Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise Model

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

Bingo! This is what's so laughable, for a "legal and legitimate" business, they sure spend a lot of time in court rooms.

Bingo. And still incredibly lucrative.

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

I don't think it's that easy. Just look at how many lawsuits have been filed on this matter, millions spent on fighting them and fines assessed against them, and who knows how much spent on lobbying to keep this scam "legal". Nothing easy about that and it will continue as long as they continue to do business this way.

Think about it. It's often said that Fedex saves about 30% in labor cost by using contractors. Do you really think the come anywhere close tospending that in legal and still pull a 20% profit margin? I don't.

 

[MAKAVELI]

I don't think it's that easy. Just look at how many lawsuits have been filed on this matter, millions spent on fighting them and fines assessed against them, and who knows how much spent on lobbying to keep this scam "legal". Nothing easy about that and it will continue as long as they continue to do business this way.

Think about it. It's often said that Fedex saves about 30% in labor cost by using contractors. Do you really think the come anywhere close tospending that in legal and still pull a 20% profit margin? I don't.

Exactly the main reason why it's a scam. And now you go on record that the profitability is solely due to cheap labor. Thanks for your honesty. The truth is Fred S has sold his soul for profits and would hire illegal imigrants just as the farmers do if he could get away with it.

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

And so what if it is cheap labor? Actually you that gets Fred off the hook and you can take on each of the crappy contractors. Problem is, they don't care what you think of them, Fred can't make them pay a certain wage, and you are left barking at the moon about something you can't possibly control. So yes, even with the lawsuits, keeping the contractor model is both relatively cheap and secure for Fred.

 

[Cactus]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

Think about it. It's often said that Fedex saves about 30% in labor cost by using contractors. Do you really think the come anywhere close to spending that in legal and still pull a 20% profit margin? I don't.

Yeah using questionable and unethical business practices? And how do you know what FedEx Ground spends in legal fees, do the lawyers show you the books? This whole ISP/IC thing stinks (a lot of us smell a rat) and it's a huge step backwards for labor and the economy.

And so what if it is cheap labor? Actually you that gets Fred off the hook and you can take on each of the crappy contractors. Problem is, they don't care what you think of them, Fred can't make them pay a certain wage, and you are left barking at the moon about something you can't possibly control. So yes, even with the lawsuits, keeping the contractor model is both relatively cheap and secure for Fred.

How "cheap" is it to pay off all the lawmakers?

Fred is a control freak. He'd rather pay off the money to the already wealthy than see any hard working driver receive it.

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

By the way, what definition of "scam" are you going by? Because every definition I read has to do with fraud which of course would be illegal.

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

Yeah using questionable and unethical business practices? And how do you know what FedEx Ground spends in legal fees, do the lawyers show you the books? This whole ISP/IC thing stinks (a lot of us smell a rat) and it's a huge step backwards for labor and the economy in this country.

I don't know what they spend, but their financial statements nts come out quarterly. I would think that is factored in there, wouldn't you?

 

[MrFedEx]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

Exactly the main reason why it's a scam. And now you go on record that the profitability is solely due to cheap labor. Thanks for your honesty. The truth is Fred S has sold his soul for profits and would hire illegal imigrants just as the farmers do if he could get away with it.

Where were all the lawsuits when it was Roadway Package Service? All of this only became an issue when FedEx took over and began (as usual) imposing the "Express-Style" management structure onto the organization. Fred does this with every company he buys. The former Viking Freight, American Freightways etc...the same deal. So why wasn't RPS sued and why wasn't the RPS business model questioned? Simple...degree of control.

I know bbsam always likes to say I'm barking up the wrong tree when I talk about "control", but I'm not, and numerous transportation outfits have had their "owner/operator" status taken away because they run the owner/operators like they are employees. FedEx is always tweaking the business model to stay ahead of having this accusation proven in court. So far, they've been able to beat the rap so to speak.

There are all sorts of franchises out there, from auto repair to frozen yogurt, but I don't see them having FedEx Ground type issues nor have I ever seen Ground referred to as a bona fide franchise. So, is Ground a franchise or a "business partnership"? And please define "business partnership" for me since that seems to be official FedEx terminology for the FedEx Corporate/ISP/Contractor relationship.

 

[Cactus]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

By the way, what definition of "scam" are you going by? Because every definition I read has to do with fraud which of course would be illegal.

Quit trying to blow smoke up our asses. Scam and fraud go hand in hand more times than not.

Where were all the lawsuits when it was Roadway Package Service? All of this only became an issue when FedEx took over and began (as usual) imposing the "Express-Style" management structure onto the organization. Fred does this with every company he buys. The former Viking Freight, American Freightways etc...the same deal. So why wasn't RPS sued and why wasn't the RPS business model questioned? Simple...degree of control.

Thank you.

And you've nailed it right there.

