The Gig Economy Comes to Trucking

"The Current Driver Employment Model Just Doesn't Work"

Todd Warner, Chief Operating Officer of Blue Bloodhound, believes that the employment model used by the industry is broken. He thinks his concept and on-line tool can change this model and  benefit both carriers and drivers, giving each side more flexibility, freedom and profit. His pitch mainly is aimed at drivers, many of whom are currently employed and want to make more money. The proposition: "Blue Bloodhound gives you the authority and flexibility to work when you want, where you want, and for whomever you want, with available runs 24/7. Become a fully independent contractor without giving up your current W-2 employment, or without owning or leasing a truck, and hold the keys to being your boss. Our service is free, always – all you have to do is drive."

Following is an edited interview with Warner.

What is your professional background?

I spent the majority of my professional career in the staffing industry and recruiting industry. For the last 20 years, I’ve worked closely with placing Class A and B drivers throughout the country. I was chief operating officer of a large national staffing firm.

Where did the idea for Blue Bloodhound come from?

It came from being that middle person who knows the plight of the driver, what the driver is looking for, trying to locate qualified drivers and going through the regulated process of evaluating and onboarding drivers. [On the other side, I was the person] trying to meet the needs of the motor carrier who’s working in an industry that is extremely volatile by nature because of its seasonality, cycles and contracts. Their work is fast and their workload constantly flexes and yet they’re trying to find drivers to grow their business. There are 50,000 openings a day that they want filled. That number keeps growing; we’re in the middle of chaos trying to make both sides happy and trying to find a better way.

Have you connected your first driver yet?

Not yet, but any minute I expect to get a phone call that we've made our first run. We opened in November. I wanted to build a database of drivers first. We need drivers, and we need motor carriers, but the thought was that the driver was a higher demand so we wanted to build our database of drivers first to make ourselves attractive to the motor carriers. The runs have expiration dates whereas the drivers usually don’t.

We currently have 2,400 drivers who have signed up and 284 motor carriers who we are moving through the enrollment process.

How do you charge?

We charge $55 a day for a motor carrier to utilize a driver from Blue Bloodhound’s website. In  essence it’s a rental fee. The $55 is billed at the end of the run and it is a split transaction. The money never comes through Blue Bloodhound. It’s handled by Braintree (the company provides payment processing options for many devices) and then PayPal. The driver gets paid at the end of the run. The driver knows upfront how much he will make, and there are no hidden fees.

What kind of drivers are signing up?

About 90 percent of our registered drivers are just straight drivers. They don’t have a truck, and they’re looking to use their skills to find a driving opportunity. The other 10 percent are owner-operators who have their own equipment and are offering it.

Our service is for drivers who may have gotten into trucking because they wanted to be independent. They wanted to be their own boss. They wanted to run their own business. Then they found out that buying equipment and everything that’s involved in being a trucker is not something that they can do. They end up being a W-2 employee, and maybe they're not satisfied with it. Some people love it and stay, but for those who want something else, who want freedom, who want to be able to take different jobs, different pay or different times, go over the road for a while, come back and work local… do whatever they want and use their skill set to be able to achieve that… that’s the environment that we've created.

How do you screen drivers?

Our first screen is obviously running their MVR and driver’s license for verification. After that, the driver creates his own qualification file. He goes through all the necessary requirements to validate that file such as a 10-year employment history and findings of a random drug test. All that information is uploaded into their driver file, and then we audit the file to make sure that everything in it is compliant.

How are you different than a job board?

Our on-line tool is something that a motor carrier can use and it’s the secret sauce. It's what differentiates us from a job board. What we offer with our independent contractors is that they’re live. They are able to put a key in an ignition in an hour. Carriers can see a live driver file with  credentials on line and decide if it meets their hiring criteria. They can actually hire that contractor knowing that the driver file is there and they’ve been previewed. We feel that’s the big piece of the on-line tool, and that’s what makes it different.

Who are your competitors?

We feel that we have no competitors. We’re in no-man’s land with this concept. It is a marketplace for independent contractor drivers and we bring business opportunities to them. We feel that there’s nobody out there doing that. No one is taking that 90 percent of the workforce who are currently W-2 employees driving and saying, 'listen, you can act like an owner/operator without a truck. You can have freedom and independence. You can take and parlay your skill set and be able to go out and do anything that you want with that.' We have created a marketplace for that.

What is your biggest challenge?

Our biggest challenge that we’re getting from both sides - drivers and carriers - is contracts they’ve not seen before. The industry has a tendency to categorize you as something they know, so they may think we’re a freight broker or a jobsite or that we’re doing  background checks. Our first hurdle is getting people to understand what we really do, getting them to see that this is something completely different, understanding it and then deciding if it’s worthwhile for them or not.

For drivers, there's a certain amount of skepticism or cynicism with being a Class A truck driver and I think that’s something that’s been earned. I think the Class A truck driver is one of the most under appreciated positions in the United States. We need to explain the content and be straightforward with them and allow them to make decisions.

On the motor carrier side, it’s similar. It’s a new concept. It's understanding what they’re able to do and how they’re able to hire. They understand the concept of independent contractors so then it's a matter of 'how do I get the driver?'

What do you say to those who contend that this is just a scheme for carriers to shed their W-2 drivers and turn them into 1099 drivers so they can save money?

We look at it from the driver's side. How do I give the driver more freedom? There’s no way to do this with W-2 employment especially in an industry that is so volatile. Nobody can control the high turnover.

Instead of trying to fit a square peg into a round hole by taking a W-2 employee and putting them in an environment where they can’t get enough work, where they eventually get laid off and where they’re constantly worrying about where they’re getting their next run, why not embrace the industry for what it is and redefine the driver? That’s really how I see it. Let’s create a different workforce model.

From the carrier's point of view, they want flexibility because they want to be fiscally successful and have drivers when they need them. They don’t want to pay for them if they don’t need them. Many end up laying them off. The current driver employment model just doesn't work. The high turnover tells us that.

Look at our investors; they're not carriers. We have several who are from Wall Street and a couple of them run large hedge funds. Mainly we have individuals who are the principals of these types of firms that are putting their own money into it.

How did you come up with the company's name?

We went through a long and arduous process to find a creative name. We decided on Bloodhound because dogs tend to be prevalent in the trucking industry. You see the bulldog and the Great Danes. The bloodhound is always seeking and searching and looking. The bloodhound sniffs out a trail to find its prey, and that’s what we are hoping our on-line tool will do.

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