Odd Lots - This Is The Legal Mess Now Facing the Trucking Industry

Episode Date: October 28, 2022

When people think about the so-called 'gig economy' they probably first think about Uber. But truck drivers are arguably the original gig workers. And driving a truck is one of the biggest professions in the US. So how should laws designed to protect the rights of gig workers apply to the trucking industry? And what do truck drivers actually want? On this episode of the podcast, we speak with Rachel Premack, the editorial director at Freightwaves and the author of the MODES newsletter, to understand the legal ambiguities and how they relate to deregulation efforts that are multiple decades old.See omnystudio.com/listener for privacy information.

The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gurra. Join us every Saturday and Sunday for the new Bloomberg this weekend. I'm Christina Rafini. We'll bring you the latest headlines, in-depth analysis, and big interviews. All the stories that hit home on your days off.

And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture. On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world. That on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television.

Listen on Bloomberg Radio, stream the show live on the Bloomberg business app, or listen to the podcast. That's Bloomberg this weekend. Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg Television, and wherever you get your podcasts. And welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthall.

And I'm Tracy Allaway. Tracy, when you think about like the gig economy or gig economy workers, like what first comes to mind for you? Uber, Lyft, has to be. Right. I mean, I think for everyone, I think that's the answer. Freelance journalism, maybe. Freelance journalism.

That might be like the next one. But it is a good point that like what we call the gig economy, that everyone like has this idea of like these sort of like marginally attached workers. People think of as a new thing. It's actually been forever. So obviously something like freelance journalism has been around forever long before anyone had heard of an Uber lift. Absolutely. I think gig economy workers just kind of gave it a new label that made it sound a lot more modern than it maybe was.

But one of the classic examples, I suppose, of a gig worker has to be a trucker, an owner-operator in the trucking industry. Right. And we've obviously talked about trucking several times on several past episodes. But when you think about like sort of like an individual who is also their own boss, who may, you know, go from one company to another who, you know, does not have sort of like some permanent full time arrangement. Yeah, obviously it's like trucking, I think is the number one in terms of the sheer number of people or number one or number two maybe like Amazon warehouse workers up there. But the most common job, I think, of the U.S. or one of them. And, yeah, I think by any sort of definition of what we would call a gig worker, I think many truck drivers would obviously qualify. Right.

And in recent years, we have seen efforts to improve working conditions for gig workers. But it kind of gets into this gray area where, yes, a lot of gig workers are exploited. A lot of them are working under suboptimal labor conditions, earning less pay than they would if they were actual employees, certainly less benefits. But there's also a certain type of gig economy worker that maybe values some independence and likes working as an independent contractor. Right. So this really gets at the question. And people look at arrangements like with Uber and there are people who view this as exploitative or unfair to the worker or the workers are being deprived benefits that perhaps, employee should get. And then there are also people who say, you know what, I like the flexibility of being an Uber driver. I like the arrangement of not having a company being my full-time employer. And I think all of these things clearly apply to truck drivers as well. And knowing the right

legal frameworks to think about these things is pretty complicated. Yeah. And, you know, I mentioned this idea of a gray area and trucking. I mean, it's already a gray area. And it's sort of like just stepped into another gray area because it's been caught up. in some of the legal issues around gig economy workers, specifically in California, but there's also legal issues elsewhere in the U.S. as well. All right. Well, let's dive more into this question about how some of these sort of legal thinking regarding gig economy workers or gigs in general are intersecting with the trucking industry.

We have a friend of the podcast, Rachel Premack, the editorial director at Freightwaves, and the author of the Great Mode's newsletter joining us. She's written a lot about these issues. So Rachel, thank you for coming on the show. Thanks for having me. Absolutely. So why don't you sort of, I mean, first of all, is that kind of right that we talk about gig workers, but, you know, in terms of basically the employment arrangements of truck drivers, what do they look like? And do they basically fit in with what people generally have in their mind of what a gig worker is? Yeah. So right now, there are about 2 million employed long-haul truck drivers in the U.S. about 300. to 400,000 of those are owner operators, and the rest are employees of either, you know, small trucking fleets of maybe 10 to 100 or a few hundreds of other truck drivers, or they

are employees of fleets of so-called mega-fleets that would have thousands or even tens of thousands of truck driver employees. But the owner-operator community in trucking is pretty substantial, and it does really set, you could say, the culture for the larger trucking industry as well. A lot of drivers might start out as employees and, you know, have the goal of being owner operators. But generally, you know, owner operators are a pretty big part of trucking. And they definitely would count as the so-called gig economy, even though it's not really, we don't really think of them the same way we think of Uber, Lyft, or DoorDash. You know, I mentioned we've done several episodes about trucking. And of course, we talked to your,

