I've been meaning for some time to chime in on this thread to describe a
neighborhood experiment some time ago and some of the lessons we learned
from it.
Concerned about all of the negative externalities others have noted--noise
pollution, fuel consumption, wear and tear on alleys, higher-than-necessary
prices to customers--several of us in St. Paul's Tangletown neighborhood
(Grid 5 in District 14, just west of Macalester College) organized a
neighborhood meeting in the mid-1980s to discuss the possibility of
consolidating trash collection. We were concerned about the true costs of
the totally individual system. Many of those costs were being externalized
so did not show up in bills to customers, but they were no less real.
The well-attended meeting revealed considerable support for as much
consolidation as possible. A steering committee was directed to solicit
bids from all licensed bidders in the city. Several consensus criteria were
identified. We wanted weekly collection. We would prefer a hauler willing
to offer a recycling discount to those who would keep cans, bottles, or
newspapers out of their trash (this was in the days when the recycling
habit was not yet as ingrained as it is today). And other things being
equal, we would prefer a local mom-and-pop operation. Participation by
individual households would be entirely voluntary, but we were hoping to
get a discounted rate in exchange for delivering a substantial proportion
of the potential customers in the neighborhood.
After the bidding deadline had passed, the committee screened the bids for
price and our other criteria and brought the two most promising bidders to
a second neighborhood meeting. Both bids were substantially below the going
rate for individual customers, and both did include an additional discount
for those household that chose to recycle. The haulers left following their
presentations, and after considerable discussion the meeting voted by a
strong margin in favor of the second-lowest bidder because he was St.
Paul-based (the lowest bidder was suburban), had more experience, and was
African American.
Then a long process began of developing materials, recruiting block
captains, and going door to door to persuade neighbors to switch to the
selected hauler. I don't recall the exact figure, but I think ultimately
about 70% of the neighborhood chose to do so. Most of the remainder cited
loyalty to their existing hauler as their reason for not joining the effort.
PLUSES
The results were positive in several respects: the high participation rate,
the favorable price, the good service, and the recycling discount.
We had hoped the experiment might prove a useful model for other
neighborhoods. Indeed, the Citizens League became very interested because
the conventional models seemed to have to choose between two
inefficiencies: either those inherent in monopolies, whether in the hands
of a municipal government or of a private party contracted by that
government; or those inherent in totally fragmented pickup routes. The
Tangletown model showed some promise of combining the efficiencies of
competition with those of route consolidation, and it offered the
additional attraction of appealing to many conservatives and liberals
alike.
MINUSES
Despite these positive outcomes, the effort and its subsequent history
revealed several pitfalls.
In the first place, it was very labor-intensive to organize. We had to
leaflet the entire neighborhood three times: first for the initial meeting;
then for the follow-up meeting to decide among the bidding haulers; and
finally to explain again the project, describe the meeting outcome, invite
participation; and provide an easy form for switching haulers effective
January 1. The block captains then had to spend countless additional hours
following up with individual households that had not initially responded
one way or the other. The amount of volunteer time required to organize and
implement the project seemed to us an immense obstacle for other
neighborhoods that might be interested in a similar trial.
Second, and really another aspect of the first point, we ran out of steam
after the project was up and running. Unforttunately, for long-term success
we would have needed to put in still more work to maintain participation
rates as the neighborhood population turned over. In the absence of an
ongoing system for contacting every new family that moved in, we
experienced gradual attrition in participation rates.
Third, we had not thought to set up no system for handling hauler turnover.
When our original hauler died suddenly, his family sold to another local
hauler. A few years later that hauler in turn sold out to Waste Management.
Thus, contrary to the strong desires of the neighbors at the original
meeting, in the long run we had inadvertently helped to consolidate
customers for a large, non-local corporate operation.
THINKING ABOUT A CITYWIDE APPROACH
I think the model we developed holds some promise for St. Paul, although it
would need to be tweaked in important ways.
Scale is a crucial issue, and it is closely intertwined with questions of
competition and route efficiency are all intertwined. At one extreme is the
present system in which each household is a separate contracting unit. This
maximizes competition and presumably forces certain kinds of efficiencies
as a result, but it leads to inevitable inefficiencies of a different type.
It raises the hauler's labor and vehicle operating costs by raising the
miles-to-customers ratio. (Think of what our electrical service would be
like if Xcel Energy had twenty or thirty competitors, each of them needing
to install miles of redundant wires to reach widely dispersed customers.)
It also adds costs that the hauler is able to externalize but that we all
pay for indirectly: noise, air pollution, wear and tear on alleys and
streets, depletion of nonrenewable petroleum resources, global warming, etc.
At the other extreme would be a citywide system, whether run by the city
itself or contracted by it to a private hauler. This might maximize route
efficiencies and minimize some of the external costs, but it would likely
yield the sorts of inefficiencies often associated with monopolies.
Somewhere between these two extremes might be a scale that combines the
efficiencies of a competitive system with those of consolidated routes,
whether by districts, by subdistricts, or by individual blocks. Within St.
Paul, the easiest scale might be that of the district. Each district
council could presumably coordinate the bidding and selection process for
its area. There are only 17 districts, however. Having such a small number
of contracting units could have the undesirable effect, mentioned by
several contributors to this thread, of driving some haulers out of
business.
Going to smaller contracting units might help protect haulers and increase
competition, but it would also be operationally more complicated. For one
thing, the internal political geography of the districts varies greatly.
For example, District 14 (Mac Groveland) where I live, elects district
council representatives out of 17 smaller units that it calls grids,
whereas it appears from a quick perusal of some other district websites
that many have far smaller numbers of subdistricts or even do not subdivide
themselves geographically at all.
The smallest scale above that of the individual household might be the
block. I understand that a handful of the individual blocks in St. Paul
have already consolidated haulers. That has the advantage of reducing the
scale to a point where many or most of the participants already know each
other. It also makes the organizing workload more nearly manageable.
However, it would require a tremendous number of bid processes (and might
consequently create inordinate drains on haulers' time). Moreover, the
block scale seems too small to generate all the desired route efficiencies.
Regardless of the scale of the contracting units, the city and the district
councils would have to work together to make a bidding system work. The
city would have to restrict hauling within each geographical area to the
hauler it has selected. It might also develop organizing kits to ease the
work of whatever unit is soliciting the bids and selecting a hauler. The
councils would have to take the lead on implementation within their areas,
including publicity, a schedule of bids and meetings, and administrative
infrastructure. Contracts could be for several years. A staggered schedule
for bidding would reduce the amount of market instability for haulers.
Whatever the scale, it would also seem advisable to give the contracting
units some discretion concerning criteria (for example, Tangletown's
preference in the '80s for small, local operations and its desire to
encourage recycling). There should also be a predetermined procedure for
handling cases where a hauler sells out or closes down.
It is an open question whether decision-making and administrative processes
for any such intermediate-scale system could be streamlined enough to make
it feasible. Does anyone on this list know whether a city task force has
ever grappled with the question? Are there successful examples elsewhere in
the country?