Fuel Surcharge – To Split or Not to Split

As a 1099 contract truck driver, there can be several benefits to splitting the fuel costs with the owner of the truck. Here are some potential advantages:

1. Cost Sharing: By splitting the fuel expenses, both the driver and the owner of the truck can share the financial burden. This arrangement can help reduce the overall expenses for the driver and increase their profitability.
2. Fairness and Equity: Splitting fuel costs promotes fairness and equity between the driver and the truck owner. It ensures that both parties contribute proportionally to the expenses associated with operating the vehicle.
3. Incentive for Fuel Efficiency: When drivers are financially responsible for a portion of the fuel costs, they are more likely to be mindful of fuel consumption and drive in a fuel-efficient manner. This can lead to cost savings for both the driver and the truck owner.
4. Motivation for Profitability: Sharing fuel costs can create a shared financial interest between the driver and the truck owner. The driver has a greater incentive to maximize their efficiency and productivity, as it directly impacts their earnings. In turn, the owner benefits from having a motivated driver who aims to increase profitability.
5. Improved Relationship and Communication: Splitting fuel costs requires ongoing communication and coordination between the driver and the owner. This can foster a stronger working relationship and open lines of communication, leading to better collaboration and understanding between both parties.
6. Flexibility in Negotiation: Sharing fuel costs allows for negotiation and customization of the terms between the driver and the owner. They can establish a fair and mutually beneficial arrangement that suits their specific needs and circumstances.
7. Potential Tax Benefits: When drivers share fuel costs, it may be possible for them to claim those expenses as business deductions when filing taxes. This can help reduce their taxable income and potentially lower their overall tax liability.

It’s important to note that the specific benefits and arrangements can vary depending on the agreement between the driver and the truck owner. It is advisable to consult with a legal or financial professional to understand the implications and ensure compliance with relevant regulations and laws.