FedEx’s drivers are classified as independent contractors so FedEx doesn’t need to pay them benefits. But many drivers claim that they are treated like employees so should get full benefits. Well, it seems that their claim didn’t go very far. Today, Bloomberg reported that “FedEx drivers were found by a judge to be independent contractors...”
This seems like a great win for FedEx; having independent contractors gives the company a huge cost advantage over their rival UPS, which gives full employment benefits to their drivers (who, by the way, are unionized). But while UPS has high labor costs, it has amazing operations. They constantly improve their processes to make sure that their employees are as productive and as safe as possible. They also manage their trucks in a way that minimizes fuel costs and hence their carbon footprint. They are also known for outstanding customer service.
I wonder if the fact that UPS has to live with high employee costs make them innovate in ways that FedEx would not even dream of.