A Franchise System Proposed for Commercial Waste Hauling is a Solution in Search of a Problem
By Gregory Bianco
New York City’s commercial garbage business has undergone a renaissance ever since then-Manhattan District Attorney Robert Morgenthau and then-Mayor Rudy Giuliani broke up the old mob cartel and helped to create an efficient, competitive industry under the aegis of the city’s Business Integrity Commission. According to every independent analysis, wages have risen in this sector even as they have remained stagnant elsewhere, and the carters—after having invested tens of millions of dollars in new trucks and infrastructure—enjoy the vocal support of most of New York’s hard-to-please small business community.
Despite this 20-year record of success, environmental advocates have proposed to totally transform commercial waste collection by instituting a franchise system that would eliminate competition by creating exclusive zones where the carter would be designated by the city through a bidding process. If this were to become law, scores of local carting companies would lose their investments and thousands of their mostly minority workers would lose their jobs.
The irony is that the carters and the activists agree on the plan’s environmental and economic-equity goals. Where we diverge is over methods—and the extent to which the existing businesses are falling short in these areas.
The advocates stress that because our industry is so robustly competitive, there are too many polluting trucks, disproportionately harming communities of color. They argue that franchising will clean the air by reducing the number of trucks.
This is a red herring.
In 2013 the city passed a law requiring the city’s 1,500 commercial garbage trucks to meet federal emissions standards by 2020. The new trucks, which carters have already begun purchasing for $300,000 apiece, burn much cleaner. So much for the pollution argument. Department of Environmental Protection Commissioner Emily Lloyd underscored this point in her remarks made after the passage of Local Law 145; and ironically, this pollution reducing law had the support of some of the very same advocates who are now saying that we desperately need franchising to clean the air.
The advocates also are on thin ice with their allegation that small businesses in the city support their proposed change in garbage collection. As a 2012 Department of Sanitation study pointed out, “Surprisingly, few generators expressed dissatisfaction with commercial recycling in New York City.” In addition, also confounding the critics, the study underscored the efficiency of the private carting sector.
A franchise system for commercial waste collection in New York City, as Business Integrity Commission Chairman Dan Brownell has pointed out, would—through increased regulation and mandates—raise the cost of garbage removal for the city’s hundreds of thousands of businesses. Many are coping with skyrocketing commercial rents and thin operating margins, and struggling to stay open.
Brownell also rightly points out that franchising would mean the loss of scores of smaller carters and the thousands of mostly minority workers they employ. According to a recent report issued by the Citizens Budget Commission, the average salary for these workers is more than $60,000 per year. Our own internal survey determined that more than 80% of our work force is either African-American, Hispanic or Asian, and come directly out of the city’s lower-income neighborhoods.
There is, however, something important missing from all of the public-interest noise promoting franchising: This is a special-interest campaign heavily subsidized by Teamsters Local 813, a union with a checkered past that is struggling to remain viable while grappling with a pension fund on the brink of bankruptcy.
Overlooked is the fact that more than 90% of the workers in our industry are already represented by other unions that protect the rights of their members and who oppose the Teamsters’ special-interest pleading for a franchise system that would favor the large national companies where that union has strength.
Put simply, franchising will aggrandize the interests of multibillion-dollar national firms—and the tainted local union that is cheering for them—at great expense to the public interest. If there are problems in the current commercial garbage sector, the city has a strong regulatory and enforcement structure to address them. Carving the city up into territorial monopolies will only stifle competition, raise rates and create a system unresponsive to the needs of neighborhood businesses.
Gregory Bianco is the president and CEO of Metropolitan Recycling and a board member of New Yorkers for Responsible Waste Management, a group of local carters formed to stop the franchising proposal.
Article cited from: http://www.crainsnewyork.com/article/20160302/OPINION/160229932