You’ve heard of cooperative business models. But what are they, really? In this webinar, our experts break down exactly what a co-op is, how it serves the transportation and final mile industries, and the benefits DCN provides to our member-owners and subscribing clientele.
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Highlights:
- Cooperatives are organizations owned and run by their members
- Independent contractor truck drivers, couriers, medical transport drivers, and other independent transport specialists can join DCN to become a member-owner, gaining access to essential benefits that they may not otherwise receive
- Subscribing clients that need independent contractors can contract DCN member-owners, protecting themselves from a number of legal gray-areas, including worker classification compliance issues
Webinar Transcript:
Sara:
All right. Hi, there. Welcome to our conversation with DCN about their unique solution, “Cooperatives and the Transportation Industry. Thank you so much for joining us today. I’m Sarah Pelletier, I’ll be serving as the moderator for today’s conversation. Jeff, do you wanna introduce yourself?
Jeff:
Yeah. Sure. Thank you so much for joining us today, everyone. I’m happy to be able to impart some information about our successes and advice for transportation professionals. Hopefully, our advice helps you, or we can provide you with a possible solution. I’m Jeff Lehrbach, the Chief Marketing Director over at Distribution Cooperative Network or DCN. I’ve been with DCN in various roles since May of 2017. As well, I’ve owned and operated my own transportation consulting business, so I’ve worked on both sides of cooperatives, which has opened my eyes to some of the areas that we’ll discuss today.
Sara:
Thanks, Jeff. So today we’re going to be discussing how DCN supplies the specific building blocks necessary to help the unique nature of the transportation industry while also supporting the businesses that contract those independent workers. We’ll discuss exactly what a co-op is, the benefits DCN offers as a co-op, and DCN specific solutions for the transportation industry. By exploring these topics and the solutions DCN offers hopefully we will offer a way to look at and improve people’s position in the transportation industry in general. That being said, let’s jump right in here by establishing what we’re referring to when we say “co-op.” Jeff, do you wanna jump in here?
Jeff:
Absolutely, yeah. Thank you. To start, I guess, a cooperative or “co-op” is an organization owned and run by its members. It’s pretty plain and simple. The members each act as a stakeholder, sharing in profits and receiving benefits for their membership. Co-ops appear in a wide span of industries really, from childcare, to farming, to solar energy, and of course, transportation. It’s in transportation where the co-op model has really stood out in recent years.
Sara:
Exactly, and DCN’s co-op model is specifically centered around supporting both the independent contractor side, as well as the businesses utilizing them. Correct?
Jeff:
That’s the purpose of DCN, yes. DCN provides stability for IC’s and protection for subscribing clients. DCN utilizes the co-op model to do the most for clients and drivers hitting both sides of the coin let’s say.
Sara:
So how do you provide that support for the independent contractors and the drivers with DCN?
Jeff:
Well, I guess, regarding that coin, let’s look at the first side in the DCN model. Here, we’re looking at the independent contractors or IC’s, truck drivers, couriers, medical transport drivers, really all kinds of independent transportation specialists. DCN’s model offers them stability and support by way of the co-op model. It creates an incredible environment to keep your independence while having incredible resources that would otherwise not be available. So, it creates a strength in numbers scenario. Further, I guess, think of not just the co-op model, but specifically various factors within DCN that create a firewall against typical concerns independent contractors might have. By keeping the drivers legally protected and providing various other benefits for a wide variety of other critical needs at group discounted rates.
Sara:
So you mentioned that DCN creates a firewall. What would DCN consider the first brick in building this firewall? So to speak.
Jeff:
For us, I think we could probably start with just member control. It’s definitely the first brick. Like other co-ops, DCN’s members or IC’s in this case, in the transportation industry are the owners of the organization. They are member-controlled, DCN is member-controlled. Members, actively participate in setting the policies of the organization. They make decisions for the organization on ways and policies that benefit the other members. They also have voting rights, so the members can vote and voice their opinions on different issues. For example, DCN’s members meet every year to vote on policies for the next year. The IC’s are the owners. This creates no dispute that they were employees or are employees anywhere else, a big first brick in our protective firewall.
Sara:
Well, that is important. But also in the world of transportation, that feeling of control and stability in having an organization behind you in that ever-changing field must be such a reassuring thing. It’s just a way to help people who help everyone else. I mean, without IC’s and drivers who would fulfill orders? Who connects the consumer to the business? It’s, it’s a necessary position for our economy to continue to thrive.
