Rubicon Global has a way of eliciting strong opinions about its business model. Large companies may be dismissive, financial analysts may be intrigued, smaller companies may be attracted.
Regardless of their positions, everyone was watching Rubicon last week at WasteExpo.
The cloud-based waste and recycling company now touts more than 5,000 independent haulers in its network along with three municipal pilot programs and a slate of high-profile investors. Since Rubicon started in 2008, CEO Nate Morris has become known for espousing big goals about moving away from landfills, beating "the big three" companies and moving the industry to a more high-tech future.
All of these goals were on full display during WasteExpo's Investor Summit in an appearance that inspired more than a few hallway conversations. Morris told the attendees that freedom from physical assets and an understanding of millennials' sustainability interests made Rubicon more adept at changing the "status quo" within the industry, as compared to the existing companies that he said were unprepared for a coming shift.
"The people that own the majority of the feedstock in this country own the landfill. So it’s always going to be more cost-effective for them to take it to the landfill," said Morris.
While Morris admitted that Rubicon's hauler network does currently use landfills, he talked about the potential for new solutions as they begin to control larger portions of feedstock in the market. Repeatedly, Morris made comparisons to Amazon, Uber and Airbnb to describe where he saw Rubicon fitting into the waste business.
In the past, Rubicon's critiques and comments had inspired private frustration or were deemed unworthy of an official response. But later that afternoon, on the same stage, some of the industry's top CEOs publicly fired back.
When asked about landfill dependence, Waste Management CEO Jim Fish’s response was direct.
"To the extent that all of us own disposal facilities of some type, maybe we are married to it," said Fish, going on to note that at 30% margins, he was fine with that arrangement. "I’m agnostic here with respect to landfills versus recycling."
"There’s nothing unique about anything Rubicon or any other broker is doing in regards to sustainability."
CEO, Waste Connections
Other CEOs said they felt the same, emphasizing that customer preference and regional regulatory requirements were what drove their recycling efforts. Waste Connections CEO Ron Mittelstaedt said Rubicon had no ground to stand on because their hauler network used landfills and went a step further by using a descriptor that Rubicon strongly resists.
"There’s nothing unique about anything Rubicon or any other broker is doing in regards to sustainability," said Mittelstaedt.
What keeps Waste Management execs up at night?
This conversation continued the following day during a spotlight session on the "digitalization of waste and recycling." Rubicon's Director of Public Policy Michael Allegretti and Waste Management's Vice President of Digital Experience and Business Applications Mark Madsen were among a group of six panelists that discussed the many possibilities for future technological changes industrywide.
With support from Atlanta's chief resilience officer, Allegretti talked about collection trucks' vast potential for data collection. He envisioned scenarios where trucks could capture information about abandoned properties, burnt out streetlights, broken curb cuts, graffiti and a host of other key municipal data points.
"We have these roving data centers. The garbage truck. The only city vehicle that goes up and down every single street of every single city every week, and we haven’t tapped it at all," said Allegretti.
A subsequent presentation from Madsen offered an indirect counterpoint with all of the industry giant's own technological accolades. He talked about their 18,000 in-cab computers capturing information from 25 million stops per week — including 100,000 pictures — and also spoke about the untapped potential of fleet data.
The scale of Rubicon’s operations is still nowhere close to Waste Management, but it’s clear that their growing presence has been noticed. When asked by the session moderator whether the idea of a company that has often drawn Uber comparisons kept him up at night, Madsen avoided a direct mention but said his company was paying attention.
"I think providing our customers with the service that they need is what keeps us up at night," he said. "And if their needs are migrating more toward an on-demand model then we’re going to pursue that."
'We need the industry to evolve'
Waste Dive sat down with Allegretti after this session to dig a little deeper into the company's messaging.
As a former Uber strategist, Allegretti is more qualified to speak to the usual comparisons than most. When asked how it felt to hear so much public criticism from the industry's top CEOs, he initially demurred that it was just "great to be talked about," but eventually addressed the comments by comparing their position to taxi companies in big cities that have seen their market share challenged in recent years.
"The incumbent landfill companies are saddled with big assets and again that's where maybe this 'Uber for trash' comparison often comes from. The landfill is their medallion and the value of that landfill only rises if it is full of garbage," said Allegretti.
When asked what he thought about the technology presentations from Waste Management and others at the conference — and whether they answered any of Rubicon's longstanding critiques — he smiled and offered the following response.
"I have a simple answer to that: That's wonderful. Truthfully. We need the industry to evolve and certainly Rubicon Global is not the entire industry," said Allegretti. "Unfortunately, a lot of the technology that's being talked about in there from some of the traditional companies, if you dissect it one or even two layers beyond, it's quickly evident it's not next generation. It's maybe this generation, maybe the generation before."
"The landfill is their medallion and the value of that landfill only rises if it is full of garbage."
Director of Public Policy, Rubicon Global
During the Investor Summit, Morris predicted that the company could be partnering with 15 cities by the end of the year. While Allegretti declined to offer details on what these municipal partnerships would look like long-term from a business standpoint, he confirmed that they were a main focus for Rubicon with large potential.
"I will say it doesn't really matter to us if the city is located in Southeast Asia or in the Southeast United States," he said.
As described by Allegretti, Rubicon's app is customizable for any city's needs and can help them achieve a range of goals related to efficiency and sustainability. Atlanta is looking for better data to inform sustainability policy. Santa Fe is looking for more efficient routes that normalize hours for drivers. Columbus is looking for operational metrics to improve their rate of service.
Cities that are receptive to these changes are considered better fits, though Rubicon has also inserted itself into other markets as a way of initiating the conversation and engaging with competitors. For example, Nevada is known for having one of the lowest recycling rates in the country, so Allegretti recently wrote an op-ed supporting a bill that would have prohibited franchise agreements. Waste Management and Republic Services hold the largest franchise agreements in the state.
While Los Angeles is already set to begin its own large-scale franchise system this summer, New York is still years away from implementation and cities such as Boston or St. Paul have just begun considering the possibility. These discussions may provide new opportunities for Rubicon to pit their ideas against those of the "incumbents" once again.
"We're watching it carefully," said Allegretti of the franchise trend. "As we see certain cities moving toward...a more franchised system, that concerns us. I also know that there are very good people in places like New York City and [St. Paul, MN] who care deeply about the environment and care deeply about customer service. So I'm confident that those processes can lead in the right direction."
Based on Allegretti's experience successfully fighting Uber regulations in New York, and Rubicon's penchant for stirring the pot, the company's future role in one of these urban markets could well be the next conference’s big topic of conversation.