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Owner-driver schemes provide ideal opportunities

“Owner-driver schemes provide an ideal opportunity for a commercial vehicle driver to become a legitimate business owner with excellent prospects of growing his or her fleet over time."

The owner-driver concept was introduced in South Africa in the mid-1980s as both a cost-effective and community upliftment transport solution.

The premise of the scheme was to redress inequalities from the past by allowing for inclusion participation in the economy. At the same time, it factored in the improvement of productivity, allowing businesses the flexibility to focus on their core competencies as well as align with efforts to empower employees and deliver on customer service.

Looking at trends within the market, there has been significant focus on the development of the SME and owner-driver models in an effort to increase the employment rate, especially in light of the job losses we continue to see at large enterprises.

Some of the larger blue-chip corporates are adopting the owner-driver model in one of two ways; they are either providing a platform for the scheme or they are embarking on creating an owner-driver management service directly to the drivers.

“Traditionally, vehicles used in owner-driver schemes were sourced from a variety of funders using installment sale agreements. However, as the industry continues to evolve and various acquisition methods have been evaluated, the market is increasingly moving toward more flexible acquisition methods, which now include a full-maintenance leasing option, such as the one we offer,” explained Mike Naidoo, WesBank’s full maintenance and leasing CEO.

“Owner-driver schemes provide an ideal opportunity for a commercial vehicle driver to become a legitimate business owner with excellent prospects of growing his or her fleet over time. Owner-drivers are upskilled with crucial business skills, financial acumen, employment relations and legislative insight, which all provide a good measure of job security for the individuals involved if responsibly managed,” added Naidoo.

According to him, some owner-drivers do not see any benefit in owning an aged truck – for example, older than 10 years – due to increased risk and cost in terms of maintenance and repairs, which often result in downtime. Many of these owner-drivers prefer an ongoing partnership with a funder through the cycle of a contract instead of a once-off transaction. They see this as a way to keep abreast of the latest vehicle technology in terms of benefits, including lower fuel consumption and total cost of ownership.

Owner-drivers have a personal stake and purpose when compared to company-employed drivers, which results in improved productivity and increased efficiencies in the overall operation of the transport fleet, as indicated by WesBank’s long-running experience with owner-driver schemes in South Africa.

A significant amount of WesBank’s experience has come from its nine-year involvement with the South African Breweries’ (SAB) owner-driver scheme, which has been in operation since 1987. Since then, SAB has been involved in the steady and continuous development of the concept as it continues to strive for the scheme to reach its full potential.

Mike Naidoo – CEO WesBank FML.

SAB currently has 248 owner-drivers on the scheme who lease their vehicles. The remaining 452 of the 700 commercial vehicles that make up the SAB transport fleet are owned or leased by SAB, with 94 of them driven by SAB-employed drivers and the remainder rented to owner-drivers on the scheme.

Drivers on the scheme have contracts for 10 years, while maintenance is backed and managed by the various vehicle manufacturers.

The SAB owner-driver programme, through which truck drivers previously employed by the organisation are contracted to transport its products, will see drivers lease and operate their own trucks to distribute SAB’s products from its various depots to retail outlets. The drivers employ their own staff, consultants and crew, which speaks to the organisation’s efforts to build tomorrow’s entrepreneurs to help grow the South African economy.

“In order for the scheme to reach its full potential and achieve the intended purpose for all parties, the solution needs to be of benefit to all parties. SAB is looking to increase the number of vehicles leased by the owner-drivers themselves. Aligning to a funder as a partner to complete the process creates a streamlined process for execution.

“The overall goal is to ensure the motivating factors of entrepreneurship, empowerment, flexibility and improved core competencies are at the centre of owner-driver solutions,” concluded Naidoo.

Source: WesBank

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