Jeff:
Yeah, exactly. And each member, or IC, they benefit from gaining more sense of control in this ever-changing industry. So, you, the driver/independent contractor can flourish in a co-op knowing that the other members chose to be there. The drivers are getting benefits. They’re getting discounted insurance, which provides more security, more support from their fellow cooperative members. But we wouldn’t be able to do it without the other side of the coin, our clients. Our subscribing clients provide work opportunities for our IC’s and have a critical role in the co-op model, DCN utilizes.
Sara:
So let’s look at that “other side of the coin”. The clients, how do they partner with DCN and how does the co-op help them grow?
Jeff:
Well, our subscribing clients are transportation businesses that contract independent drivers in this case, our DCN members. Couriers, medical transportation, and the various other specialists in transportation we mentioned before. The clients would simply sign an agreement with DCN and inform us, which IC’s that they would like to contract. This connects DCN members to the businesses that hire them. And from there they share services and ultimately give the end customers what they need. This directly leads to really another big brick in the DCN firewall. Within the transportation industry specifically, the relationship between IC’s and their contracting businesses, it needs to be clearly defined. This needs to be done to prevent employee misclassification. We’ve written countless articles about this on our site. This is a huge reason DCN was created and why we’ve had the success we’ve had. The DCN model specifically allows client businesses to be in a position where they can utilize the IC’s they need while distancing themselves from any employee status. This aspect of the firewall is essential because it prevents misclassification. How can they possibly be an employee for “XYZ” company when they are an owner of DCN?
Sara:
And how does that work on the DCN side then?
Jeff:
Well, DCN provides many administrative services for our clients to help keep it clear that your independent contractors are not your employees. Through insurance premium collection and renewals, member settlement processing, pay functions, such as lease payments and garnishments, and year-end 1099 processing. DCN provides businesses the best misclassification firewall solution on the market. I guess with ever-increasing laws around misclassification because we mentioned it so often, compliance with employment laws as a client or subscriber, you need the reassurance that your IC’s are clearly defined in their roles. You also need legal protection against any misclassification or compliance problems if they come up. And always make sure IC’s look like who they actually are, which are independents contracted by you to carry out work, you need help with. This is why the DCN model makes an incredible solution for the transportation industry, by providing all the support and services for our members, that you contract, there becomes very little chance that you the business would be mistaken as their employer. DCN may not be a “silver bullet” of protection, that would be hiring them, but we are definitely the best solution out there for independent contractors.
Sara:
Oh, okay. So that’s what makes the DCN model of a co-op stand out here from other more general co-ops. So co-ops offer a great opportunity for clients to feel that support from their very nature and their setup.
Jeff:
Right, exactly. They are funded by the members and the businesses that support them. They’re working to help improve the working relationship on both sides of the coin. For DCN specifically, it makes us able to offer legal assistance and services. In the transportation industry, there are ever-changing rules and regulations about misclassification and compliance. DCN specializes in this area, offering our subscribing clients, compliance assistance. Our model automatically creates compliance with our clients or for our clients. Our model really does so much automatically.
Sara:
Can you explain more about the misclassification elements you’re mentioning here? How can co-ops and DCN specifically, combat the ever-present problem of misclassification?
Jeff:
Hmm, we have, we’ve mentioned it above and I guess, you know, DCN specifically supports the businesses and assists our independent contractors with the complex legal issues that are ever-growing. DCN serves as an intermediary, legally supporting both the client and the IC’s. It sounds repetitive, but it is very, very important. DCN is the firewall that prevents many problems and responsibilities from reaching the client. We help our clients stay away from misclassification issues, benefits, needs, and other potential financial implications. The co-op serves as that ever-present protective layer. You know you’re following compliance laws and regulations, while your IC’s are treated with respect and have access to benefits, they deserve. To that point, DCN isn’t supplying benefits like an employer. The cooperative simply decides on the ones that are most important and beneficial and provides access to them.
Sara:
I see. So DCN helps bridge the gap between the IC’s and businesses. Is it just with this legal issue of misclassification?
Jeff:
No, no, there’s actually more, and these are unique bricks in the DCN firewall. It’s not just legal help where DCN can help clients in the transportation industry. For example, we can provide background checks and screening, simply offer more affordable benefit solutions, we can provide extensive administration assistance and services, including payroll processing. Remember, it’s best for you as a business to keep many of these types of services off your plate when relating to the IC’s that you’re contracting. Leaving these duties to DCN, you stay protected and supported while knowing that the DCN members or IC’s that you contract are still having access to incredible services.
Sara:
And what are some of those incredible services?
