Most businesses in Los Angeles will be experiencing an increase in their waste collection costs associated with the City’s “Zero-Waste LA Franchise System”. Waste Control, Inc. estimates that the average customer will experience a 94% increase in their waste collection costs. Many people are asking “why?”. Here are some of the reasons.
For a number of years now, rates charged by waste haulers in Los Angeles have been going down. One of the main reasons for this was the anticipation of the City’s bid process to move from an open market situation to a franchise market. The City of LA took into consideration the market share of the proposing haulers in determining who would be awarded collection zones. With that in mind, haulers were competing for market share by lowering rates to attract as many new customers as possible. This caused a price war where the customers benefited by having very low rates for waste collection. Although the new rates under the franchise agreement will cause significant increases to customers, the new rates are justifiable considering the increased services provided.
The City of Los Angeles has adopted an aggressive goal of achieving a 90% recycling rate by the year 2025. This is an admirable goal but is not achievable without a dramatic increase in the amount of recycling done by businesses and multi-family residences in the City. The cost of waste collection includes recycling at no additional cost. So, when a customer compares the cost of their waste collection services to the new rates, the recycling component is often not taken into consideration. This pricing structure provides an economic incentive for customers to increase the amount of recycling they do.
There are a number of requirements that the City has placed on the haulers that also affect the costs. The haulers are required to use alternative fuel collection vehicles which will help to reduce the amount of air pollution in Southern California by removing the diesel engine trucks used by many haulers today. Also, by assigning only one hauler to each zone, truck traffic will be reduced by more efficient routing. As you can imagine, it is very costly to replace a company’s complete fleet of vehicles with newer, cleaner vehicles.
In response to the City’s survey of businesses in the City they found that many were dissatisfied with the level of service they were receiving from their waste services providers. As a result, the City has put a number of elements into the program that will increase customer satisfaction and produce more hauler accountability. These elements include 24 hour Customer Service, a web-based customer interface, GPS tracking of all collection vehicles, all of which add to the cost of services.
Waste Control is intimately familiar with the City’s contract with the haulers and has significant experience in developing systems for customers to reduce costs, even in a franchise environment where rates are set through City regulations. We offer a free – no obligation review of your services that lay out the savings that Waste Control can help you achieve while improving your sustainability.
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Click here for more information from the City of LA’s Zero Waste website.