 

[MAKAVELI]

And so what if it is cheap labor? Actually you that gets Fred off the hook and you can take on each of the crappy contractors. Problem is, they don't care what you think of them, Fred can't make them pay a certain wage, and you are left barking at the moon about something you can't possibly control. So yes, even with the lawsuits, keeping the contractor model is both relatively cheap and secure for Fred.

Every dog has his day. Problem with this scam is he is biting the nose to spite the face. While ground may be doing well with day labors as a work force, Express is a sinking ship. And it's not do to the economy because UPS is enjoying record profits in this economy. One company runs an efficient top to bottom operation while the other is flailing away making desperate attempts to keep from drowning. Only a matter of time before the his house of cards comes tumbling down.

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

17.7% profit for the quarter is not "flailing around". I still believe Express will one day have its own conractor model. Just a matter of time before that shop is set up.

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

Quit trying to blow smoke up our asses. Scam and fraud go hand in hand more times than not.





Thank you.

And you've nailed it right there.

So you insist that Ground is a fraud and thus illegal?

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

Actually, the FE contractor scam is not that different than many trucking companies that offer lease/purchase plans to employees. Even though the failure rate is huge and many contractors lose everything they own, it is still legal. Why?? Because big trucking companies lobby to make sure the rules do not change.

Consider this example... A CDL holder goes to, let's say ATS, they sign papers to lease a tractor with no money down. According to the lease agreement, they can only haul loads from ATS. ATS books the freight and gives the lease driver a percentage of each load, except the load came from their own in-house brokerage, so ATS took a commission from the broker and from their parent company, leaving the driver with very little to pay for maintenance, fuel and the all important truck payment. There are many tales of drivers that had to live on less than $100 a week after ATS was done taking their cut. Many other tales of drivers that sat because there were no loads around and they could not afford to pay for fuel to get 400 miles to another load. Other tales of drivers who lost their shirts because their tractors broke down, they could not haul loads and could not pay their weekly truck payment.

Those drivers are considered independent contractors even though they are dispatched all loads via ATS and must follow their schedule and carry loads that only they book.

Many, many other OTR companies do the exact same thing and if the rules were to change for FE, they would undoubtedly also have to change for the OTR fleece scams. Google, "Lease/purchase scam" for lots more info and links to people that have lost everything because of them. I suspect that many of them would argue that the FE model is a pretty good deal.

In the lease/purchase scam, the company does not have any of the equipment costs that they would have if they ran their own trucks. Many OTR companies have found that leasing trucks is so profitable that they also own dealerships to sell tractors. The OTR companies make money on the loads and the tractor payments, plus they do not have the employee costs; pretty much just like FE ground.

I suspect that FE gets lots of industry support from outside the small package biz for their model.

MFE, I can only assume that you simply wish to ignore this post. You want to bring up other industries, but barnyard makes the perfect argument within the trucking industry.

 

[vantexan]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

17.7% profit for the quarter is not "flailing around". I still believe Express will one day have its own conractor model. Just a matter of time before that shop is set up.

How do they go around the FAA requirements? And if FedEx is taking Express towards the contractor model then why terminate our pension? Everything they have done with Express is towards saving money in the future dealing with regular employees with benefits. Why go through all that if they're going to use contractors?

 

[MAKAVELI]

17.7% profit for the quarter is not "flailing around". I still believe Express will one day have its own conractor model. Just a matter of time before that shop is set up.

I didn't say ground was. Express is. And no matter what you believe express is still the largest opco of FedEx . If express continues to slide it will impact ground negatively. Where do you think they will pull profits from to prop up express?

 

[MrFedEx]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

MFE, I can only assume that you simply wish to ignore this post. You want to bring up other industries, but barnyard makes the perfect argument within the trucking industry.

I'm not ignoring it. There have been numerous "owner-operator" trucking companies that have had their workers declared to be employees.

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

How do they go around the FAA requirements? And if FedEx is taking Express towards the contractor model then why terminate our pension? Everything they have done with Express is towards saving money in the future dealing with regular employees with benefits. Why go through all that if they're going to use contractors?

I have no idea. I think R1a once suggested the the FAA requirements were fairly limited in stature and that at some point freight could be transferred to contract carriers. Every move thus far has been made to cut cost with current employees. That is not to suggest that a hybrid system couldn't be put into place down the line. Are you beginning to see it at shared dropboxes?

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

I'm not ignoring it. There have been numerous "owner-operator" trucking companies that have had their workers declared to be employees.

And you will concede that many have not, correct?

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

And could you name them please?

 

[bbsam]

Re: Someone Tell Me How The Ground "SCAM" Is Any Different Than Any Other Franchise M

I didn't say ground was. Express is. And no matter what you believe express is still the largest opco of FedEx . If express continues to slide it will impact ground negatively. Where do you think they will pull profits from to prop up express?

I don't think they will prop up Express. I think they will slash it to the bone.