I guess, boss, Craig Fuller at Freight Waves. And that was one. of the eye-opening things I think for us is just like how easy it is to launch a new truck and company, tens of thousands. They're like, well, why don't we launch our own trucking company all the time? But this kind of gets into something I wanted to ask you, which is what are the requirements right now when it comes to being a truck driver? And how does it work on a state level? Because we're going to be getting into some of these state differences versus a federal level. Right. So to launch your own trucking company, you You need insurance, you need the authority to launch a company.

You need the funding to secure your tractor and perhaps also a trailer. You need a commercial driver's license. It is absolutely one of the easiest businesses to literally start. People kind of compare it to the restaurant industry where you can very easily open your own trucking business and be a small business owner. So it is, you know, people who are in favor of this current structure of the trucking industry say it is really the classic version of the, quote, American dream. So just to make it clear, and you sort of broke it down, there's the owner-operators and then people work for a small fleet and then kind of mega-fleets. The people who work for the fleets, do they have the same, like, tax and employment status that, like, me and Tracy would have in Bloomberg where we're just employees of a company?

like what are the different, I guess, like employment and tax arrangements that one can have in the industry? Right. So they're definitely like good jobs to have in trucking and not so good jobs. So it gets a little complicated because you have your, you know, classic employee of a trucking company. And they're actually not paid, you know, a salary or even an hourly salary. They're paid per mile. And that's just across the entire trucking industry is that you are paid per mile rather than for every hour that you're spent on the job. So you could be an employee of a so-called megafleet, or you could actually be a least owner operator for a megafleet, meaning you have the benefits of employee, which, you know, more stable work, more stable pay, but you also have that flexibility that true owner operators have. So it does get a little bit of a gray area when you're looking at least owner operators versus full-on owner operators who just truly own their own truck and own all of their own assets. But, yeah, I think drilling a little bit deeper, whether or not you are a least owner operator, a true owner operator, or a true employee, you are still being paid per mile. In the case of a least owner operator or a true owner operator, you are covering your own health insurance, you're paying for meals and gas and these sorts of things that you have on the road,

the difference is really whether or not you want some form of protection from a large company or you'd rather just be fully, truly on your own. So when it comes to the per mile payment, I remember this is something that came up in some of our episodes from last year where we were talking about congestions at the ports. And truckers getting very, very upset that they had to wait for hours. I mean, in some cases, you know, 12 or 14 hours in order to pick up loads, they're not paid for those wait times. but obviously it's eating into their ability to earn money. So when it comes to the new gig economy regulation, specifically in places like California, on the surface,

it feels like there should be some truck drivers who are like, yes, pay me a salary, pay me benefits. And yet, according to the things that we've been reading, it seems like there's some resistance. So why is that? Yeah, it's definitely a, it's an issue that I think is, really confusing to a lot of, you know, labor activists in the trucking world, you know, why we have seen protests at the port for the passing of AB5, which basically requires owner

operators to become employees rather than full owner operators. It's a little unclear why the current system is really, you know, tightly held onto. And it has been sort of the case for decades in trucking where owner operators who do not have the same sort of worker rights and steady sort of pay that full-on employees in trucking have, they are very defensive and protective of the system, even though, you know, from the outside perspective, it's not really a system that is particularly beneficial to their pocketbooks and livelihood at the end of the day. But, you know, if you are becoming a truck driver, you're probably someone who is very fiercely independent, you are taking that job because you want to be literally alone in a truck all day.

It's not really a job you take if you're like, oh, I really enjoy, you know, leadership and working with others. Being part of the team. Yeah, it's literally the- A large corporate environment. Yeah, you literally take the job because you don't want anyone bothering you. So it makes sense that even when it comes to being an owner operator, they would prefer not to have any sort of government interference.

