13 Aug 2018

Freightways looks to improve 'contractor revenue' for drivers

From Checkpoint, 5:13 pm on 13 August 2018

Freightways says it is working on systems to help its contract drivers earn more revenue.

The courier and data management company today reported a smaller-than-expected increase in profit as it counts the inflationary cost of a tight labour and increased spending on infrastructure.

Courier driver.

Photo: 123RF

Over the past month, Checkpoint has reported on a growing body of opinion that courier drivers are not independent contractors, under law, but are employees deserving of the protections employees get. 

Numerous drivers have told Checkpoint they earn less than the minimum wage after expenses and tax are taken into account. They have to pay for others to cover them if they take sick leave, and often cannot work for any other company. 

Almost all courier companies use a model that exports costs to the driver - he or she must buy the van, buy the uniform, buy the scanner, and not use their own equipment to drive for competing companies.

Freightways have repeatedly turned down requests from Checkpoint to be interviewed. However Nona Pelletier, from RNZ's business team, spoke to Freightways chief executive Mark Troughear today.

He said the labour market, particularly in the bigger centres, was an "awful lot tighter".

"So, we've made a decision just to pay more where we have to - we've always been comfortably above the minimum wage, but in places like Auckland and Christchurch, we're typically paying a little bit more than we would have done in the past and we have weighted our increases to team members higher at the lower end of the scale." 

Mr Troughear told Ms Pelletier the company was also working on creating systems so that drivers could earn more revenue.

"What we're doing is looking at how we can create smaller areas for contractors, funnel the freight from all our brands into that one contractor - therefore give him greater density. 

"We think that will be good for the contractors and we think it will give us a better efficiency rate in delivering...parcels."

He thought that would certainly help improve the "level of revenue" that that its contractors earn.

He said contract drivers had not raised any concerns with the company directly about minimum earnings or employment conditions as contractors.

"We are obviously well aware of what's been in the media. We talk to our contractors on a regular basis and it's always part of what we do in a given year to look at how we improve contractor revenue."

He did not have a lot of information about the concerns: "But, when we look at the average revenue gained by our contractors, even after costs, we wouldn't have thought there was an issue there."

Checkpoint has spoken to numerous drivers, some with Freightways, New Zealand Post, and other companies, who have spoken about the difficulties of being independent courier contractors, with little or no protections.