Los Angeles Business Journal

L.A. Council Passes Trash Franchise Program

By Howard Fine Originally published April 1, 2014 at 3:05 p.m., updated April 1, 2014 at 4:30 p.m.

The Los Angeles City Council on Tuesday approved a controversial program to turn commercial trash hauling in the city into an exclusive franchise system.

The council’s 12-1 vote, with Councilman Bernard Parks opposing, scraps the current open competition system for trash collection from 63,000 commercial and multifamily properties. Instead, it establishes 11 exclusive franchise zones. Starting in 2017, trash companies would bid for the right to become the exclusive hauler in each zone.

Environmental and labor groups who put forward the plan say it would cut down on the number of trash truck trips, reducing congestion and emissions, as well as create a more systematic approach to recycling. They also say it would raise workplace standards for hundreds of trash collectors and drivers. The ordinance requires all the workers to be paid the city’s living wage.

“We are celebrating history in the making today with City Council’s near unanimous vote to approve the franchise system,” said Maria Elena Durazo, Secretary-Treasurer of the Los Angeles County Federation of Labor. “These hard-working men and women provide a vital service to our residents and businesses, and deserve safe jobs with fair compensation – higher standards that our new system will be putting into place.”

Business groups opposed the plan, saying it would reduce competition, increase prices and force dozens of local trash haulers out of business. They also believe it’s a ploy by local unions to weed out haulers to make it easier to unionize workers in the $250 million local industry.

“An exclusive franchise system will create a costly bureaucracy, raise trash collection rates as much as 40 percent, potentially shut down 140 small family owned businesses, and eliminate thousands of high paying jobs,” Gary Toebben, chief executive of the L.A. Area Chamber of Commerce, said in a statement following the vote.

L.A. Mayor Eric Garcetti issued a statement indicating he will sign the program into law.

“I’m proud to have been an early leader in the campaign to make Los Angeles the zero-waste capital of the nation,” Garcetti said in the statement. “This is one of the most ambitious programs of its kind in the world and will provide clean air, good jobs, and recycling for all.”

Previous Coverage:

Dumped: L.A. Franchise Zone Plan Could Scrap Trash Haulers