Published onÂ ReutersÂ on July 23, 2015
Written by Jeffrey Goldfarb
Plenty of Uber-but-for-something-else ideas will end up in the Dumpster. Rubicon Global could be one that cleans up. The Atlanta-based upstart is leaning on data and mobile technology to shake up the traditionally capital-intensive business of hauling garbage.
Rubicon is close to raising a fresh $50 million, barely six months after a $30 million round that included funds fromÂ Salesforce.comÂ Chief Executive Marc Benioff. The firm also just had its Uber-like business model validated by a qualified arbiter. In his first new role since resigning in March as chief financial officer at Uber, Brent Callinicos recently joined Rubiconâ€™s board of directors.
The pitch from Rubicon suits a growing number of companies seeking environmentally responsible programs. Because it connects different garbage-service providers rather than owning trucks or landfills, the firm is happy to pick through waste and find independent haulers for recyclable materials as well as refuse.
Small contractors who might not otherwise be able to compete can bid online for a slice of business. Rubicon says it typically slashes bills for clients like 7-Eleven by 20 to 30 percent. It gets paid based on savings.
That model is distinct from incumbents like Waste Management, which on Thursday blamed a 7 percent quarterly sales decline in part on lower recycling revenue and said it would keep raising prices. The company has embraced technology, outfitting trucks with tablets to improve efficiency. It also bought online garbage broker Oakleaf a few years ago. Waste Management, though, is stuck with an integrated business that includes landfill assets with a cost basis of $13.5 billion.
Whatâ€™s more, while regulations often hamper iconoclastic competitors like Uber, Rubicon finds some to be in its favor. Massachusetts, for example, last year passed a law requiring large producers of food waste to compost it instead of dumping it in landfill.
U.S. trash is estimated to be a $48 billion market this year by research firm IBISWorld, but it isnâ€™t a high-growth business. That means any Rubicon share gains will be at the expense of Waste Management and Republic Services, which control nearly half the industry and have a combined capitalization of $36 billion. Each trades at about 18 to 19 times expected earnings. If they arenâ€™t flexible enough to respond, that kind of multiple may soon be trashed.