TL;DR The US truck driver shortage isn’t due to a lack of drivers. It exists because the macroeconomics of the truck driver industry are in disarray. This is the problem SlipSeat is attempting to fix. This is our moonshot.
Our solution is a transactional framework designed to solve localized shortages in a way that everyone wins. Driver take home goes up while carriers save money and have easier access to drivers. And for the receiver/consumer, the overall cost of shipping falls and freight moves faster. It works really well in high density areas like ports.
SlipSeat is an economics based, AI-driven solution to the US truck driver shortage.
It is our belief that the Interstate truck driver industry has been macroeconomically out of balance for decades and that, as a result, the trucking industry utilizes drivers poorly, making drivers inefficient through no fault of their own and creating process inefficiency which is experienced by all drivers. Furthermore, we believe that the collective inefficiency is so great that, in aggregate, there is enough lost supply to offset the shortage several times over.
Because of these beliefs, our strategy to solve the shortage may seem counterintuitive in that it doesn’t add any new drivers. Instead, our goal is to fix the macroeconomics, which will make drivers more efficient/productive and increase supply to the point that the shortage goes away. We fix the macroeconomics by turning experienced drivers into businesses so they can sell services to carriers.
As businesses, drivers can account for all the cost and risk attributed to them in a typical driver/carrier transaction, which makes them more efficient since, in our world, they also control their own supply. As employees, drivers cannot accurately account for all the risk and cost, which is why the macroeconomics of the truck driver industry are a hot mess, why the labor market is out of balance, and why there’s a giant shortage of drivers.
Our solution is a patent pending, self-populating, self-correcting system designed to solve geospatial shortages (see flowchart). At the heart is a transactional framework that connects vendors, in this case driver vendors, with motor carriers. On each side is an AI-driven marketing mechanism to attract local area users from the other side.
For example, as similar drivers sign up in a small enough area, the system will market to local area carriers who match with the drivers. Likewise, as similar carriers sign up in a small enough area, the system will recruit new vendors in that area with the skillsets and backgrounds needed by those carriers.
With our design, either side can trigger a shortage solution for themselves. A group of similar drivers can band together and the system will attract carriers who can then buy their services. As these carriers sign up, the system will attract more drivers, tailored for them. As more drivers sign up, the system will increase marketing efforts to additional carriers, so that drivers can maximize their productivity and their take home.
As more transactions are made, it creates a growth spiral that benefits both drivers and carriers as well as local area consumers. Rinse/repeat across the country for a national solution capable of eliminating the shortage long before the US can create the infrastructure needed for the widespread adoption of autonomous trucks (which is what will solve the shortage if we don’t).
Vendors are vetted on sign up. Driver vendors are screened to DOT specs, with a little extra on the background checks. Drivers self certify and are in control of maintaining their DQFs while we verify all their info and keep a copy of their DQF on file for carrier backup. Vendors have carte blanche authority over their respective domains, deciding what products and/or services to sell, what to charge, whom to sell to, etc. We handle advertising, billing, security, communications, and payments for vendors, who keep 80% to 90% of the transaction total, depending on the product or service sold.
Carriers generally come to us when they have loads sitting. They are screened as well upon signup, and in the process most are pre-approved for $50,000 or more. Carriers may purchase whatever they want from whomever they wish, including non-driver vendors. Regardless of what they buy or from whom, the following week the carrier will get an invoice from us for the products and services purchased. With approval, a carrier may opt for net terms out to 120 days.
Once “matched,” drivers and carriers may work together as long as they mutually want. The carrier should add the driver to their pool if using them more than 9 days. If there’s fit and the carrier wishes to W2 employ the driver, they have our blessing. There are no finder’s fees.
The root cause of the shortage can be solved by having some drivers think, act, and be treated as if they were independent businesses in a special environment, which we provide. From a classification standpoint, being “independent” necessitates that drivers not be employees of either SlipSeat or the carriers using them; otherwise, those transactions won’t be macroeconomically beneficial or help to solve the shortage.
Because of this, SlipSeat is designed so that drivers (and other vendors) will be independent contractors to SlipSeat. Our hope is that carriers will use drivers (and other vendors) as independent contractors as well; however, whether carriers can classify them as such is dependent on whether their operations comply with the joint employer laws of their state. From the carrier’s standpoint, these laws govern their classification of the 3rd party drivers it uses from driver leasing companies or SlipSeat. Generally speaking, these laws assess whether a company using a 3rd party worker is a de facto employer (i.e. really calling the shots, even though on paper they seemingly don’t).
As much as possible, we hard coded a system where drivers would think, act, and be treated as independent businesses by the carriers that use them, which means it is expressly designed so that carriers do not call the shots. Because of this and the fact that our solution to the shortage is predicated on drivers filling their downtime voids with work from numerous carriers (hence the name SlipSeat since truck drivers slip seat themselves), it is unlikely that a carrier would be seen as a de facto employer.
As such, most carriers should be able to classify drivers as independent contractors – without making any changes to their operational policies or procedures – provided they use the system as intended and do not treat drivers as internal employees. However, it is still recommended that carriers check with a qualified professional regarding their unique operational situation.