Jeff:
I guess just a few that DCN provides access to are fuel discount program, roadside assistance, cargo insurance, incredibly and possibly the most critical is how DCN ensures the safety of its members and clients. So, DCN offers accident claim management assistance, legal, tax, life, retirement programs, and more. Further, we offer occupational accident insurance at very competitive group rate so that you never have to go to work with any concerns for any project. For client businesses, DCN can provide workers comp policies even to master contractors that have their own workers, which traditionally has been a little bit more difficult to cover. If that wasn’t enough, DCN also offers contingent liability and through utilizing the worker’s comp policy, we can provide you, you can additionally save on auditing costs.
Sara:
Wow, well, that definitely seems like a lot, but where’s the catch here?
Jeff:
You know, it’s, it is, it is a lot. And, there is no catch. Members, for example, are under no obligation. The business model is completely voluntary for members to join. When they join they buy a $25 share stock to become part owner. This opens the door to the benefits we’ve mentioned above to the organization and the services we mentioned. The only monetary contribution that the members provide is by way of this initial stock purchase. And if you decide to leave DCN at any time, for any reason, the stock fee is purchased back at par value. For all that is available through DCN to become a member really is virtually risk-free.
Sara:
That’s interesting. So what I’m hearing you say is that essentially DCN has used the co-op model to see these problems and create solutions for clients. That is truly a unique solution, especially in an industry so varied and prone to those misclassification claims and problems. But as a client, DCN can keep you connected to your IC’s while also protecting your business from those legal issues.
Jeff:
Right. Right. The co-op model allows our clients to stay connected to the contractors, but clearly draws the line that separates them from being employees, because they’re not. DCN’s mission is to provide safety for its members and ensure subscribing clients steer clear from misclassification issues, benefits needs, and other potential employer implications. Above all DCN is the protective layer or firewall between the IC’s and the businesses that contract them.
Sara:
So, so far we’ve discussed how DCN’s models for success in the transportation industry for the client and the IC separately. But is there a uniting force at all, or does DCN keep the two sides completely separate here?
Jeff:
Hmm, that’s a great question. There is a uniting force. I suppose if you look at it, DCN can provide benefits to the member-owners that ultimately keep them happy and willing to be available so the businesses can continue to hire them. Since co-ops are member-owned, they are in the special position of knowing exactly what benefits they and their fellow IC’s need. This is ultimate of great service to our subscribing clients because they rely on the IC’s they contract to make their businesses work. Happy IC’s make for happy businesses, right? This happy, mutually beneficial relationship encourages a sense of loyalty. So both IC’s and businesses can develop long-term reliable partnerships.
Sara:
So essentially DCN serves as the buffer like you’re saying before and a bridge. They’re a firewall for the businesses and the ICS, but they’re also encouraging a long-term partnership down the road.
Jeff:
Yeah, yeah. Pun totally intended, right?
Sara:
Oh, absolutely.
Jeff:
Yeah. Yeah. Nice. Perfect. Well done. Listen, our members are the owners. Our IC’s are the owners. They receive their pay from DCN. They find benefits through us. Businesses can rest assured that any member they contract is well taken care of as part of the DCN co-op. They can also breathe easy knowing their legal concerns are taken care of. Should any legal issues arise DCN will always assume the role of the primary defender, and that’s the DCN difference. And that’s, you know, what our existing members and clients have benefited from for years.
Sara:
This is all great stuff Jeff, thank you so much. As we’ve discussed today, co-ops can be very useful in the transportation industry specifically, and as a co-op, DCN and its unique functions offer a protective firewall that supports both sides of the coin that we were talking about, the, the IC’s and the businesses that contract them. By working with co-ops within the transportation industry, DCN can unite people to achieve that needed success that we so need right now. And DCN has clearly seen great success within the co-op model, especially working with the clients in the IC’s all over the country.
Jeff:
We have, absolutely. It’s a wonderful thing to see the support in our member community, and the relief on our client-side as well. Hopefully, you understand the benefits of a co-op model in the transportation industry for both sides now. This has been really cool to explain this. Co-ops can bridge the two while keeping them separate. But DCN goes above and beyond to tackle matters of misclassification and address any legal activities, all while providing access to critical benefits to those in the transportation industry. Our goal is to help promote long-term and prosperous relationships. If you want to know more about the success we’ve seen at DCN, or if you’re interested in joining the network, please make sure to fill out the form at the end of this webinar.
Sara:
Thank you so much for joining us today. Thank you so much to you too Jeff. Make sure to fill out the form if you’d like more practical information about DCN successes or even joining our network. All right. I’ll talk with you soon. Hopefully. Thank you so much, Jeff.
Jeff:
Thanks, Sarah.
