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Becoming an owner driver

  • 03 November 2011
  • By admin

An owner-driver is any person with the skills, licence and vehicle to undertake hire or reward work in road transport, usually operating as a sole trader. Some owner-drivers subcontract work to other drivers or employ other drivers, but still count themselves as owner-drivers because they retain a driving as well as managerial role. Many owner-drivers undertake work as subcontractors for large road transport operators such as Maritime Transport, Hanbury Davis or Wincanton, which now owns Hanbury Davis.

Sometimes these companies will lease the vehicle to the owner-driver and may be able to obtain fuel at competitive rates. However payment tends to be low. Courier and parcels firms also use owner-drivers. Others find a local niche where personal relationships and customer service are at a premium. One issue if working for just one company is whether you are employed or self-employed for tax purposes. You have to demonstrate that you are in charge of the work you undertake in order to be self-employed.

What you need to be an owner-driver

  • A vehicle. There are a number of ways to finance a vehicle including cash, hire purchase, renting or leasing.
  • An operator’s licence (O-licence). This is granted by the Traffic Commissioneronce you have demonstrated that you can fulfil undertakings with regard to:
    • A standing level of finance;
    • An understanding of and procedure for maintaining roadworthiness including daily and weekly checks, six-weekly inspections and a clean MoT pass rate.
  • A suitable place to use as an operating centre where you can base your vehicle.
  • An HGV driving licence and any other qualifications needed to work in your sector such as ADR.
  • A CPC holder. The Certificate of Professional Competence must be held by you or someone you have contracted to oversee your operation as a regular and involved consultant.

Any breach of these undertakings, such as roadside prohibitions, financial difficulties, convictions or a lack of CPC holder may call your licence into question. Any changes to your operation must be communicated to the Traffic Area Office. Any change in vehicles used or operating centre must be with permission.

How to manage your business

Setting up as an owner-driver can be challenging and some prefer to employ agencies to establish their business credentials for them such as M&i (UK). It also costs a considerable amount – some calculate start-up costs at around £25,000. You will need the following:

  • A business plan. This should be as detailed as possible. It needs to explain the market in which you will operate, the services you will provide, definite and potential clients, competition, strengths, weaknesses and a three-year forecast.
  • Strong cash flow. What you owe is less important than your ability to pay debts. Work out how you will have enough money, week by week.
  • More than one client. Unless you are dedicating your vehicle to a specific road transport operator, ideally no one client should provide more than 10% of your income.
  • A grasp of taxation, National Insurance and VAT law for the self-employed. Or a good accountant.
  • A niche, either local or sectoral. The most successful owner-drivers find a niche which cannot easily be filled by large national brands, for instance, solid waste disposal.

Help and support for owner-drivers