Is a PAYT (Pay As You Throw) program in your future?

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A Pay As You Throw (PAYT) program has been a topic that has come and gone and come back in the world of residential waste service.  The system is fairly simple, where a customer purchases bags at a per bag price from their hauler, or has a choice of cart size varying in price based on the cart size.  The idea is that your waste disposal cost is relative to the amount of waste you need to be disposed of.

In my history, we used this type of system to cater to senior citizens who did not generate high volumes of trash.  This was also a popular program in rural areas where residents are more likely to burn their trash.  Later, as recycling became popular, PAYT became an incentive to divert materials from more expensive disposal into “cheaper” recycling.  Unfortunately in most areas, those economics don’t work any longer, unless there is some subsidy or other market influencer making recycling cheaper.

When we’ve done the PAYT by-the-bag program, we called them Budget Bags.  We first used bags, then switched to tags (Budget Tags) so we could eliminate the inventory problem and be able to mail tags to customers. We charged $3.50 per tag in sets of 10, plus a $3.50 mailing fee. We sent them guaranteed delivery so people could not claim they did not receive them. We only provided this service if we were already passing your house.

While this list is not exhaustive, here are some props and cons to having a PAYT system:

PROS:
• Nice market niche. Provided a nice “PAYT” (Pay As You Throw”) alternative, which got us points with local government, helped encourage recycling and a way to differentiate from our competitors.
• Popular with senior citizens.
• Little investment.
• Worked well with serious recyclers.
• Cash up front.

CONS:
• Required hand loading. We were working on modifying this service on routes we were converting to ASL.
• Some customers abused the weight limit.
• Unless you charged a “route fee”, it did not cover your fixed costs. This is why we only provide this service to customers we were passing already. We considered it “gravy”.
• Customers were willing to pay more for this service, and not have a cart.

 

Have questions about PAYT?  Feel free to contact me, I’d be happy to help!

A city finds out the waste business isn’t as easy as it looks.

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Copy and paste this link to read about one city’s venture into hauling their own trash.

 

https://www.standard.net/news/government/north-ogden-halts-in-house-garbage-collection-renews-deal-with-trash-hauler/article_c8fcf89b-d59f-5d3f-bba7-57241e8aac0f.html?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-07-16%20Waste%20Dive%20Newsletter%20%5Bissue:28544%5D&utm_term=Waste%20Dive

The do’s and don’ts of a new waste hauling business, Part Two

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Here’s Part two of The do’s and don’ts of a new waste hauling business.

 

  1. Get involved in local politics. Meet and get to know those elected officials who have solid waste responsibility in your city, township or county.

 

  1. Be a partner with the staff at your city, township, county and state government, become their “go to” for waste and recycling questions.  Your perspective will be respected as a local business, as opposed to a corporate spokesperson.

 

  1. Get to know the local press, but be careful.  Keep your quotable comments abstract, don’t tell them everything you know.  Make no promises.  Be realistically positive.  Become the waste professional they can go to for objective comments

 

  1. Join your state or regional trade association. Seek opportunity to have a leadership position.

 

  1. Get to know your competitors. Someday, you will need each other.

 

  1. Know your business by knowing your numbers. Identify at least three “Key Performance Indicators” that you can follow religiously.

 

  1. Business is built on the street, not in the office.

 

  1. Be a leader first, a manager second.

The do’s and don’ts of a new waste hauling business

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Good morning!  Starting a waste business, is an exciting time.  Talking to people who have done this before, here are some of the things they would or wouldn’t do or may do differently.  Part one is here, part two will be posted later.  If you have something to share, add it in the comments below.

 

  1. Promote a safety culture.  Hi-visibility clothing, hard hats, cameras, proper footwear, driving conduct, etc.

 

  1. Buy a better truck than you think you can afford. It will pay off in the long run.

 

  1. Protect and promote your brand. Consistency in color, graphics, design.  Buy carts and containers of the same color.

 

  1. Be consistent with your service. Same time, week after week.

 

  1. Don’t buy a $60,000.00 pickup truck to plow the lot.

 

  1. Over service your trucks. Money spent in preventive or predictive maintenance is a wise investment.

 

  1. When hiring team members, value attitude over experience. You can teach skills, you can’t change character.

 

  1. Have a good relationship with a local bank. Take the time to teach them the business.

 

  1. Have a good relationship with a large bank or finance company, just in case your growth outpaces your local bank’s ability to lend.