The city of L.A.’s plan to create franchised zones for commercial trash hauling promises to dramatically scramble a long-established market, creating winners and losers.
The City Council earlier this month approved a plan to create the 11 waste-hauling franchise zones, with each served by one exclusive operator. The plan, which will take effect in 2017, covers trash collected from 75,000 commercial and multifamily sites. The first round of bidding will begin later this year.
One view is that many of the 45 haulers now doing business will find work in the 11 zones, possibly by forming groups or subcontracting. But another view is that only a few haulers will get the work, leaving dozens of losers. Some might go out of business.
In the optimist camp is Phillip Kotanjian, manager of AAA Rubbish Inc. in Bell Gardens. “We’re excited for the opportunity to bid,” Kotanjian said. “If we get a franchise, we can use that to bid on an even larger franchise the next time around.”
But pessimists include Mark Blackburn, president of Universal Waste Systems in Santa Fe Springs. Blackburn, who also chairs the board of Los Angeles County Disposal Association, a coalition of local waste haulers, believes many businesses will disappear as a result of the new franchise system.
Blackburn expects the current “big four” players – Waste Management Inc. of Houston, Republic Services Inc. of Phoenix, Athens Disposal Services in City of Industry and Crown Disposal Co. Inc. of Sun Valley – to win bids to operate several franchise zones.
Read the rest of the story in the April 14 weekly edition of the Business Journal.