... My question for FedEx contractors is.. How do you sleep at night knowing that your employees are being compensated somewhere in the neighborhood of 55,000 dollars less a year than the average UPS Driver for the same job?
I'm not a contractor (just want to make that clear), just a former Express Courier...
When I transferred out of AGFS to DGO (working as a Courier), I actually looked into getting into the Ground deal. I knew there wasn't any hope of a career at Express ("top out" was a bad joke, even for management or other salaried positions) I started doing my research, and found that the contractors were making a return on investment in the neighborhood of about 15 to 20 percent (damn good for any investment). A few were able to bring in a 25 to 30 percent annual return on investment.
However, pulling back the "cover" on the whole operation, the warts and all became self evident - there was a poster by the name of "Mom", that vividly illustrated some of the warts.
If one went into the "contractor" model and was willing to invest between $400,000 and $500,000 (5 to 7 routes), then one could look forward to a return of anywhere between $50,000 and $80,000 a year. If one was in an area that was expanding rapidly, that could easily reach $100,000/yr. One would have to take a minor role in managing the operation (making sure things were done, and getting all the necessary corporate paperwork done correctly), but it wasn't too much to handle (at this point in my research, I WASN'T looking to drive, just own and manage).
However, when looking at how compensation was set up for the "helpers" under the IC model, I almost threw up. If the drivers were to be paid what they were really worth, then there wouldn't be any reason to make the "investment" in the routes - one would be better off investing elsewhere and let a fund manager take care of the day to day work of managing the investment.
The whole set-up is reliant on paying the "helpers" (the actual drivers) below market level wages and with the contractor model, the drivers wouldn't have a chance to organize against their "operator". This is why it is a "scam", and I continue to use that term to this day. The whole INTENT of the independent contractor business model was ignored by FedEx, in setting up this system in order to get bargain basement labor rates to get the volume picked up and delivered.
I wouldn't have been able to sleep at night knowing what is going on (had I chosen to be a part of that system), so I made the decision to go ahead and knock out my Masters' degree and left Express once I found something I really wanted.