Solid waste and recycling businesses are, for better or worse, connected at the hip with cities, counties and special districts. Every step of the waste stream from hauling, to disposal, to processing, to landfills, is typically defined by local ordinance. In business terms, each local government defines nearly every aspect of the solid waste and recycling market within its boundaries. Let me say that again, each local government defines nearly every aspect of the solid waste and recycling market within its boundaries.
Other industries, particularly privately owned utilities, are similar to the solid waste industry in that they commonly operate only pursuant to local government permission, or franchises. However, utilities tend to have very large infrastructure investments, for example buried or overhead cables, which are extremely costly or impractical for competitors to replicate. There are very significant regulatory and cost-based barriers to significant changes in most utility markets.
The same is not the case for solid waste and recycling markets. While the costs of providing solid waste and recycling services can be high, the equipment is more mobile and changing providers does not require a city to dig up streets or condemn existing facilities. As a result, local governments do, fairly commonly, make significant adjustments in who provides waste and recycling services within their boundaries.
What’s more, with the rising popularity of various methods to increase solid waste diversion, including food waste pickup, zero waste goals, and waste to energy projects, citizens in some jurisdictions are asking city councilors and county commissioners for policy changes. When enough citizens ask for something, politicians tend to oblige them. You can read more on politics in solid waste in the blog post, “Big Differences in Solid Waste Policies Reflect Red/Blue Divide.”
What we have then, is a solid waste marketplace that is defined by local government contracts and regulations; local governments can and do commonly change these contracts or regulations in a manner that dramatically impacts private companies; and, citizens in many parts of the country are more engaged than ever with policies related to solid waste.
Given this landscape, one would expect that solid waste and recycling companies would make local government relations – identifying and acting upon threats and opportunities presented by local government – one of the, if not the, top priority. In my experience, however, that is not the case. Practices differ between companies, of course, but generally the solid waste and recycling industry drastically undervalues and underinvests in how it relates to local government. Companies that fail to prioritize local government relations are leaving profit on the table and risking dramatic business set-backs.
What makes me think the solid waste and recycling industry undervalues local government? Well, I served as mayor of a mid-sized city in Oregon, and my company, Waste Alert has reviewed over 6,000 city council, county commission and special district board agendas and minutes to identify solid waste and recycling issues for our clients. These experiences tell me that solid waste and recycling companies tend to identify local government problems late, if at all, and can be forced into a defensive position as a result. Moreover, opportunities to grow market share are left hanging, all because the industry does not choose to pay sufficient attention to local government.
I believe this is one of the biggest mistakes solid waste and recycling companies can make and many if not most ARE making. Because this is such a major issue for the industry, I’ll be writing some additional posts on this topic to explore why the industry underinvests in local government and what are some of the solutions to help growth-oriented companies leverage an effective local government strategy to grow the bottom line and better serve their customers. Stay tuned.
Jeff Eager is the Founder and CEO of Waste Alert, which provides weekly email updates on local government activity to solid waste and recycling companies. He is a practicing attorney specializing in solid waste franchise issues for private waste companies, and is the former mayor of Bend, Oregon.