Recycle Track Systems

Recycle Track Systems starts first-ever municipal contract in Indiana

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By Cole Rosengren

Dive Brief:

  • Recycle Track Systems (RTS), a New York-based service provider known for its technology platform, has won its first-ever municipal waste collection contract. Valued at $3.75 million, the deal with La Porte, Indiana runs for four years with the option of a three-year extension.

  • This contract was previously held by Waste Management. Now, RTS will facilitate service to 7,500 residential and government locations through local company LakeShore Recycling & Disposal. Every truck will be outfitted with the RTS technology platform, which allows residents to manage service and helps the city optimize routing.

  • "We're thrilled to start this partnership with the City of La Porte which is joining the smart cities movement to become more efficient in managing waste," said Adam Pasquale, co-founder and COO, in a statement. "Waste collection is an essential city service and we're excited to introduce our technology solutions to help improve services for residents and support the city's sustainability goals for the future."

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'Uber for trash' uses rideshare technology to collect waste

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By Gillian Brassil

Four years ago, Greg Lettieri and Adam Pasquale found their startup idea in the garbage.

The CEO and COO, respectively, of Recycle Track Systems (RTS) offers up environmentally focused waste removal and recycling by connecting its clients with independent haulers. Its major selling point, however, takes a page out of Uber's driving manual, using technology that tracks trash from pickup to drop-off.

New York-based RTS partners with local sanitation companies to transport garbage by installing rideshare tech in their trucks. Client companies get multiple notifications on where their waste is going via RTS's proprietary software and experts in waste management. RTS also offers on-demand service for larger items, like furniture or electronics. In June 2017, the company closed a series A financing round with Volition Capital worth $11.7 million.

The startup aims to take food waste straight to the farm where it is converted to soil. Waste with high potential to be laced with plastic gets sent to a facility to be cleaned. In fact, the CEO explained that environmental concerns are a focus of his company.

"Food waste is 35 percent of the waste stream, making it a real problem with landfills," Lettieri told CNBC recently. "We need more people on this, the amount of material being thrown out needs to change."

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RTS operates in New York, Washington D.C., Philadelphia, Baltimore and Chicago, offering its services to restaurants, schools, hotels, stadiums and supermarkets.

RTS software collects data on what type of waste the company is producing and how to reduce their footprint, and a company expert can give a lesson about how the client can be more sustainable. One of those clients is WeWork, the booming work sharing company that has locations mushrooming all over New York City that started working with RTS back in February 2016.

Source: Recycle Track Systems 

"As we expand our footprint, we have to consistently consider our impact on the local community and the environment," said WeWork's director of Tri-State operations Jeff Safenowitz.

RTS's current list of clients also includes Whole Foods, the Barclays Center, Citi Field, SoulCycle, WeWork, the Washington Nationals and the D.C. United.

Citi Field, home of the New York Mets, has been working with RTS since October 2017. In one of their largest collaborations with the field, RTS helped clean up after the 2018 National Hockey League Winter Classic.

After the event, RTS donated 18,000 square footage of plywood used to build the rink, and 27 rolls of unused snow to Materials for the Arts, a Long Island City, NY-based program that supports thousands of non-profit organizations and public schools throughout the Big Apple.

"Baseball is getting serious about going zero waste and being more sustainable, it's a major responsibility for us and for sports teams and leagues in general" said Micheal Dohnert, Operations Director at Citi Field. "RTS has been pretty incremental in that: what needs to be replaced, what should we be looking for."

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Recycle Track Systems Wants To Be The Next Uber For Garbage

 

Legacy garbage giants like Waste Management and Republic Services are starting to feel pressure from startups aiming to reinvent the way garbage is carted and dumped. Forbes has written about Rubicon Global, a decade-old Atlanta company that uses technology to connect haulers with municipalities and businesses. Rubicon, which hit a $1 billion valuation at its last capital raise in September 2017, has attracted controversy, including a critical Bloomberg story that cast doubt on the $300 million in annual revenue Rubicon founder Nate Morris has claimed. While Rubicon has made headlines as the Uber for trash, another disruptor, Recycle Track Systems, has been quietly adding customers and expanding its reach beyond its home base in New York City. RTS was founded in 2014 by former Bank of America senior vice president Gregory Lettieri, 35, and his buddy Adam Pasquale, 41, whose great grandfather started in the garbage business with pushcarts on Mulberry Street in Manhattan’s Little Italy in the early 1900s. RTS has raised $11.7 million in investment capital and signed up more than 500 customers including WeWork, Whole Foods, Soul Cycle, the Barclays Center and the Pierre Hotel. It’s servicing WeWork and Soul Cycle locations in Washington, D.C. and Philadelphia, in addition to other customers in those cities. RTS’s main offering is its software platform and mobile app, which allow customers to schedule on-demand pick-ups of, say, a half-dozen dented desks from a WeWork location in Soho or a pile of broken stationary bikes from a Soul Cycle on the Upper East Side. Along with this Uber-like service, RTS does regularly scheduled pick-ups. It contracts with local haulers, providing them with tablets that run RTS software. Though it has no trucks, RTS owns trash and recycling containers that it supplies to clients. RTS staffers train clients in how to separate trash to comply with city regulations. Last year, RTS had revenue of more than $10 million. In this interview, which has been edited and condensed, RTS CEO Lettieri describes how he and Pasquale got the company off the ground and why he believes it can compete for a share of the $65 billion garbage market.

