industry. The argument being that if these contract drivers are paid a secure minimum wage then they would be ‘safer drivers’ because they would spend money on ensuring their vehicles were maintained properly and would reduce their work hours, thereby reducing fatigue. Unfortunately, the only likely outcome of the introduction of a minimum wage would be to price owner-drivers out of the market and create an adverse effect on competition in the sector.
A Constructive Alternative
An alternate solution to the dispute that addresses both the safety concerns and the commercial interests of the owner-drivers is that the large transport companies should take more responsibility for the contract driver engagement process by developing a secure licensing or franchising agreement with them. Done correctly, this sort of arrangement would provide more security, more stable income and increased job satisfaction.
The proposed franchise model would need to be performance based so that neither the transport company nor the contractor felt they were being disadvantaged. Unfortunately, the unreliable few have tarnished the reputation of contract drivers, and transport companies are at risk of reputation loss if they use them too often. Monetary incentivisation for timely and effective delivery would benefit both parties and eliminate these risks.
If executed correctly, the proposed franchising model would also support the road safety issues at the centre of the legislation dispute. A secure agreement between a transport company and an owner-driver, with clear expectations and deliverables, would mean more accountability from both parties. More accountability would naturally translate to more care and less risk-taking – a positive for everyone.
A very real concern for the transport industry is the reduction in the number of available drivers. As online shopping and importation powers the demand for freight services across Australia, unfortunately the attractiveness of driving as an employment option has severely decreased. It’s an ageing industry with fewer and fewer newcomers, due in part no doubt to historical issues regarding safety and conditions. A franchising model, where the owner-driver feels supported and protected in his or her own business, may well be what’s needed for the industry to survive.
A Positive Example
Fastway Couriers offers an example of this franchise model done well. They have both courier and regional franchises available and offer support and training, guaranteed income for a select period, exclusive territories, and perpetual franchise agreements. Franchise owners take responsibility for their own success, but with low entry costs and a guaranteed start-up income, they feel protected and well looked after; as a result they are more likely to deliver on their objectives.
According to Chief Operating Office Richard Thame, it is Fastway’s focus on being a great franchise company that delivers the quality that satisfies their customers. Thame says that a customer’s freight needs are simple – a reliable pick up and delivery, and uncomplicated, flexible pricing. As an individual franchisee with Fastway, your income depends on delivery, which means these customer needs are assured.
Fastway couriers also tend to pick up and deliver from the same customers on a regular basis, which assists in forming solid relationships with customers. This has its benefits too as you are much less likely to disappoint someone you know. Another positive to this franchise arrangement is that franchisees work to a set timetable rather than on demand – a marked shift in the way most owner-drivers are forced to operate. This factor alone helps to reduce fatigue and therefore combat safety concerns.
All of the stated benefits, combined with a simple pricing system and a sophisticated distribution and tracking system, provide the elements for both customer and franchisee satisfaction.
Is resolution possible?
Concern about the outcome of passing the minimum wage legislation is rife. This is not a new debate but the imminence of this legislation has stirred the pot once more. Australian Industry Group Chief executive Innes Willox said in a statement: “The Tribunal’s order will increase costs for industry and consumers… threaten jobs and work for contractor drivers and harm to regional and rural areas which are heavily reliant on road transport.”
The drivers aren’t happy, the transport companies aren’t happy and consumers won’t be happy. An alternative approach needs to be implemented that supports a fair right to income potential for owner-drivers and promotes safety on our roads. This franchise model could well be the answer.