Most people don’t really think about their trash, and that’s exactly how they want it. Out of sight, out of mind. Let someone else worry about it. For residential properties, that someone is the Department of Sanitation (DSNY). For commercial properties, there are numerous private carters to chose from to handle waste collection, regulated by the Business Integrity Commission (BIC). However, the City is looking to completely revamp this system and as such will eliminate choice, competition, and increase costs to merchants and consumers.
A brief overview of the system’s current operations:
- There are 90 licensed haulers
- 70-75 are active
- 12,000 tons of trash are collected daily
- 700 trucks are needed to collect the trash
- 19-20 companies manage 80%-85% of collections
- The companies operate efficiently with high levels of customer satisfaction
- In 2016 BIC increased insurance requirements
- BIC mandated that all trucks must have clean engines by 2019
- One national/public company. Two regional/investor-owned companies. The rest are multi-generational private companies.
- Private carters DO NOT own disposal facilities
- The industry employs 4,000 people. Many are second-chance or immigrants. 2/3rds are union workers.
- Hourly wage is $20+. Yearly salary is between $60K & $100K
Source-“Private Carting Study: Economic Assessment”, August 2016
It must also be pointed out that commercial sanitation is one of the most regulated industries in the City. BIC’s current reporting regulations include the following performances, operating, and reporting requirements (major highlights):
- Customer register– a quarterly report that requires 96 pieces of data on each/every customer
- Financial statement– very detailed; due annually
- Fleet information– beyond basic registration, detailed information regarding vehicles required on a real-time basis to monitor compliance with Local Law 145 (2013)
- Employees– the BIC must be advised of all new employees and principals of our companies (some companies provide this weekly)
- Nine specific journals and ledgers– designed at a time when most businesses did not use computers
- Route data– Earlier this year BIC requested very detailed route data over the course of one week; older data – from 2014 – was flawed and incomplete, but still served as basis for the initial decision to pursue a zone-franchise system
- Window decals– provide every customer with a BIC-approved decal identifying collection services and times; replace as necessary
- Commercial recycling– provide comprehensive recycling services to all customers
- Organics recycling– provide specialized organics diversion services to over 2,000 customers
(The above do not include additional requirements from DSNY, or those related to the operation of waste processing and transfer facilities. Source- City’s “Private Carting Study: Economic Assessment”, August 2016).
As of August 2018, the maximum rates allowed to be charged by private carters are:
- $20.76 per cubic yard of loose refuse (volume)
- $13.62 per 100 pounds of refuse (weight)
Despite these high levels of regulation, the City thinks that micromanagement will somehow lead to improvements. They plan on dividing New York into 20 commercial waste zones. Carters will bid to serve these zones, with 3-5 winning the bid. The reason for 3-5 carters servicing each zone comes on the heels of the debacle that is the Commercial waste Zone system in Los Angeles. In LA, each zone had only one carter which increased costs, decreased service, and became such a disaster that the speaker of the LA City Council said it was one of his greatest regrets in public service. Seeing what a mess LA is, San Diego rejected a commercial waste zone proposal. By allowing for 3-5 carters, the City of New York maintains that they are allowing some semblance of choice, but this competition is so drastically reduced, and the requirements are so onerous that there are only going to be a few companies able to compete at this level. Many of the mom and pop operations that remain will either be driven out or forced to work as subcontractors for the larger firms. So yes, “choice” exists by the textbook definition, but not in a real-world setting.
At first, advocates who pushed for the Waste Zone Plan said that it would reduce truck traffic. This was debunked in the August 2016 study, and was always a junk argument considering the volume of trash would remain the same and the carters do not own their disposal facilities. So, the same amount of trash would need to be driven to the same facilities, only now with increased costs to the merchants and at the cost of destroying thousands of long-standing relationships between merchants and carters. Relationships which, by and large work very well. Now, the advocates are claiming that the Waste Zone Plan will enhance safety. It is true that a bad actor or tragedy will cast a negative light on the entire industry. Companies that do not take safety seriously will struggle in the long run, but the industry is enhancing safety in various ways. Trucks include sideguards and cameras. The cameras have greatly improved training, and crash avoidance sensors are progressing (though not currently in effect). Also, much of the “safety” data is faulty. Violations that have nothing to do with safety are lumped together with those that do.
If the City thinks changes to the commercial waste industry are needed, then they should have sat down with all stakeholders and discussed various options. The Waste Zone Plan happened behind closed doors and did not involve the merchants who will be affected. Adding insult to injury is the idea that by creating a duopoly or triopoly, somehow costs, service, and safety will improve. Even The New York Daily News Editorial Board, no friend to commercial sanitation, came out against this plan. New York needs to avoid disaster and scrap this idea before it’s too late.