If L.A.’s new trash hauling system is more efficient, why does it cost so much more?
After all, a more efficient system is supposed to lower prices. Instead, now that the new trash pickup system has gone into effect, businesses and owners of multifamily complexes throughout the Los Angeles portion of the San Fernando Valley are seeing big pops in their bills – as in two or three or even four times what they used to pay. For example, a $450 monthly expense now is $1,100, according to one unhappy business owner. (See “Trash Talk Heads to Courthouse” on page 1 of this issue.)
When the new trash pickup system was approved by the City Council three and a half years ago, it was more or less sold on the notion that it would be more efficient. Under the old system, more than 100 trash companies made individual deals with businesses, regardless of their location. Under the new system, seven trash companies got franchise territories from the city. That way, each truck could make all its pickups in one neighborhood rather than run all over town. (The new system affects commercial establishments and larger multifamily complexes, not single-family homes.)
On the surface, that seems logical. One underlying argument was that this new efficiency would reduce costs or at least tether them from rising quickly. (Businesses, however, predicted the new system would result in higher costs. One chamber exec at the time warned that prices could increase 40 percent. He was only off by one zero.)
So why are costs exploding? Because the city has created seven monopolies. The seven trash companies can pretty much charge what they want.
Go ahead, try complaining. There are already reports that the trash companies are unresponsive. Big surprise, no? I mean, name a monopolist that’s sensitive to customer complaints. The cable company maybe? Besides, why should a monopolist bother with you? His real customer is the city.
So who are the big winners in the new system?
Certainly the city councilmembers. With the franchise system, trash companies must schmooze them and do what they want if the haulers want to get or keep their valuable franchise. And the city itself is a big winner since franchise fees will be a new cash source.
The seven trash companies are winners. They have new monopolies and, as noted, can charge much more and all but ignore those persnickety businesses that complain every little time their fetid trash goes uncollected for a few weeks.