FedEx's Driver Disagreement


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FedEx's Driver Disagreement - Motley Fool

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In 1998, FedEx purchased Caliber Systems (and in turn, Pittsburgh-based ground shipper RPS) in an effort to better compete with UPS by offering a ground-based shipping service. In integrating RPS (now known as FedEx Ground) into the existing FedEx organization, FedEx intended to "operate separately, compete collectively." This meant keeping FedEx Express pilots and drivers as corporate FedEx employees, while maintaining independent contractor status for FedEx Ground drivers.

So while FedEx Express drivers are paid by the hour, FedEx Ground and Home Delivery drivers are paid according to the number of packages delivered, encouraging drivers to be extra-productive and efficient. From a corporate standpoint, FedEx Ground operates separately on certain functions (accounting and operations, for example) while sales efforts have been consolidated, with ground and express agreements negotiated together.