Crony Capitalism

L.A.'s New Trash Cartels Are Exactly the Dumpster Fire Critics Warned About

Exclusive city-mandated monopolies lead to sky-high prices and crappy service. Who could have predicted it?


Dumpster fire
Baloncici /

Last year Los Angeles City Council gave a handful of companies control of trash and recycling pick-up for all businesses and apartment buildings in the massive metropolis. Now these same council members are acting shocked that eliminating market competition has led to price-gouging and poor customer service.

The City of Los Angeles has a citywide dumpster fire on its hands. In just the first six months of the new system, the city has received close to 30,000 service complaints. Some customers' trash bills have doubled or tripled. Citizens have launched a signature-gathering campaign to try to force a citywide vote to kill parts of the program.

This program, called RecycLA, was sold to city leaders as a way to shift more trash to recycling and away from landfills to achieve a 90 percent diversion rate by 2025.

What the program actually did, though, is deliberately eliminate all competition for trash hauling. The program divides the city into 11 massive districts. Every commercial or apartment building in a district is served by a single trash hauler, and some of these haulers control multiple districts. The landlords and residents have no choice: If they want their trash picked up, they must do business with whoever gets the city contract.

To land these contracts, the trash companies must meet a whole host of demands, including new natural-gas-powered trucks, city-determined "living wages" for employees, and labor peace agreements with local unions. The city also gets millions of dollars in franchise fees. All of this was clearly, obviously going to drive up the price of trash hauling in Los Angeles.

Now City Council members are just aghast that a cartel crafted to make environmentalists and union leaders happy ended up putting the screws to citizens. The Los Angeles Times notes that they seem rather surprised at how things have turned out:

Councilman Mitch O'Farrell, who represents neighborhoods from Echo Park to Hollywood, said he had received assurances that RecycLA would improve the "customer experience" for landlords, business owners and condominium complexes.

"I feel I was sold a bill of goods," he said before Tuesday's meeting.

There is an entire field of study, called "economics," that could have shown O'Farrell that this was going to happen. The city deliberately reduced the supply of trash companies, but the demand for their services did not change. This allowed companies both to jack up prices and to provide lackluster services without having to worry about the customers turning to competitors.

Reason's Los Angeles office is among the many places struggling with their new trash companies. It charges an extra fee to haul our trash because we keep our dumpster locked up. (Our previous hauler had no problems getting access.) We've had to call and complain about missed pick-ups. We even had to send the company pictures of our dumpster to prove no one had picked up our trash.

Los Angeles city leaders were forewarned about all of this. I analyzed this plan way back in July 2014, after it was approved but before it was implemented. I warned back then it was going to drive up trash rates, and I wasn't the only one.

City Council members now are saying they may trash the contracts of some of these hauling companies if they don't step up their game, improve service, and cut back on the fees. But the RecycLA program had extremely expensive, front-loaded demands for trash companies to participate. It took years for all of this to actually be implemented, and in the process a bunch of small haulers were put out of business entirely. It's not like the city can just simply hand over responsibility to cover thousands of commercial and residential customers with a snap of a finger.

NEXT: More Perfect Season 2: Advocacy Masquerading as Explanation

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  1. Yeah, the city got its money. It doesn’t care what happens to you. When it comes to monopolies, I feel it is best to always err on the side of eliminating them.

  2. “Councilman Mitch O’Farrell, who represents neighborhoods from Echo Park to Hollywood, said he had received assurances that RecycLA would improve the “customer experience” for landlords, business owners and condominium complexes. “I feel I was sold a bill of goods,” he said before Tuesday’s meeting.”

    He received assurances, huh? From who? From the garbage companies that wanted the city to give them monopolies? No shit. Was he also shocked and complaining about being sold a bill of goods when he found out that the Snapple he was drinking wasn’t actually “made from the best stuff on earth”?

    1. He received assurances, huh?

      Backed by penalty clauses, I’m sure. And performance bonds. Like any fiscally responsible councilman would secure.

    2. He received assurances, huh?

      Backed by penalty clauses, I’m sure. And performance bonds. Like any fiscally responsible councilman would secure.

    3. I don’t believe him, and I wouldn’t expect anything different. He probably got good campaign cash from them.

      If you were a corrupt politician selling government favors, wouldn’t you advertise your services by making similar statements? I can’t think of a better way to do it. People should expect it, see thru it and vote them out.

