FMCSA task force calls for ban on carrier lease-purchase agreements

An FMCSA task force is pushing Congress to ban carriers’ lease-purchase agreements.

The Federal Motor Carrier Safety Administration’s Truck Leasing Task Force submitted its final report to Congress, analyzing lease-purchase agreements in the trucking industry. The task force reached a clear, unanimous consensus: Lease-purchase programs through carriers should be prohibited.

“Congress should ban commercial motor vehicle lease-purchase agreements as irredeemable tools of fraud and driver oppression that threaten a safe national transportation system and diminish the number of truck drivers attracted to and who stay in the trucking industry,” the report said.

The task force recommended the ban specifically for lease-purchase agreements where a motor carrier simultaneously controls the driver’s operations, compensation, and debt.

The group said the programs “are regularly established to enrich motor carriers at the expense of drivers” and have no adequate checks or remedies. If not banned, the group recommended these agreements undergo a regulatory overhaul.

David Heller, VP of government affairs at the Truckload Carriers Association, stressed that the industry has many positive, successful lease-purchase agreements that benefit both the driver and carrier.

“If [lease-purchase agreements] were all that negative, they wouldn’t still be around,” Heller told FleetOwner. “But because there are some very successful ones out there, it shows a sticking point. It creates a manner in which people can achieve their goal of being an independent business owner.”

Here are key takeaways from the report.

‘Not legitimate vehicle leases’

The report focuses on one kind of lease-purchase agreement: those where a motor carrier both loans the truck and dictates the driver’s operations. The task force did not focus on leasing arrangements through separate financers.

The data behind the report

The Infrastructure Investment and Jobs Act required the Department of Transportation to form the Truck Leasing Task Force to examine truck leasing agreements and the opportunities they provide, whether they are inequitable, and whether they harm commercial vehicle safety.

The Truck Leasing Task Force held public meetings from July 2023 through December 2024 to hear industry members’ experiences, collect available data, and review common agreements.

Outside of federal statistics, class action lawsuits were some of the most-cited sources in the report. While few leased drivers end up pursuing litigation, the task force used these significant suits to inform its report:

Lease-purchase agreements through motor carriers introduce a significant power imbalance between the carrier and driver, the report found. Carriers in these agreements set the compensation rates, truck payments, insurance payments, fuel purchasing, maintenance, and more. Many drivers cannot negotiate the contract’s terms, nor can they take the contracts home to review before signing.

“These drivers are almost always classified by the motor carrier as an independent contractor despite the fact that the carrier has near or total control over the driver and their operations,” the report reads.

The programs are most popular in the for-hire truckload and drayage operations. Drivers see promises in the agreements for truck ownership, operational independence, and financial freedom—but the task force said it found no evidence of those benefits. Few lessees can afford to endure the contract’s length, and the payments often accrue no equity on the truck anyway, the group said.

“These are not legitimate vehicle leases,” the task force wrote, finding that the agreements often include no underwriting, depreciation accounting, or assessments for creditworthiness. The report said that offending motor carriers often specifically target drivers with low credit ratings.

According to the Consumer Financial Protection Bureau’s supplemental report, the lease-purchase agreements fall short of conventional vehicle financing standards. Carriers’ agreements feature confusing earnings projections, a lack of financial disclosures, broad default provisions, and wide remedy provisions. In some cases, carriers triggered defaults on leases for no reason at all.

Carriers of all sizes use forms of lease-purchase programs, too. The report pointed to fleets with as few as 95 power units up to industry giants like Knight-Swift (No. 3 on the FleetOwner 500: Top For-Hire) with more than 29,000 power units, which all used lease-purchase arrangements as a source of revenue and labor.

The report drew from the Roberts v. TransAm class action lawsuit to determine that these lessee drivers are often paid significantly less. Drivers under the lawsuit made less than one-third of the industry’s average compensation. When classified as independent contractors, the carriers also pay less for drivers on government worker programs like unemployment or Medicare.

Financial harm to drivers

The task force dug through public court records and estimated that at least 200,000 interstate drivers, roughly 5% of the current truck driver population, were affected by predatory lease-purchase agreements.

The report said that the total number of affected drivers is likely much larger than court records show, since there is no organization that collects data on these programs. “This is due to the reality that most drivers do not complete these programs and leave the trucking industry in deep debt and with a sense of failure despite promises of financial independence,” the report said.

After they fail to complete the lease, drivers may end up further indebted. Many drivers who experienced predatory agreements received negative paychecks after deducting costs from take-home pay. A driver manager for an Iowa-based carrier with 6,000 drivers testified in a class action lawsuit that he considered it fortunate when he only talked to drivers once a week about negative paychecks.

The task force found little evidence for successful lease-purchase programs. The group estimated that less than one in 100 participating drivers end up owning the truck, and suggested the true number is more likely to be one in 1,000. Only one carrier provided data to the task force in support of lease-purchasing, and the task force said that the carrier’s data was consistent with a one-in-100 estimate.

“Data TLTF saw suggested that driver success is rare enough that programs seem designed to ensure failure for the overwhelming majority of drivers,” the task force said.

Task force recommendations

The task force characterized these lease-purchase programs as predatory, oppressive tools of fraud. The report recommends that Congress ban the agreements or, if not outright prohibit them, significantly overhaul the regulations.

The report recommends several ways to overhaul lease-purchase agreements. Some of the recommendations include:

Require carriers to maintain accurate records of the agreements, including pay and operations.
Mandate the disclosure of the agreement’s exact financing and operating conditions.
Create educational materials on the agreements in driver training.
Require specific contract provisions in the agreements.
Audit companies deploying lease-purchase programs to ensure labor compliance.

Trucking industry responds

Like TCA, the American Trucking Associations stressed that the lease-purchase arrangements can offer opportunity to drivers.

“We are reviewing the report and the recommendations that were made by the task force. The independent contractor/owner-operator model in trucking has stood the test of time," ATA told FleetOwner. "It has been used since the industry's inception and has empowered women, minorities, and immigrants to pursue the American Dream. American Trucking Associations is committed to protecting individuals' right to choose work arrangements that align with their unique needs and goals.”

The Owner-Operator Independent Drivers Association, which has criticized these kinds of lease-purchase agreements for years, supported the report’s findings.

“Many people are drawn to trucking under the belief that hard work guarantees success,” OOIDA president Todd Spencer said after the report published. “But predatory lease-purchase agreements prey on that trust, leaving drivers financially and emotionally broken.”