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Top performer in Variant’s ambassador program made $100K before driving a mile

LOUISVILLE, Ky. — The Variant initiative at U.S. Xpress — building a radically different truckload carrier within an existing one — has long touted what it sees as a strong feature: better driver retention.

The fourth-quarter earnings at U.S. Xpress (NYSE: USX) were the first that broke out operating statistics for Variant. Unfortunately, what they showed was that while driver retention at Variant started 2021 at a solid turnover rate of 58%, compared to the 150% rate from 2019 for the legacy company, the turnover rate for Variant had slid to 95% by the fourth quarter. It had risen from that first-quarter level to 74% in Q2 and 81% in Q3 before the sharp rise as the year came to a close. (Variant chose to disclose the 2019 turnover rate in its earnings presentation, but did not give a 2020 figure.)

But Justin Taylor and Donald Ramsey are true believers. Ramsey is the head of the Ambassador program at Variant; Taylor is the driver who has taken advantage of the unique “family tree” aspect of driver pay at Variant that allows him to earn 2 cents per mile for every mile driven by somebody he recruits.

The bottom line for Taylor is that last year, more than 50% of his paycheck came from his activities as an ambassador. In an interview with FreightWaves on the floor of the Mid-America Trucking Show (MATS), Taylor said in 2021 he made approximately $185,000. About $100,000 of that was from Ambassador earnings. 

Ramsey said Taylor has made the most money of any Variant driver as a result of the Ambassador program. Asked if that has caused resentment, Taylor said, “Oh, absolutely. I am the most hated man in the company.”

The program has gone through some changes but the core idea remains the same: Recruit somebody to join Variant — as long as that person is not a driver in the legacy U.S. Xpress business — and you get 2 cents for every mile he or she drives.

There also is a sliding scale for building a “family tree.” As Taylor and Ramsey described it, if driver A recruits driver B, driver A will receive 2 cents per mile for every mile driven by driver B. But if driver B recruits driver C, not only will driver B receive payment for the miles driven by driver C, but so will driver A as the person who started building the chain. 

“My elevator speech is simple,” Ramsey said. “You can go to other companies and make more per mile. You can go elsewhere and probably have more miles per week. But there’s nowhere in America you can have the earning potential of being an ambassador.”

If Taylor’s roughly $185,000 is taken as a high-water mark — at least for now — the reality is that a driver can make more than that. In a presentation at MATS, representatives from ATBS said 10% of the owner-operators that the financial services and accounting firm represents made more than $225,000 last year. But those are independent contractors; they aren’t company drivers like those at Variant.

The Ambassador program is unique in that it could almost be described as exponential. If a driver’s family tree grows, the paychecks are higher even if the miles driven by the person at the top of that tree hold steady. The more people on the tree, the higher the number.

But this is no pyramid scheme. “It’s untapped earning potential,” Ramsey said. “There’s no fee, there’s no buy-in that you have to do. You never have to pay a penny. It’s just what can you go earn.”

Taylor’s family tree is impressive: It has 66 drivers whom he personally recruited. Toss in the ones those 66 brought on and it’s up to 80. He said it is the largest tree at Variant.

He transferred to Variant after about nine months at U.S. Xpress.

“Whenever I take a vacation, I get vacation pay, and I still get paid for the others who are driving,” he said. 

Taylor was at the Variant booth at MATS and discussed his approach toward recruiting in a venue like a truck show. 

He said he asks drivers where they live and whom they drive for, mostly to determine that they aren’t already with U.S. Xpress, where a transfer into Variant wouldn’t pay Taylor any money in the Ambassador program.

“I ask them, ‘How are they treating you over there?’” Taylor said. He probes drivers about what aspects of their current jobs they don’t like, “and then we go from there. I usually get a vibe if they are unhappy, and then I can plant that seed. Some of them might be a little irritated but not enough to make a decision now.”

One part of every discussion, Taylor said: the existence of the Ambassador program.

The recruiting pitch also focuses on people who are company drivers now but are looking at taking the leap into being an owner-operator, with the prospect of more money as a key enticement. Variant’s argument is that a driver who capitalizes on the Ambassador program can bring in owner-operator pay without the burdens of running an independent business. 

Taylor’s numbers are high enough that he clearly has embraced the Ambassador model, but he and Ramsey made clear that not everybody does.

Not all Variant drivers become ambassadors. As Ramsey put it, some new hires “just want to drive. Some people are introverts and have no interest.”

In its fourth-quarter earnings report, U.S. Xpress reported 1,555 Variant drivers at the close of the quarter, up from 951 at the end of the first quarter. Taylor and Ramsey estimated the number of ambassadors at between 275 and 325.  

U.S. Xpress’ earnings for the first quarter, which based on past practice are likely to be released in the final week of April or the first week of May, will be closely watched to see if the turnover rate at Variant — supposedly one of the key selling points of its value proposition — rebounds from its 95% rate of the fourth quarter.

In the fourth-quarter earnings call, U.S. Xpress CEO Eric Fuller said some of the poor performance for those three months was that management at Variant (its president was terminated in early December) was focused on too many big-picture items and not on the day-to-day issues with the driver fleet. 

That focus, Fuller said in a transcript provided by SeekingAlpha, “resulted in an inability to adequately resolve driver issues. As the fleet grew, so did the issues from our drivers, which led to deterioration in response times and increased driver frustration and an increase in driver availability.”

Driver management at Variant does not operate on the traditional fleet manager model, which Taylor said he cites in his recruiting as a reason to join the company. In the earnings call, Fuller said he still has faith in that model.

 “We continue to believe in an exceptions-based approach to fleet management, which will scale better and at a lower cost than the traditional fleet manager,” he said.  

Even without a manager, there is the prospect that the person sitting at the top of the family tree the driver is on may check in with the people underneath them; after all, the driver’s success would result in success for the person at the top of the hierarchy.

Taylor said some drivers he’s recruited don’t want to be contacted at all. “Some don’t want to be my groupie,” he said.

But there are others who “call me four times per day,” Taylor added. The amount of contact is “built around their needs and preferences.”

Disclosure: FreightWaves founder and CEO Craig Fuller retains ownership of U.S. Xpress shares through his family trust.

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