Teamsters, OOIDA backing legislation to fight ‘predatory’ lease arrangements

Washington is considering a measure that would crack down on unsavory leasing practices in the trucking industry that backers say trap truck drivers into long-term debt and prevent them from becoming profitable owner-operators.

Rep. Julia Brownley (D-Calif.) has introduced what she calls “the Predatory Truck Leasing Prevention Act” (H.R. 5423), to crack down on exploitative and unfair leasing practices in the trucking industry.

“Current predatory leasing arrangements exploit hardworking truck drivers who are simply trying to build a career and support their families,” Rep. Brownley said in a statement. “Far too many drivers are trapped in crushing debt, denied fair pay and prevented from ever owning their trucks.”

Such abusive practices have driven workers out of the trucking industry and created unnecessary financial stress among remaining drivers.

“My bill will help put an end to these abusive practices, level the playing field for drivers by giving them a fair shot at ownership, strengthen the trucking workforce and make our roads safer,” Rep. Brownley added.

While the fate of the bill is unclear in the Republican-controlled Congress, it already has the backing of two odd fellows in Washington—the Owner-Operators Independent Drivers Association (OOIDA) and the Teamsters union.

“OOIDA and truckers across America applaud Rep. Brownley for taking on the predatory lease-purchase schemes that have fleeced truck drivers for decades,” OOIDA said.

And OOIDA President Todd Spencer said that these scams dangle the promise of ownership but leave drivers broke, trapped in debt, and kicked to the curb with nothing to show for it,”

“These schemes represent the worst in trucking and the Predatory Truck Leasing Prevention Act would put a stop to this practice once and for all,” Spencer added.

Teamsters General President Sean M. O’Brien was equally effusive in his support of the bill. In the past, usually the Teamsters and OOIDA are on opposite sides of policy debates in Washington. But not this time.

“Predatory truck leasing arrangements target decent hardworking people looking for careers in the trucking industry only to lead them to financial ruin,” O’Brien said. “This bill can finally help put an end to these nefarious practices in a core American industry. The Teamsters strongly endorse the legislation.”  

While traditional lease agreements can allow truckers to operate as independent small businesses, the Teamsters and OOIDA claim many lease-purchase or “lease-to-own” arrangements are structured in ways that exploit drivers.

Under these agreements, a motor carrier (or related entity) owns a truck and leases it to a driver. The driver then makes payments in hopes of eventually owning the vehicle and agrees to operate it exclusively for the motor carrier. In these schemes, the lessor and motor carrier are effectively the same entity.

Trucking companies offering these deals often offer false promises of fair compensation, future ownership of the truck and independence from employer-employee requirements.

The goal of these agreements is for the driver to become a full-fledged owner-operator at the end of the lease. But often they do not work out that way.

Instead, drivers are often paid pennies on the dollar and have their work limited by the motor carrier to prevent them from ever securing ownership of the truck.

Because they are technically not independent contractors free to sell their services to other trucking companies, they are limited in ways to seek better compensation.

The bill’s backers say this system is exploitative, in that it often drives people away from the trucking industry and contributes to driver churn. The American Trucking Associations has estimated the nation is currently around 60,000 drivers short, even in the current tough economic environment for the industry

The financial and personal pressures resulting from escalating debt can also create highway safety risks as financially stressed drivers seek ways to drive excess miles outside of legal limits.

In 2021, a Truck Leasing Task Force (TLTF) was charged with examining the terms, conditions and fairness of common truck leasing arrangements. Last January, following a series of productive meetings and discussions with industry leaders and driver representatives, TLTF submitted its findings to the Departments of Transportation (DOT), Labor and Congress. The report found that inequitable lease-purchase programs negatively affect individual drivers (especially new drivers), the trucking workforce, the health of the industry and roadway safety.

The Predatory Truck Leasing Prevention Act would implement those recommendations and require the DOT to write regulations to stop the use of predatory commercial motor vehicle lease-purchase programs by motor carriers within one year of enactment.

“Truck drivers keep America moving,” Rep. Brownley said.  “They deserve fair treatment and a real chance to succeed.”