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Explore the link between truck driver pay methods and levels with safety outcomes in the transport industry. Understand how remuneration influences risk behavior and safety culture, with evidence from studies and industry contexts.
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Lori Mooren, Ann Williamson, PhD, Raphael Grzbieta, PhD Transport and Road Safety (TARS) Research | School of Aviation | UNSW Evidence that truck driver remuneration is linked to safety outcomes
“Imagine a world…where there is no minimum wage … most people work 60 hours per week … most of us have to compete to offer our services at the lowest possible price … where people work irregular shifts and hours and both day and night … and employers decide which work to pay you for and which you have to perform for free.” Belzer, M.H., 2000. Sweatshops on wheels: Winners and losers in trucking deregulation. Oxford University Press
What does this have to do with safety? • Major crash/injury risk factors – driver fatigue, drug use, speed, unsafe vehicle, unsafe loads… • But what’s underneath? • System and external factors – competition, customer demand, business skills, remuneration, regulation, safety culture
How does pay affect safety? • Effects of Driver Payment Methods on risk and safety outcomes • Effects of Driver Pay Levels on risk and safety outcomes And, what are some of the industry and company environmental influences?
Two Payment Methods for Truck Drivers • Productivity, or incentive pay is payment for truckload, by miles traveled (piecemeal) or by percentage of profits (Most (>75%) Australian and US drivers receive payment on this basis, Golob & Hensher, 1994, Belzer, 2000, Williamson & Friswell, 2013) • Time-based pay is where drivers are paid for hours worked, including driving, loading/unloading or waiting for loads
What differentiates lower and higher insurance claimers? • All lower claimers paid by time worked • Higher claimers were 4 times more likely to pay employee drivers by truckload or trip • Lower claimers more often paid employees for queuing • Lower claimers more often paid freelancers by time (Mooren, L et al, 2014, “What are the differences in management characteristics of heavy vehicle operators with high insurance claims versus low insurance claims” )
Evidence of Payment Method Effects • Seven studies* in 2 countries from the 1990s to 2014 provide evidence that pay methods affect: • Self-imposed time pressure (Golob and Hensher, 1994) • Use of stimulant drugs(Golob and Hensher, 1994, Williamson, 2007) • Speeding(Hensher, 1990, Goloband Hensher, 1994) • Fatigue(Williamson et al., 2001, Arboleda et al., 2003, Williamson, 2007, Thompson and Stevenson, 2014) • Truck maintenance and safety checks (Thompson and Stevenson, 2014) • Insurance claim rates (Mooren et al, 2014) * cross-sectional surveys
Evidence of Payment Level Effects • Four studies* carried out in 3 countries from the 1980s to 2014 provide evidence that pay levels affect: • Driver turnover (Backman and Järvinen, 1983) • Speeding(Hensher, 1990, Hensher et al., 1991) • Self-imposed schedules (Hensher et al., 1991) • Stimulant drug use (Hensher et al., 1991) • Violations of work hour limits (Braver et al., 1992) • One large cohort study found increases in pay reduce crash risks (Belzer et al., 2002, Rodríguez et al., 2003, Rodriguez et al., 2006) • One study* found unpaid waiting time and incentive based pay predicts driver fatigue(Williamson and Friswell, 2013) * cross-sectional surveys
Roadside truck driver survey* (n = 475 Australian drivers) “The findings suggest that mandating payment of drivers for non-driving work including waiting would reduce the amount of non-driving work required for drivers and reduce weekly hours of work. In turn this would reduce driver fatigue and safety risk as well as enhancing the efficiency of the long distance road transport industry.” * Williamson, A., Friswell, R., 2013. The effect of external non-driving factors, payment type and waiting and queuing on fatigue in long distance trucking. Accident Analysis & Prevention 58, 26-34.
Industry context of pay and payment systems • If unregulated, extremely competitive; • If unregulated, unionisation drops; • Low profit margins (averaging 3%); • Multi-tiered contracting with chains of players; • Precarious employment and vulnerable workforce; • Large percentage of small operators; and • Large percentage of productivity paid workers.
Australian Government Inquiry* Research evidence, coronial inquests and expert submissions - concluded that the: “overwhelming weight of evidence indicates that commercial/industrial practices affecting road transport play a direct and significant role in causing hazardous practices.” • Characteristics of the road transport industry: • Unique and most hazardous workplace; • Incentives for others in the chain to delay trips, and to rush trips • Concentration of power by large clients • Tendering processes not conducive to safety responsibility sharing • Commercial incentives for breaches of safety regulations * Safe Payments: Addressing the Underlying Causes of Unsafe Practices in the Road Transport Industry, NTC, 2008
US Motor Carrier Industry Findings • US studies found that deregulation of working conditions and remuneration resulted in: • Drops in driver earnings (by 30%) and rise in hours (65 to 95 per week (Belzer, 2000) • Reduction in union membership and fall in driver wages (Belman & Monaco, 2001) • No relationship with truck crash injury rates (Savage, 2004) • Also, companies that are operating profitably have: • Lower driver turnover, (Bruning, 1989) • Lower crash rates, (Bruning, 1989) (Fernandez-Muniz et al., 2009, (Knipling and Bergoffen, 2011) • Better driver and vehicle safety ratings (Britto et al., 2010)
Why drivers are vulnerable Drivers are ‘price takers’ rather than ‘price setters’ because of the: • length of the sub-contracting chain; • prevalence of ‘undercutting’ to win work; • high capital costs of entering the industry; • tendering processes that have little or no regard for the safety of the transport task; • limited negotiating ability of drivers; • small number of large clients; and • presence of a few large dominant transport companies with the ability to make efficiency and price gains through purchasing power. Chain of responsibility regulations do not address these directly
Conclusions • There is a relationship between: • Driver payment methods and risk outcomes • Driver pay levels and risk outcomes • Safety and efficiency in this industry are influenced by how, when and what is remunerated. • Intense competition and low profit margins lead to poor safety conditions for drivers, manifesting in pressure to take driving risks – speeding, working long/irregular hours, driving tired, taking drugs, not doing preventative truck maintenance.
Way forward • To break this link we must address the motivations that create incentives for unsafe outcomes (fatigue, poor maintenance, speeding, drug-use & crashes) • Motivations like: • competition that allows contracts with unsafe deadlines and prices; • tight margins and low freight rates • multi-tiered contracts allowing pressures on subcontractors; and • productivity-based payments, only payment for driving work.
