Trash company merger could cost us
TEXT OF STORY
Kai Ryssdal: Bigger, generally speaking, is better in business, even when the business is garbage — or waste management, as the company in question would probably like us to say. Today, Waste Management, Inc., raised its unsolicited offer for this country’s No. 2 trash company, that would be Republic Services. They raised it by 10 percent. Which got us to wondering what effect a potential sanitation merger might have on the creators of a lot of that waste — you and me. From New York, Ashley Milne-Tyte reports
Ashley Milne-Tyte: A lot depends on who owns your local landfill. Seventy percent of landfill space is controlled by the big three private sector trash companies. Peter Anderson is executive director of the Center for a Competitive Waste Industry. He says independent and public landfills still have some room, but it’s dwindling fast.
Peter Anderson: When the uncontrolled landfill fills up — the independent landfill fills up – that’s the ticking time bomb.
Anderson says, when those landfills run out of capacity, the big trash haulers can hold their smaller competitors to ransom.
Anderson: And at that point in time, a small independent hauler will find, when he goes to the landfill, paying a tipping fee that is twice the rate that they’re internally booking the big guys. And they will not be able to compete.
When that happens, he says, the big guys will be able to charge customers more. He’s against the merger. So is Eric Lombardi. He runs EcoCycle, a recycling company based in Boulder. He says America should look for new, innovative approaches to getting rid of waste rather than just dumping it in a hole in the ground. And he doesn’t expect much from an enlarged Waste Management, Inc.
Eric Lombardi: Waste Management is not going to bring a lot of new ideas when they are as big and they have as many bank loans to pay off and as many trucks and cities to service, they’re going to stick with their business model, which is the one that’s been working for the last 20 or 30 years.
Lombardi suggests the company adopt EcoCycle’s business model of recycling virtually everything. He says he’d welcome a little more competition
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I’m Ashley Milne-Tyte for Marketplace.
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