That this guy recognizes he cannot afford to buy a vehicle should be a sign that he is responsible and has good judgment, valued traits in an employee. Too many people have the mindset that if they can borrow the money to buy something, they should do it. for the instant gratification With what you say about him, I'd make an effort to keep him.
I like Blade Runners's idea if you can afford to buy a second truck to grow the business. While buying a beater has appeal, to have a truck that can be used on the job (which means its appearance needs to reflect positively on your business) could make you money. It sounds as if this guy may be a candidate to be a crew leader for you.
Consider trying to get new customers in your employee's neighborhood so some days your work could start or end near his home so the non-productive 20 minutes is only one way rather than round trip.