On top of that, they don't view themselves as employees. They view themselves as small business owners. They're viewing themselves as building a business, building a life for themselves, rather than, you know, being a wage slave, you say. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about our new on-demand news report delivered right to your podcast feed. Bloomberg News Now is a short five-minute audio report on the day's top story. episodes are published throughout the day

with the latest information and data to keep you informed. Yes, there are other products like this from a variety of news organizations, but they usually rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes that can only be heard

on Bloomberg News Now. And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes, so you're always getting the latest stories and developments. Get the reporting and the context from Bloomberg's 3,000 journalists and analysts we're all over the world.

Listen to the latest from Bloomberg News Now on Apple, Spotify, or anywhere you listen. Well, back up for one second. So what would if the California regulations were to go on full force and apply to owner operators, what does that mean specifically? Like, who would be the employer? Who would have the obligations? The entity that they're driving a load for? Like, what is the current arrangement between, like, I just don't really get, like, what the, what the theoretical endgame looks like if these regulations were to fully apply to truck.

Right. So if you are a, quote, true owner operator, you own your own truck, you own your own trailer. Nothing really changes for you because you are literally just on your own. This is your business. That's just you. But many owner, many truck drivers, especially port drivers, are those least owner operators I had mentioned, where you are least owner, on to a larger company, they are the ones who are, you know, actually paying your paycheck, but you don't have the sort of protections that you would have as a full-on employee, you know, including health insurance and paid medical leave and pay time off. So in the case that this law is enforced in the way that they are saying it's going to be enforced, the carrier, the trucking company would be the one paying the salary and the so-called shippers, you know, Macy's home

Depot, whoever it is that have the loads at the ports, they would still be paying that trucking company. So it wouldn't change much for the shippers, except I imagine their rates may increase a bit. Right. So this has been a talking point from some sides of this argument that if you have this new regulation come into effect, all of a sudden shipping rates are going to soar at a time when, you know, we've already seen shipping rates go up quite a bit. It most likely would increase the rate to move a truck load, you know, just at that point of the supply chain where, you know, you're trying and move this load from the port to a terminal, to a place where they can, you know, move that to a different truck that would move that across the U.S. or move that onto a round car or, you know,

any other sorts of next point in the transportation system. I think there is some debate and some question, you know, just because of how bad the labor situation is specific. at the port of L.A. in Long Beach and at those terminals, you know, some might say, you know, it's overdue, and we've been paying too little at this point for this service where, you know, some drivers are allegedly working up to 20 hours a day, where they might not even be receiving a paycheck or some are even paying to work. You know, the abuses, the labor abuses at, you know, these ports have been pretty well documented, and it is, you know, some critics of the current system would say, you know, it is overdue that rates go up, essentially.

So one of the, you know, one of the things we've learned in the course of our episodes about trucking is that there's like two distinct trucking markets and there are the port drivers and then they're the long haul over the road drivers. And you were talking about this sort of like culture of independence and people get into trucking, you know, there might be a reason that they're not sitting behind a desk and some email job. But is that true for the, like, is the culture of port trucking? the same as the over-the-road, like, convoy-style. They made movies about it.

Like, is that the same? Because my understanding, or at least my impression, was that the port drivers were more immigrants and people who had fewer opportunities in the first place. And also, and sort of related to that, and, you know, you mentioned that there have been these protests in California against AB5. Are the people who are coming out to protest them,

do we have reason to think that they're, like, representative of the broader, trucking industry or is it just like a certain subset within that space who is particularly threatened by this? You know, it's funny. I have reached out to truck drivers kind of like in my network to ask what they think about 85. Most of them are long haul drivers. Many of them are based in the Midwest or, you know, the southeast. And when I ask them like, oh, what do you think of this law? They were like, I don't care. It's in California. I don't live in California. So there is definitely like, oh, this kind of idea of like, oh, that's happening in California. I don't, I don't, like,

really care about California because I don't live there. And that's by, that's by design. The port drivers, though, it is definitely a different, it's definitely a different, like, ethnic makeup, I would say. So, you know, the current, like, statistics that I've seen is that, you know, long-held truck drivers tend to be median age of around 55 to 60, mostly white. you know, but there are plenty of, you know, black or even Punjabi truck drivers. So that it is, but, you know, probably like 60 to 70 percent white, you know, mostly conservative, basically everything you kind of picture when you picture a truck driver. But the port drivers are definitely quite different, especially in Southern California.

It is mostly immigrants from Latin America or East Asia. Right. The ages are a bit more diverse. It's not all, you know, people in their group. 50s or 60s or 70s. And I can't really comment on what their political leanings are, but it is definitely just it's a much different demographic, I'd say. Can I just ask one follow up?

