Trash This Dirty Deal

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In my entire childhood, I flew on an airplane exactly one time. And when I did, I was briefly the envy of my sixth-grade class; many of my schoolmates had never boarded a plane. Back then, flights were expensive, rare and dear.

Years later, however, flights were so cheap that for a three-year span, I had a job in one city, a home in another and I flew between them each week. And I was surprised that I kept seeing the same three or four passengers on my regular flight; it turned out they also were airplane commuters.

The reason ticket prices tumbled so far? Airline deregulation.

It’s hard to believe today, but before deregulation in 1978, bureaucrats determined where airlines would fly, how many flights they could make and how much they could charge. The result was the system I knew in my childhood; one so bad that middle-class folks could rarely fly.

Has deregulation created a messy marketplace in the last 30-some years? You bet. Airlines change flight schedules more often than Republicans change front-runners, and it’s difficult to recall which airline is in bankruptcy this month.

But those are problems for the airlines to figure out. And we should let them do it. For we consumers, deregulation has given us command of the market. We have a bounty of flights to choose from. At dramatically lower prices.

I’m bringing this up because now in the city of Los Angeles, there’s a serious effort to go in the opposite direction, at least with trash haulers. The city may create a franchise arrangement, which essentially would create a regulated system out of a deregulated one.

Now, about 60 trash companies are free to contract with individual apartment complex owners, commercial building operators and the like. (Residential trash hauling is done by the city.) But under the franchise system, 11 districts would be created and one hauler would be responsible for each district. (For more, see the article on page 1 of this issue.)

This would be a system in which bureaucrats would determine which trash companies would serve what areas. The city government would gain command of the market. We customers would lose ours.

Don’t think so? Well, remember that a franchise system is what we have with cable television providers. Let me ask: Do you have command of the cable market? Can you shop around for lower prices and better channel packages?

Proponents of the franchise system argue that the current arrangement is a “wild west” in which different trash haulers drive all around various parts of the city to serve their individual customers. It’s a free-for-all, one said in the article. You never know who’s going to pick up trash in any given area.

Well, that’s for the trash companies to figure out. Let them do it.

The real motive here, of course, is to help labor unions. By creating 11 big zones, the city would create 11 big companies – big companies that would be prime targets for union organizing efforts. No surprise that labor unions and a union-affiliated group are pushing this plan.

And the city government would benefit. The city would wring greater fees out of the franchisees. What’s more, City Council members would get lobbied by the franchise holders and the wannabe franchise holders.

We customers would lose our market rights. Prices will go up. Competition will go down. Trash haulers will become about as responsive as cable companies.

We’d be going backwards. To a bad, unresponsive, expensive system, like that of the airlines in my childhood.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].

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