I have been informed about Rubicon as soon as it was created by some good friends from the US. I share the core idea of the company: to disrupt the waste and recycling industry and create less expensive, more sustainable solutions. I watch carefully the evolution of Rubicon, something that is not so difficult as the company creates headlines (like “Rubicon Global Picks Up $50M for On-Demand Trash Removal” or “Why did Leonardo Di Caprio join a garbage start-up“) more frequently than any other company involved in waste management. So, today, I am really happy to publish a guest-blog about Rubicon, authored by Michael Allegretti, Head of Public Policy, Rubicon Global. I did enjoy it and I am sure that you would love it, too.
“The traditional asset-heavy waste industry, where landfills are the end destination for most of our trash, has long been primed for disruption. And with citizens increasingly demanding cleaner air and purer water, the environmental and socio-economic costs of burying our garbage are no longer simply deemed acceptable. By running robust data analytics, shifting economic incentives, and adjusting behavioral norms, it is possible to change the way we deal with trash. But we must start now.
An antiquated model
Dominated by a few large incumbents who own landfill real-estate, the U.S. waste industry in particular profits largely from maximizing landfill tonnage and increasing frequency of trash pick-ups. In fact, sending as much waste to a landfill as possible is proving to be a very profitable business model for these players.
According to the World Bank, humans are producing 1.3 billion tonnes of garbage per year globally. That equals the weight of more than 3,500 Empire State Buildings, or 10 times the entire weight of Manhattan Island, including all infrastructure, people, vehicles and more. This level of waste is projected to nearly double by 2025, increasing to 2.2 billion tonnes of garbage per year.
Inadequate recycling and repurposing infrastructure, paired with the modern “make-take-waste” culture and misaligned business incentives, have conspired to produce exponential growth in the amount of waste sent to landfills each year. While many factors are at play, a business model that rewards landfilling over diversion is proving to be at the heart of the matter, but also proving to be the ripest target for disruptive innovation.
Disruption by technology
Businesses large and small have begun to search for solutions to this antiquated
model. Rubicon Global is one of them, and what this company is doing is nothing short of game changing.
Using technology and verified data analytics, Rubicon has built a transparent, mar
ket-based approach to sustainable waste solutions and realigned incentives to divert waste from landfills, enable zero-waste business models and encourage a more circular economy. Have we achieved everything we have set out to do? Of course not. But our goals and our incentives point us in a decidedly different direction than the big industry incumbents.
The average diversion rate for the leading landfill companies is in the single to low-double-digits at best and will likely decrease given their aggressive divestment in recycling infrastructure. In contrast, Rubicon Global’s current diversion rate is more than 3 times the amount of those companies.
So how is Rubicon doing it? We built an asset-light, cloud-based technology and big data platform that connects customers with a network of independent haulers. These haulers compete to drive down cost and increase service quality. And as part of working with Rubicon, we help our customers and hauler partners understand what the data we collect means. This leads to informed decisions that enable higher diversion rates and more creative reuse of waste materials, optimized truck routes, and the collection, analysis and ability to act upon detailed information to make better business and policy decisions.
But this is only the beginning.
Big data brings results
Disruption through technology leads to further connectivity and big data, which brings even more efficiency and market opportunity. Rubicon, among others, sees the waste industry as the next great opportunity for the industrial internet of things (IIoT), incorporating analytics and machine applications to gather, analyze and share big data to enable circular decision making. By circular decision making, I mean designing with the end in mind. Truly circular decision making requires data as materials pass through the value chain – from raw materials to OEMs to retailers to recyclers and beyond. Being able to track product lifecycles from creation to end-of-life enables players up and down the value chain to redesign and intercept lifecycles with higher market value solutions for waste materials.
Rubicon is leading the way in gathering waste data that has never before been available, calculating accurate landfill diversion rates and quantifying GHG emissions avoidance from waste and recycling activities.
Down to the second confirmations of pick-ups and tonnage for haulers and customers is providing a new level of detail and accuracy in waste reporting. Routing and payment through to the deposit site (and eventually to the end buyer) is further connecting the waste value chain. Intelligence from IoT technology is identifying operational savings and new revenue sources across the waste network, causing businesses to shift perspectives on waste as a manageable, sustainable asset.
But technology and big data are not the only answers needed to curb the growing tide of trash. Small to medium-sized businesses account for more than $40 billion of the U.S. waste and recycling market, and those business owners are often strapped for resources and reluctant to change their operations, provided that they have ever even thought about their waste provider for more than a moment when they pay the monthly bill.
Educating these businesses and providing affordable waste solutions for “Main Street” is critical to successfully disrupting the waste industry. Rubicon is addressing this market head on with a dedicated network of approximately 5,000 independent haulers across the U.S. Through a more cost efficient model and realigned incentives, Rubicon is building a market base that could turn the industry on its head.
But one more challenge remains: changing consumer behavior. Remember, consumer behavior adapts to market pressures. Has technology made the incumbent business model obsolete, or at a minimum forced it to change in accordance to the new norm? Changes up and down the value chain rely upon disruptions to the status quo. If Rubicon and other disruptors do the job right, we may start to solve our global trash problem, but to do so, we need strength in numbers.”
Michael Allegretti is Head of Public Policy, Rubicon Global. Well-versed in disruptive business models, Allegretti oversaw the public policy, political and community engagement strategy for Uber in New York, where he took on the political establishment and beat Uber’s largest competitor, the city’s incumbent taxi-industry. Allegretti also served as a senior advisor on U.S. policy at The Climate Group and organized the 2007 C40 summit on global environmental and economic issues. He holds a master’s degree in public policy from the John F. Kennedy School of Government at Harvard.