You said when you talk to truck drivers, they're like, well, I don't, I'm not from California. What do I care? But my impression is actually it really does matter. And part of the reason this is now a legal debate is because you have California, it sounds like, you know, setting the rules for the entire country. And if there is differences in rules, then that creates problems because trucks cross borders. So can you talk about, like, the tension of California having its own distinct set of laws that versus the other ones?

Yeah. So it really, at this time, the main threat that people in the trucking industry who are against AB5C is other states implementing the same law. It's not so much as, it's not so much the concern is like, oh, California is doing this. Now we all have to do this. It's more, you know, California is doing this, and now we're looking at Massachusetts or Illinois. Both of these states are, ones are moving towards laws like this. So that's really the big concern in the industry.

But, you know, if you're, if I, my understanding is that if your company is not based in California or Massachusetts or Illinois, it doesn't really matter what those state laws are because your company is based not in those places. And, you know, the way the trucking industry is right now is that most owner operators specifically are based in states or areas with lower cost of living just because the job has a median pay around $50,000, $45,000 a year. So it doesn't really make sense to live in, you know, the Boston metro area or, you know, Palo Alto. So most truck drivers, most interoperators are tend to be based, you know, in the Midwest or southeast or Appalachian area. So you mentioned earlier this idea of a very low barrier to entry to

become a truck driver or an owner operator. And I think like deregulation sort of goes hand in hand with the American dream sometimes. You know, you can start your own business from scratch and you don't have to jump through that many legal loopholes in order to do it. Can you talk to us a little bit more about deregulation efforts in trucking in the 80s and 90s, because as I understand it, like they were quite unusual for the industry, and this is really where some of that tension between the state laws versus the federal regulation is coming from. Yeah, so this is my, literally one of my favorite things to talk about. So I'm very glad that we're talking about this. So in, you know, so actually, we're going to go back all the way to 1935, which is when the

trucking industry was, you know, really in its infancy and it was first regulated, in part because of motivations from the rail industry, they're saying, okay, this industry is getting too big. It's way to, basically the rates are incredibly cheap. We need to sort of like interfere and make sure these, it's not as, you know, economically viable to go to trucking rather than go to rail. So that was one kind of reason why we saw in 1935 that the trucking industry was regulated. And by regulated, I mean that every single thing that you move via truck, besides agriculture, which is a whole other topic, basically if you're moving widgets from Des Moines to Detroit, you have to apply to the federal government and say, hey, I want to move widgets from Des Moines to Detroit. And they could

accept your offer. They could reject it. Most likely someone else already has that lane. So, you know, they're going to reject it because they already have that lane. So it was, it was very challenging to enter the trucking industry at that time. And by 1980, which is when the trucking industry was deregulated, we had about 17,000 trucking companies still. So still quite a few. But so by the end of the 1970s with stagflation, all these other topics, lawmakers and economists were really looking at deregulating industries to make things cheaper, essentially. So the idea was, okay, if we deregulate trucking, the cost of everything will go to. down. What they didn't realize is that by deregulating it, that that would also really cut

pay for drivers, essentially. A lot of the trucking companies were raising rates, raising rates in negotiation with Teamsters, and the rates that retailers were paying eventually, essentially just went straight to employees. So by 1980, the industry was deregulated. It wasn't the first deregulation, but it was definitely the most impactful and the biggest. They basically said, okay, actually no routes are regulated. Basically, it's a free-for-all, and you can move whatever you want, wherever you want, it doesn't matter. Right after that, we saw hundreds of trucking and trucking companies go bankrupt. Most of those were unionized trucking companies. They went bankrupt within the first few years of deregulation. There was just a price war and people couldn't stay afloat.

Yeah, yeah. And in its, when all those companies went out of business, most of the companies that replaced them were not unionized. You know, they were smaller drivers. They were smaller companies. So we saw the industry go from 17,000 companies that I mentioned at the end of the 70s to now there are more than 200,000 trucking companies. Some people have called it destructive competition,

just how it's essentially a race to the bottom when it comes to, when it comes to these routes. How unionized is trucking still today? Because, you know, it's funny, like, when I think of, like, the Teamsters or something, it's like, that's the industry that first comes to mind. But how prevalent is unionization? What is their role in this? It's pretty, it's not common.

