It’s hard to think of many sectors other than transport that are so reliant and built upon a band of dedicated contractors that form the basis of the workforce, writes Transcon’s Blake Noble.

If ever there were a public barometer for just how tough the going is out there right now, then the recent release of the full-year results for NZX-listed MOVe Logistics shone a pretty bright light on it. No one wishes for any business to make losses in the tens of millions, but that was the stark reality for MOVe shareholders and investors in the year to June 2024.

Sitting within the organisation aren’t just the shareholders and employees – the latter of whom I‘m sure will be working tirelessly to get the organisation back onto firmer footing – but a raft of owner-drivers and subcontractors, their own livelihoods derived from the fortune of the parent company to whom they contract their capacity and services.

It’s hard to think of many sectors other than transport that are so reliant and built upon a band of dedicated contractors that form the basis of the workforce, and who take on immense risk as big as purchasing a dedicated asset or assets in the hundreds of thousands of dollars, to be a part of it. The subcontractors and owner-drivers place a huge amount of trust and faith into the company with which they’re aligning.

The success of the parent company is dependent on the ability of the owner-drivers and contractors to operate in the most efficient manner and provide an offering of (hopefully) greater efficiency than the company might be able to do so itself. Reciprocally, the owner-driver is reliant on the drive of the parent company to provide adequate workload and earning ability to make their business viable; the owner-driver does not have alternative sources of revenue in the way that the parent company may do – they have to succeed from this relationship.

Within the courier space in particular, and across all of the large nationwide brands, there are myriad examples of some large owner-driver/contractor companies that have formed within the shadows of the parent companies, leaving them to get on with what they’re best at, and conversely allowing the subcontractors to play to their strengths. This is surely the absolute definition of the symbiotic relationship on which the concept was originally focused around and should provide the benchmark for such arrangements.

A recent – and ongoing – court case taken against Uber in New Zealand has shone a different light on the legal scenario that may be applicable to such owner-drivers and subcontractors and looks to have the potential to alter the landscape for good if the initial decision is upheld. At stake is whether subcontractors, working on a relatively permanent basis, are entitled to the same employment conditions as a conventional employee of the parent company. This may sound like a relatively simple equation, but what it has the potential to do is threaten the economic viability and attractiveness of such arrangements when additional costs are applied. I’m not going to get into an argument about the virtues of such arrangements either way, other than to say that both parties go into such arrangements of their own free will. One thing’s for sure, you can guarantee that plenty of energy is being applied from both sides to maintain/ challenge this ruling, and we’ll watch with bated breath as to the precedent that emerges from it.

In an environment that’s already bringing more than its fair share of challenges, adding costs to this relationship could well force a major reassessment as to the viability of such a structure and place greater weighting back on the favour of internally resourcing such capacity. Equally, one hopes that a degree of pragmatism will prevail should the tables need to turn somewhat, and the big guys hold onto the memory that it may have been the little guys who got them to where they are.