Don’t Forget the Free Riders

I’m impressed with John Callahan’s political strategy on the push for a single trash hauler, but any good political campaign needs a villain, and in this case it probably should be the free riders – people who do not pay for trash services, and irresponsibly dump their trash in other people’s dumpsters and garbage cans.

The flip side of the “freedom” to contract individually with a private hauler is that some people just don’t do it and dump their trash on the sly.

Clearly it’s illegal not to buy trash service, but there’s no practical way to enforce the law since it’s difficult to catch people in the act. And for the same reason, it’s hard to estimate how widespread the problem is. But I’ve heard plenty of stories about free riders dumping their trash in school district dumpsters, business dumpsters, and neighbors’ cans.

Callahan should incorporate the message about moochers into the campaign for a single hauler, arguing that the only way to make sure everybody’s paying their fair share is to have everybody pay for their trash service through taxes.

Comments

  1. GDub says:

    Pretty weak, isn’t it? You know a problem exists, but you can’t define it or measure it, so the best way to solve it is through a radical solution?

    Bethlehem trash is disorderly in appearance, but I’m skeptical whenever I hear about the power of government to push prices lower, especially when the government expressly wishes to raise revenue! So now we have to allow for private profit and government grafting in the bill? Sure.

    Is Bethlehem that much better at negotiating as a smaller city than Allentown that they’re $75 better per customer? What gives them that idea? What a larger contract will do is allow only a few larger firms to participate, which requires subcontracting, and administrative overhead, and pushes contracting towards monopolistic tendencies with part-time/uninformed/lazy people representing the government side. Won’t be the first time.

    A public policy idea should be able to stand on its own (factual) legs. Adults in this business don’t need a “villain”. It probably could work, but lets see the bids first.

    • Jon Geeting says:

      The proof is in the pudding, my friend. The service is cheaper and more comprehensive in every single other city that uses a single hauler. The burden of proof is on you to find a city with a fragmented market of trash haulers that is cheaper or offers more service to the average person. It doesn’t exist, but you’re welcome to try. In theory and in practice, the monopsony approach works.

      The fact is that while government is bad at a range of things, one thing it is very good at is using monopsony power to extract low prices from service providers. Medicare and Medicaid are excellent examples of this. I’d also be skeptical that they can get a better deal than Allentown, but that just proves my point – the bigger the group the monopsony represents, the bigger the savings. If people want really cheap trash service, get Lehigh County to negotiate a contract on behalf of all its constituent municipalities.

  2. Jim says:

    Allentown has twice a week service for trash. Bethlehem would not. A better comparison is Palmer township. They recently bid their contract for $280 per year. That is number city is using in most models.

  3. GDub says:

    I agree with you in some cases that government can do better in the market–especially something like health care, which demands an expert-level of knowledge which isn’t broadly available.

    I think this approach to trash collection is kind of silly, but for some people it clearly works, and the system seems to have some flexibility for amount of trash, frequency, etc. So while it isn’t “coordinated” its not catastrophically bad either. Getting your own trash collector hardly requires expert level knowledge, and things like word of mouth can make a difference in the market.

    Its funny that in recent elections the Federal Government has been roundly criticized for using contractors in place of civil servants, in particular for drastically overstating potential short term and long term savings. The problem with contracting is that it demands expert-level knowledge of how to write a requirement, how to vet bids, and how to follow up. Many local governments are simply terrible at this and end up providing crappy service (in other areas) for the same or more money.

    In fact, this issue shares a feature with a nearby government’s lease of the water system: “facts” about cost savings are freely tossed around by politicians without any recourse to a factual basis. It probably is a good idea–so let the potential contractors make a bid against each other AND the status quo.

    • Jon Geeting says:

      The question is whether Bethlehem residents can get as good a deal as Allentown residents on price and quality by changing haulers. The answer is no. To get the same level of service as an Allentown resident, a Bethlehem resident would have to pay more. That’s not just the monopsony effect – a hauler who can drive down the street picking up all the trash can do collections more efficiently than a hauler who’s doing two houses on this block, one on the next, etc. There’s an economy of scale.

      Even if you take imperfect knowledge on the government side as a given, when you actually look at what different towns are paying, the service is still cheaper and more comprehensive than what Bethlehem is getting. Switching to single hauler is not necessarily better for the people who want to make the low-service, low-cost trade-off, or for people who just don’t pay at all, but that’s why John Callahan needs to buy off the seniors with senior discounts.

  4. GDub says:

    I guess here’s the real question, since this issue is about 1% about improving service and 99% about city finances: how much money does Allentown count on making thorough “facilitating” the trash contract? Is trash collection and explicit “money maker” for Allentown? What does Bethlehem have to do differently to make enough money?

    Again, I’m with you on this one, but the mechanics of contract design are so vague or poor at a basic level, but the conclusions so certain, that I remain skeptical that the math has been done.

    • Jon Geeting says:

      Not sure, I’ll ask about it for you.

      The sound reason to make the change is to reduce the cost of living for residents, in order to help them afford the tax increases necessary to sustain other services.

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