I would need to check on what the most recent numbers are, but it's a few thousand, I believe, maybe a few 10,000s who are employed. And again, this is out of two million drivers. So you were talking about federal deregulation versus the California Act when it comes to gig economy workers. So what exactly is, like, how much of a mess is this for the trucking industry? And how are people navigating it right now? Yeah. So I forgot to mention, so after 1980, you know, the industry was deregulated.

All the sort of follow-up from that happened. And then in 1994, under President Clinton, he passed something called, called the Federal Aviation Administration Authorization Act. Catchy. I know. I literally wrote it down to my notes to make sure I got every word. But it's also called F4A. So we don't ever have to say that again.

It's just F4A. And what that said is that you cannot, any state cannot pass a law that interferes with deregulation. Basically, no state can have any sort of law that would regulate the pricing or the route or any of these other factors of a trucking movement. And that relates to trucking companies, as well as intermediaries and any sort of other company involved in the trucking world. So the argument is that AB5 by preventing who can be a truck driver and who can be a truck driver employee versus owner operator and what have you, the argument is that that law interferes with F4A because it introduces a regulation to the trucking industry that's not on the federal level.

You know what I think is really interesting about all this is that, you know, thinking about, okay, the last time we had this big bout of inflation, the answer is like, right, deregulate everything, deregulate trucking, deregulate ports, deregulate airlines, deregulate electricity, and so forth. It's interesting now, like obviously we're in this other phase of inflation. And yet no one really talks about that because I think, like everyone thinks, but we've already squeezed everything out of, like, the deregulation lemon we're going to get. And now, like, if anything, our approach is, like, very different, much more, like, sort of, at least the Democrats' approach is, like, much more active involvement in industry, like, purposeful efforts to expand the supply side.

Well, this is kind of what we were speaking about with Ezra Klein recently, right? Like, the idea that previous supply side measures were all about cutting taxes, deregulating, making it easier for people to produce more that way, whereas this new supply side liberalism is more about. actually smoothing the business cycle and how to encourage investment. What's happening with the business? It's like, I think the last time, like, when we were talking about trucking before, is probably when prices were way up, but now they're down, huh? Yeah, so on the business, on the market side, we are seeing, especially for spot rates,

which are more likely to be taken by owner operators or least owner operators, those are going way down. Contract rates are signs of that finally softening, and that affects more of the larger trucking companies. So it's definitely, we're definitely seeing a softening in the trucking market right now. You know, diesel is still really an affordability issue for especially for smaller, smaller companies. Equipment is still hard to come by. There's all, there's still all of these major headwinds, and it is definitely a challenging time to be a small trucking company right now.

I'm Francie Lacqua, an award-winning journalist, and I've got a new podcast, leaders with Francine Lacqua from Bloomberg podcasts. I've interviewed everyone from heads of state to fashion icons about the news of the moment. But I've always been curious who are these people as leaders. I don't think there's one right way to be a leader. Make decisions. A poor decision is always better than no decision. Listen to new episodes every other Monday. Follow leaders with Francine Lacroa wherever you get your podcasts.

What's the sort of macro take on trucking rates? coming down. Like, you speak to people in the industry all the time. What are they saying is that there's inventories are too big and they need to start reducing or, you know, consumer demand is falling off a cliff. Like how important do people think this drop actually is? Yeah. So one estimate from Convoy, which is a freight brokerage, they estimated before that half of all trucking recessions were the Harbinger for a larger macro recession. So for instance, in 2019, we did see a recession in trucking. The trucking recession predicted the pandemic.

Yeah. Right? Just like the yield curve. Yeah. I wrote a story in 2019 about how the yield curve inverting was like was the trucking was the trucking was the precursor for the trucking. Trucking predicted the yield curve inverting and the yield curve inverting predicted COVID-19. Yeah, exactly.

Exactly. So it is a really great trucking is a really great window to look through. the rest of the economy because you can see consumer behavior, you can see home building, you can see industrial. There are all these sorts of elements that you can see through the trucking industry. And for instance, in the 2019 downturn, that wasn't so much a sign of consumer softness, but it was definitely a sign of industrial softness. And now the current downturn in trucking is, I would say, more widely reflects, say, consumer

softness. So there are plenty of macro elements to this. I suppose the big question is how much of that is just people buying less stuff because they loaded up on it in the past couple of years and now we're going to see a shift to services and the economy might still be okay. So you mentioned the freight brokerage convoy when we were at, we interviewed the CEO of a competitor freight brokerage at your conference in May, Matt Piot at Arrived Logistics. This is another legal thing you've been talking about. which is, right, so I imagine the industry must be insured out the wazoo because truck drivers get into accidents from time to time and that's bad. And that could be extremely costly. There's issues now whether the brokerages themselves could be liable.

