Reaching rural areas

Any time Utah-based Recyclops, which offers "convenient and affordable" recycling in rural areas across the U.S., launches a program in a new city, the business does a signup campaign for services to begin. When 150 residents signed up for the recycling program in two days in Pinetop-Lakeside, Arizona, Ryan Smith, Recyclops CEO, hopped on a plane to launch the program.

“If someone lives in a community that doesn’t have recycling, we will come,” Smith says. “All it takes for us to come is for people to get the word out, and the reason we’ve launched in the communities we’ve launched in is because someone from that community reached out to us and got things rolling.”

Smith started Recyclops while studying business strategy at Brigham Young University, Provo, Utah. He lived in an apartment, which didn’t offer recycling.

“In the U.S., I just expected I would be able to recycle,” Smith says. “I was surprised and shocked when I didn’t have access to recycling in my apartment.”

Smith founded the business on building small recycling sheds at apartment complexes with bulk bags inside to capture recyclables. The sheds were successful because “they looked really different from a dumpster, so we saw low contamination rates, about five percent,” he says. But the business wasn’t growing as fast as he wanted.

Smith shifted the business model to focus on recycling cardboard from businesses in Utah and partnering with a local material recovery facility (MRF) as a buyer. Recyclops had also acquired a small family-owned recycling company in Mapleton, Utah, and provided curbside pickup service to 2,000 residents.

When China stopped accepting recyclables in 2017 and the commodity price of cardboard dropped from $120 per ton to $20 per ton, “we needed to look where our business was healthy“ and “saw the business was working places where we were charging a service fee and not just making money from the material.”

Explaining his business model, Smith says he didn’t have the finances to purchase recycling bins, so Recyclops has residents bag their recyclables.

“We worked with the MRF to make sure we could do that,” Smith says. “They charge us a contamination fee, but still break open the bags and recycle what’s inside. At the same time, the bags made us more efficient because we can just grab and go.”

In addition, Smith didn’t have money to buy pickup trucks for collection services, so he created an Uber-style business model where a driver drops pins on a map using the Road Warrior app to pick up recyclables.

The success of the recycling program in Mapleton led Smith to conduct a study of 1,000 cities in the U.S. The study found nearly one-third of households don’t have access to convenient recycling. Upon further research, Smith estimated 34 million single-family homes in the U.S. don’t have access to convenient recycling in addition to the 16 to 20 million apartments that lack recycling services.

“As I started doing more research, it became clear it was a national issue with apartments and rural areas,” Smith says. “One of the biggest shockers for me was even rural areas in the greenest states—California, Washington—don’t have recycling. They might have a public drop-off, but that leaves a lot of people out who would recycle if it was more convenient to them.”

By the end of 2018, Recyclops launched in its second rural market, Vernal, Utah, where Greene Recycling, a small recycling business, had just shut down. The company now operates in 40 cities across five states and collects 50,000 tons of material per month and growing. In Vernal, the closest MRF is three hours away. In that case, Recyclops loads a trailer and transports the material for processing.

“We never make money from recycling, even if we could be selling recycling for rates that recyclables used to go for,” Smith says. “It costs more to transport the recycling and we don’t have the scale that enables us to use the most efficient transportation methods, so we do this.”

 

Recyclables collected through the program vary from city to city depending on what the nearest MRF or drop-off center accepts, Smith says. Most programs in Utah accept paper, plastic and cardboard, but the company works to add additional material to the stream. In Pinetop-Lakeside Arizona, Recyclops is partnering with the city to use the city’s drop-off center, which accepts glass. In Utah, glass isn’t accepted at the local MRF, but because a local glass processor accepts glass, Recyclops launched a pilot add-on program that charges residents an extra $2.50 for a monthly glass pickup, which 25 percent of residents in Utah “immediately” signed up for.

“We make sure our pricing model keeps the business sustainable without being able to make money on recycling," Smith says. "Of the $10 we charge for the program, we’re going to spend $2 to $3 getting recycling to the MRF and paying the tip fee.”

Recyclops has started several pre-signup campaigns in Texas communities, including River Oaks and Kaufman. Typically, Recyclops needs 100 households to sign up before starting service in a new area. The company is in the process of signing a contract with Kaufman.

“They put out a request for proposal,” Smith says. “We bid on it and we’re the only bidder, which is pretty normal in most cities we operate in.”

Recyclops also offers the recycling program to businesses and individuals living in apartments. The company offers door-to-door pickups at apartments instead of signing contracts with entire apartment complex.

The company’s goals are to include more add-on programs for materials, including hard-to-process plastics and food scrap. In cities where there’s a local compost option, Recyclops provides a small bucket for food scraps and adds on a $5 fee for the monthly pickup. In addition, Smith is in the process of designing an app to track and capture data to increase transparency in the recycling industry.

“We want them to know where their recycling is going and what it’s becoming instead of them putting it into the blue bin and having no idea,” Smith says. “We want people to know their water bottle became a new bottle or their cardboard box went to Mexico and became a new box.”