The Pro-Market Plan for Zoned Trash Hauling in Bethlehem

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A single trash hauler is the cheapest, greenest, and most efficient option for Bethlehem residents and city government without question, but Bob Donchez and Eric Evans think keeping a handful of redundant trash haulers in business is a more important priority than winning residents hundreds of dollars a year in savings from group purchasing, so it’s not on the table.

But every elected official still knows the current Wild West system is a failure, so now a “zoned hauling” plan is under discussion.

This basically means that each neighborhood would have a specific day for trash pick-up, which we really ought to consider the minimum acceptable outcome. It’s weak sauce though and city leaders can do better.

That’s why I’m proposing my own zoned hauling plan. Here’s how it works:

1. Divide Bethlehem into 4 “zones” – North, South, East, and West.

2. Put contracts out for bid on each of these zones, for 2-3 years maximum duration.

3. Allow trash hauling companies to bid on the contracts for up to 2 of the 4 zones.

4. Hold one or two public meetings in the different zones to review the bids, get public input, and get an advisory-only vote from neighbors on the plans they like best.

5. Take a Council vote to award the contracts to the highest value proposals (trading off comprehensiveness of the service package, lowest price, and meeting participant preference).

6. Do it all again in 2-3 years.

The virtues of this plan over the current system where each household chooses their own hauler are many.

For starters you actually get some meaningful competition. The problem with the current market is that there’s no way to know if you’re actually going to get better service for your money by switching haulers.

Under my plan, haulers have to compete on price and service quality with each other in a transparent way. And there’s a clear easy-to-understand process for evaluating haulers’ performance.

They have to participate in public meetings and defend their performance in front of neighbors and elected officials every few years to keep their contracts, so there’s an incentive for good behavior and great service.

You get real (albeit collective) choice in a real market. At the same time, you get the economy of scale of a single hauler, without concentrated service provider power limiting the cost savings captured by residents. There’d be real competition in each bidding period, not just a referendum on the current hauler with no meaningful alternative.

If people want a free market, Bethlehem should create a real market that is capable of doing what highly functional markets do best: shave service provider profits down close to the cost of production, for the benefit of consumers.

This entry was posted in Miscellany.

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