Can you talk about that particular dimension? Yeah. So also seen at the Supreme Court this summer, along with AB5, there was this case involving C.H. Robinson, which is by far the largest trucking brokerage in the year. U.S. They arranged a movement that went through the state of Nevada. That truck driver who was the client of C.H. Robinson, I believe, went over the median of a road and crashed their car into a 20-something man. It was a very bad accident. The young man is now, was rendered a quadriplegic. and as a result of that, the family and the law firm wanted to not only hold the trucking company accountable for that, but also C.H. Robinson, which arranged the move. So under F4A, as we discussed, a state cannot have any sort of interference or regulation of a brokerage that is not already at the federal level.

So the argument that C.H. Robinson and, you know, the broker community as a whole, they argued that, you know, trying to hold C.H. Robinson accountable for this accident would be in violation of F4A. The Supreme Court looked at this, did not want to weigh in, and that as a result, the circuit-level decision on this case stood and the brokerage is going to be held accountable in court. in a few months. So my big question is you have this federal law F4A. I can't even remember the actual title of it. And then you have these changes at the state level like in California and Massachusetts. It was Massachusetts, right? Massachusetts and Illinois are considering kind of similar laws. Okay. Why won't the Supreme Court hear these cases? Like the Supreme Court seems to be very into activism, for lack of a better word right now. So why wouldn't they try to come up with some sort of decision on something that seems quite disruptive and confusing?

That's a great question. I cannot answer that because I'm not the Supreme Court. But I would like to know, I'm sure. Many people in the industry were definitely interested in knowing that. My assumption is that perhaps they agree with the lower court decision and therefore they're just going to let that stand. but, you know, it does kind of get into this broader issue where we really don't see the federal government want to get involved in trucking at all, which I think the industry says is a good

thing, but now with the current issues with AB5 as well as the Robinson case, now the industry is saying, like, please, we need guidance, like, please someone step in, which is really unusual for any industry, but especially unusual for the trucking industry, which is historically pretty anti-regulation. But at this point, the struggle is really that, you know, in the industry, they're not really sure how best to move goods across the U.S. because it could get to the point where we have 48 distinct countries essentially in one country. So I guess this is kind of the argument for like the case against state-level regulation, right? Or why state-level regulation, right? Or why state in theory shouldn't be allowed to interfere, which is that you then that can interview with

like, interfere with like cross-state commerce and create, yeah, 48 separate countries if you want to move something from California to Florida and you have to comply with like each state's law on the way. I just want to like go back though to like this like question and the AB5 question. We know like about the protesters and the culture of trucking, et cetera. Like have you encountered people? There must be people who drive today that want these new productions, want these new arrangements? Because again, like when you read, you know, it's like USA Today, one that like a Pulitzer a few years ago for like pretty awful conditions for a lot of these drivers. Have you found any that want these changes? So a lot of them are fearful of speaking out on actually

the, on their, they're basically, it is really challenging to find drivers who will speak honestly about these. They mostly speak anonymously. But there is definitely, you know, a sector of the trucking community right now that is, you know, that does want more regulations. The other thing to know is that there is definitely some misinformation in terms of like what being an employee can do for you. You know, there is some misunderstandings around, okay, actually like if you are classified as employee, like you can get health insurance. You can, you know, take time off when you want to take time off. I think the other, the other sort of like larger complication here is how how much will this law be enforced? Because we have seen other sort of court decisions, you know, ruling

on how, you know, certain ways that the trucking industry needs to operate. Maybe they have to pay the fine. They have to pay out the class action fine, but it doesn't really change how the industry works. So I think there is kind of some opinions around, you know, is this even going to happen? Like, will this even help me? Rachel Premack, thank you so much for coming on Odd Lots. Yeah, thanks for having. Love trucking episode. Yeah, that was fun. Thank you. You know what I was thinking about Tracy with F4A in particular? I don't know if you remember like at the beginning of the Biden administration. It was like, oh, is neoliberalism dead episode?

