Fleet Management News & Business Info | Commercial Carrier Journal
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INNOVATORS owner-operator rate of $1 per mile. After fuel costs and other expenses, the lessee's earnings only might be enough to cover costs. Bay & Bay's Predictable Pay Program allows that lessee to generate take-home pay for that run based on how many miles they run, not what is left over after expenses. "It doesn't matter about the expenses associated with the truck," says Little. "They are getting paid an advance for the work they did." Bay & Bay provides lessees with a Bay & Bay's Predictable Pay Program expenses withheld weekly: soon as possible. "We break the payments down so that they aren't getting socked right out of the gate, " says Little. "With other lease-purchase pro- grams, there is probably not enough money left over to send home." Whereas conventional arrangements typically don't begin collecting se- curity deposits until the lessee has caught up on his lease payments and other expenses, Bay & Bay's Pre- spreadsheet that contains monthly expenses, revenues and driver pay, as well as a week-by-week look at where their business should be, assuming an average of 10,000 miles per month. Large monthly and annual expenses such as lease payments, insurance costs and licensing fees are broken down by week and withheld by Bay & Bay for the leasing com- panies to make it easier for the lessee to become profitable as Bay & Bay's Predict- able Pay Program offers lessees a clear look at where their business should be on a weekly basis to better manage their finances. dictable Pay Program divides the security deposit over 52 weeks, changing a vari- able expense into a fixed weekly cost. The company's analysis has shown that lessees that make it over a year have a high success rate. "Putting titles in their hands is what it's all about," says Little. Year over year, about 20 percent of Bay & Bay lessees are paying off their trucks. "It's a conservative program, but we tell everybody, 'You can do better – we're willing to take a risk on your business, so we'll be conservative and make sure you can be profitable,' " says Little. Bay & Bay currently has half of its leased trucks in the Predictable Pay Program. Since the program's inception, the company is experiencing notable successes with a number of lessees that were struggling to make ends meet with conventional lease-purchase programs. "We had one driver that didn't have any money going home for three straight weeks due to over-advancing his busi- ness and lack of production," says Little. "We put him on the program, and now he's happy as a lark and has money go- ing home every week." Seven months after launching its Predictable Pay Program, Bay & Bay already is experiencing lower turnover for participating lessees. "Reduced turnover is key to all parts of the operation, including customer satisfaction, production, equipment uti- lization and cost involved in getting the " With this program, we're helping new owner-opera- tors stick it out through the startup of their businesses and keep money going home to their families. " – Zach Little, vice president of operations lease trucks ready to lease out again," says Little. "Lessees' satisfaction is up, as they can predict what their pay will be at the end of the week without calling and asking. " Bay & Bay's goal is to remove lessees from the Predictable Pay Program once they are profitable, but the company allows participants to remain in the program and increase their weekly take- home pay to help them manage their business over the long term. "We don't want lessees' Predictable Pay Program withholdings to be big – we want it to balance out so they're taking home as much money as they can," says Little. CCJ INNOVATORS profiles carriers and fleets that have found innovative ways to overcome trucking's challenges. If you know a carrier that has displayed innovation, contact Jeff Crissey at jcrissey@ccjmagazine.com or 800-633-5953. 48 COMMERCIAL CARRIER JOURNAL | JANUARY 2012