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February 8, 2022 12:47 PM, EST

Task Force to Examine Lease-Purchase Agreements

trucks for leaseTransport Enterprise Leasing

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A provision tucked in the bipartisan infrastructure funding law calls for the formation of a truck leasing task force to examine the fairness of lease and lease-purchase agreements between motor carriers, leasing companies, owner-operators and drayage drivers.

The provision, signed into law on Nov. 15, calls for the appointment by mid-May of a wide-ranging task force of no more than 10 members.



The Department of Transportation, in consultation with the Department of Labor, will be responsible for appointing the task force, which will include at least one representative each from labor, owner-operators, motor carriers, consumer protection groups, consumer finance lawyers and businesses that provide lease-purchase agreements in the trucking industry.

Nick Geale

Geale

The task force will ultimately send a report of its findings and recommendations to Congress, the DOT and DOL.

“The availability of owner-operators and their equipment is critical to the supply chain, but the ability of hard-working men and women choosing to own their own business is even more critical to the country and our industry,” Nick Geale, vice president for workforce policy at American Trucking Associations, said in a statement. “We look forward to working with FMCSA on ensuring a balanced task force that looks at the issue in an objective manner to make recommendations that maintain that opportunity with appropriate safeguards.”

“We have pushed for something to be done about predatory lease-purchase agreements for many years,” said Norita Taylor, a spokeswoman for the Owner-Operator Independent Drivers Association. “While the supposed goal is for the driver to eventually own the truck and become a full-fledged owner-operator at the end of the lease, the agreements rarely end that way. The lack of oversight often leads to disastrous results for the truck driver.”

Norita Taylor

Taylor

Taylor said OOIDA hopes to be included as a member of the task force.

A spokesman for the Teamsters union, also a possible future member of the task force, declined comment for this story.

Indeed, the mixture of labor, owner-operators and motor carriers peering into the intricacies of lease-purchase agreements looks to be a hot-button issue.

“By setting up a task force that uses the word ‘lease,’ while not recognizing that the leasing industry does not operate such practices, appears to be problem in search of a solution,” said Jake Jacoby, president of the Truck Renting and Leasing Association.

Jake Jacoby

Jacoby

“The easier path for Congress to combat the issue at hand would have been to specifically target predatory companies that try to scam or take advantage of drayage drivers but not create a task force that broadly uses the word lease or leasing.”

Jacoby added, “These practices are not used in the traditional truck renting and leasing industry, [and] TRALA now represents nearly 99% of all companies in the U.S. that operate commercial truck leases.”

Specifically, the law calls for the task force to examine common truck leasing arrangements available to commercial motor vehicle drivers, including lease-purchase agreements; whether any inequitable terms and agreements affect whether a vehicle is kept in a general state of good repair; and the impact of truck leasing agreements on the net compensation of commercial motor vehicle drivers, including port drayage drivers.

It also asks that the task force determine if truck leasing agreements properly incentivize the safe operation of vehicles, including driver compliance with the hours-of-service regulations and laws governing speed and safety generally. The law also asks the task force to explore if lease agreements allow drivers to earn a rate commensurate with other commercial motor vehicle drivers performing similar duties.

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