Did we? Yeah, and Mike Conchso was on. But one of the things or one of the points that he made was like this idea of like, okay, neoliberalism setting some rules and then encasing it so you can't change the rules. And I didn't know about F4A before, but thinking about like the Clinton years of this like part of the law itself is that states can't come up with their own laws, like this sort of like self-reinforcing law. It's like, it's very, it's very Clinton. Maybe what we need is a European Union for America for the free movement of goods and people so that we don't end up with 48 countries.

Well, right? Like, I mean, that's like, right what Britain is dealing with right now. I mean, there are probably some really good arguments in favor of not having a patchwork of 48 different transportation regulations. Yeah. I mean, you can see, you can see someone arguing that this is, you know, this is an industry that is basically cross-state. Yeah, it has to be. And therefore, maybe someone wants to coordinate a little bit. But, I mean, I'm sort of amazed the number of times that this, like, patchwork of state rules actually comes up in our conversations. Yeah, no, it's kind of striking that anything gets done. But right, like, it's really hard to imagine how you could have cross-state transportation if each state can come up with its own rules.

It's also just interesting. And I was really struck what I like hearing Rachel talk about, like, how much deregulation was in response to a past period of inflation, which is the theme that's been coming up lately. And how, like, we're kind of like taking very different approaches now to, like, this period of inflation. Yeah. I think that's a really interesting theme to pull out. The other interesting thing to me is just that that trucker culture, which we've kind of spoken about a number of times now in this idea that you have an industry that values their independence, that seems to. to be de facto against stricter rules, even if some of them might ostensibly help them out. It's interesting to sort of like observe that.

And I guess it's hard, to Rachel's point at the very end of the conversation, it's hard to get a read on people who maybe feel differently to the consensus because no one really wants to speak out, right? Right. And I think that there's like, who can speak out? The over the, the operator is over the road who like they make movies out of it sort of glamorized, like presumably they could speak out, but also, I don't know, my assumption would be that if you are a lease owner operator, you're an immigrant with tenuous networks here, limited English, that you're

less easy. And so, you know, when you think about like this culture of trucker, I keep culture of truck drivers, you know, I keep wondering, is there a culture of truck drivers that doesn't break through to the media, another culture of truck drivers? And the other thing that this reminded me of, and this was what we spoke about at the Freight Waves Conference was the future of the freight brokerage model, right? So here you have essentially a middleman role matching, you know, people who want to ship goods with actual drivers. And it just seems like with that liability issue, that could be a burden on, I think, an industry that's already facing some pressures. Yeah, that seems like it's going to be its own. But at the same time, if their only job is to match customers with

safe drivers and then that driver has an accident, then you're kind of asking, what are they? What are they even doing? Well, then the question is, how well did they screen? Yeah. Like, that would be presumably that's the question is how, to what degree did the ostensible driver safety actually? Like, how did they screen that? Well, I suppose they would argue that drivers are regulated.

Like, they have to pass a commercial driver's license. And so it's the government's fault if the driver isn't very good. But anyway, okay, we can argue. We're just speculating at this point about other other companies, legal strategies. that we really have no idea about. Shall we leave it there? Let's leave it there. Okay.

This has been another episode of the Allotts podcast. I'm Tracy Allaway. You can follow me on Twitter at Tracy Allaway. And I'm Joe Wisenthall. You can follow me on Twitter at the stalwart. Be sure to follow our guest, Rachel Premak. She's at RRPRE and check out her newsletter modes. Follow our producer, Carmen Rodriguez, at Carmen Armin.

And check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening. Tom Keene inviting you to join us for the Bloomberg Surveillance Podcast. It's about making you smarter every business day. I'm Paul Sweeney. We bring you complete coverage of the U.S. market open. We cover stocks, bonds, commodities, even crypto, all the information you need to excel. And I'm Alexis Christophers. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that through conversations with the smartest names in economics, finance, investment, and international relations. We do all this live each and every week.

weekday, then bring you the best analysis in our daily podcast. Search for Bloomberg Surveillance on Apple, Spotify, YouTube, or anywhere else you listen. On the East Coast, listen at lunch. And on the West Coast, listen as soon as you wake up. That's the Bloomberg Surveillance Podcast with Tom Keene, Paul Sweeney, and me, Alexis Christophores. Subscribe today, wherever you get your podcasts. Bloomberg's Surveillance, Essential Listening, each and every business day.