      But it’s karma; the progressive liberals in LA got what they voted for, good and hard. I’d feel schadenfreude but for the people who didn’t vote for it, and don’t have a free market in trash removal.

  3. So WHY does Reason have offices in LA?? Huh? Answer that!
    Any self respecting libertarian focused organization should not be anywhere NEAR California.
    I call bullshit.

    1. Easier access for getting your message out to enemy territory?

      1. True. Look at the number of communists and coathanger abortion fanatics hang around here trying to convert us to the wonders of international and national socialism…

    2. The best cocktail parties.

    3. To have a local news source other than LATimes to keep suicide rates from skyrocketing.

    4. There are lots of good libertarians in in California, you just don’t know what the fuck you’re talking about. Just because someone is a coward and runs away from a fight doesn’t make them any wiser.

  4. Did an internet search on mafia garbage collection, the first three results…[not accusing the LA city council of anything, but…]

    Why does the mafia get involved in hauling garbage…

    Garbage collection | about the mafia…

    Why the mob is often tied to the garbage industry…

    1. Because there are only so many jobs in the construction industry?

    2. gotta get rid of bodies somehow.

  5. “If you like your garbageman, you can keep your garbageman.”

  6. Trash is such a great metaphor / descriptor for everything government related. Everyone knows what it is, so can relate.
    The only one that beats it is Shit.

  7. I thought LA was the dumpster fire…

  8. “The city also gets millions of dollars in franchise fees”

    Shouldn’t that be the city gets millions of dollars in Bribes. How the hell does a city get to determine how much a person gets to pay a city in order to work for the city? thats a bigger,safer, racket then any mafia don ever tried to conceive of.
    could you imagine applying for a job and the employer said you can work for me as long as you pay me money. No wonder the cost skyroketed

  9. Oh, a dose of Dumspter Neutrality will fix this problem…

  10. It’s gotta be the water… undetectable seismic vibrations… mass psychosis from Hollywood… something. How these people in California government (any level) produce enough electro-chemical power to run their brains is beyond me.

  11. This mess in LA is being foisted on the rest of California as CalRecycle is developing regulations under the Senate Bill 1383 – which aims to reduce organic waste disposal in landfills by 50% in 2020 and 75% in 2025. The new mandates require all residents to source separate food wastes and other organic materials from the trash can, regardless of the economics of recovery, collection, transportation and processing to create compost. Unintended consequences include sky-high curbside collection costs, decreased participation in established solid waste and recyclable material collection programs, and illegal dumping.

    In California that’s the price of “progress!”

    1. You forgot the most offensive unintended consequence. A plastic container filled with rotting food that reeks like the Black Hole of Calcutta. Actually, that’s probably an insult to the Black Hole. The only remedy is to hose it out often with scarce, rationed, potable water.

    2. Well it may not work, but it sure allows a lot of politicians to feel good about their virtue signaling and that has to count for something – no?

  12. I don’t see a problem. At its core libertarianism grants cities to freely devolve into the Thunderdomes they want to be. Good luck and godspeed LA. Burn baby burn

  13. I know how to handle this: rent control. By implementing rent control rental prices will go way down by which will allow more people to afford expensive garbage.

    I should have been a policy maker because I can easily envision simple solutions even if they do not work.

    1. You’re in. They only have to sound good. By the time the result comes around folks will be focused on other stuff.

  14. Well, if you want to get out of LA, Houston will gladly host your offices.

  15. Everyone should get paid more and everything should cost less. Just pass a law already!

  16. Morons gonna moron…news at 11.

  17. I see what you mean… Jesse `s postlng is neat… on monday I bought a top of the range Jaguar E-type after I been earnin $7477 this-last/4 weeks and-even more than, 10-k last-munth . no-doubt about it, this really is the most comfortable job Ive had . I started this seven months/ago and right away was making more than $73 per-hr . go right here


  18. “We even had to send the company pictures of our dumpster to prove no one had picked up our trash.”

    Wait, this is the next digital breakthrough. I mean, I can just send my bank a picture of a check to deposit, so why not just send a picture of trash to be virtually collected? All the millennials are doing digitial life, right?

  19. There is an entire field of study, called “economics,” that could have shown O’Farrell that this was going to happen.

    Yeah, but economics means capitalism, and capitalism is all evil and republican and stuff…

  20. To answer Scott’s question my guesses would be Adam Smith, Frederic Bastiat, William Graham Sumner, H.L. Mencken, Milton Friedman and Ayn Rand might have predicted what is happening in El Lay.

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