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An ‘Uber for garbage’ picks up steam, and $11.7 million in Series A funding

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Sometimes, it seems like every possible on-demand service that could be created has already come along — and, in some casesgone away. But Recycle Track Systems (RTS), a two-year-old, New York-based waste and recycling management technology company, serves to remind that there remain plenty of opportunities for startups looking to turn our smartphones into lucrative businesses.

Indeed, while companies have sprung up around everything from on-demand family care to shipping, the waste industry — valued at anywhere from $45 billion to $65 billion when accounting for collection services, treatment and disposal — has largely been left untouched by tech founders.

That’s changing. Already, one company, nine-year-old Rubicon Global in Atlanta, has raised more than $145 million from investors — including private equity king Henry Kravis — to steal away market share from incumbents like Waste Management and Republic Services. Now, RTS is aiming to do the same by making it simple for customers to schedule on-demand pick-ups through its phone app.

A high-tech garbage service may sound ridiculous to the uninitiated. But it’s no joke to customers like WeWork, Whole Foods and SoulCycle that have signed multi-year contracts in exchange for RTS’s flexible pricing options, along with notifications about when a truck has arrived and reports about exactly where their waste is being sent.

Investors are taking the company seriously, too. For starters, RTS is an asset-light business. Instead of purchasing its own trucks, RTS is partnering with a growing number of mid-size, independent haulers that it provides with feature-rich tablets to make their work more efficient — even when they aren’t being used in service to RTS.

Another apparent part of RTS’s appeal is that it’s profitable, though that might change, now that the 17-person company has raised $11.7 million in Series A funding from the Boston-based growth equity firm Volition Capital —  money it plans to use to hit the gas. (Notably, Volition was the first outside money into Chewy, a pet supplies company that sold to PetSmart earlier this year in the biggest e-commerce sale to date, ever.)

To learn more, we talked yesterday with RTS co-founder and CEO Gregory Lettieri about the company and the opportunity it’s chasing. Our chat has been edited for length.

TC: Your business is centered around taking the guesswork out of the garbage-collection process. How did you decide this was something you could turn into a business?

GL: I met my co-founder Adam [Pasquale] about 12 years ago. We lived in the same apartment complex in New Jersey. A couple of years ago, I was working as a SVP at Bank of America, building tech portals for traders. Adam is meanwhile four generations in waste recycling; his father and grandfather before him [operated their own sanitation company]. One day, we were on a couch, watching a soccer game, and we got to talking about this idea and I think within 30 days we’d created the company.

TC: Is the idea to sort of complement the waste management services that are out there, or to replace them? Is this a service that’s focused mostly on customers who care about sustainability?

GL: It matters a lot to high sustainability customers, who want to know that their efforts to separate out food waste isn’t [a squandered effort]. They can now see that an organic truck picked up their material and took it to a waste energy facility or to a farm, and we can provide real numbers, not estimates.

We could work alongside [traditional waste vendors]. But there’s no reason to do that. We can compete head-to-head with them and beat them. In this business, you want to own the entire waste stream. That’s when you can affect change. You can train customers: here’s how you divert more, here’s how you get more out of the landfill . . .

TC: Say I’m using a waste service that’s basically fine. Beyond the tracking piece of your technology, why do I stop using my service and start using yours? How does the on-demand piece work?

GL: You want to get rid of something, extra material, anything that doesn’t fit in a garbage bag. WeWork has broken chairs sometimes, broken desks. Throughout its portfolio, especially when it’s remodeling a space, it has materials to get rid of. We pick them up.

TC: How do you charge? One fee for an unlimited number of on-demand pick-ups per month?

GL: We establish yearly contracts, charging so much per month for an office space after we do an audit on the business and establish that it generates, say, 50 bags of garbage in a set amount of time. Everything above that then is extra.

TC: Whose trucks are you using?

GL: Trucks that we don’t own. There are 18,000 mid-tier independent hauling companies in the U.S., and what [we’re telling them is that] we have the technology; we can get these clients. We’re using tech to fill out these routes that already exist. These trucks are traveling seven days a week anyway, but we’re providing them access to business that they didn’t have before. We’re bringing together these independent operators to create our own virtual fleet.

TC: You’re in New York, where Waste Management doesn’t operate anymore because it was too expensive. 

GL: They pulled out five-plus years ago because it wasn’t profitable for them. New York is very competitive. There are 120 licensed [waste management] companies. But it’s a great breeding ground for us. We work with 10 operators in New York, and we might add another one to two operators, but that’s sufficient enough to have operators to service the entire city.

TC: Where else are you operating?

GL: Philadelphia and Washington, D.C. We’re also in other markets, including Boston and San Francisco, but we haven’t employed our full approach there.

TC: What does your business look like in those other markets?

GL: San Francisco is a single territory market, for example, so we operate there as a consultant for our East Coast-based clients that have sites in California, like WeWork.

TC: You’re basically overseeing a marketplace. Can you share any metrics with us that highlight your growth to date?

GL: We’d rather not get into our numbers publicly. But we do have two [groups to please]. One is the “generator” as we say in this industry — it’s the customer that’s producing waste, like Whole Foods. Our other customer is the companies that own the garbage trucks.

You need customers, because the more customers you have, the more hauler relationships you have; it’s additional revenue for them. And the more haulers you have, the more access you have to cities and markets.

In some markets, we approach haulers first, then we’re putting salespeople there. In other markets, we have more salespeople and we need more hauler relationships.

TC: There’s also another market you might try tackling eventually. Can you elaborate?

GL: Because we’re able to separate out and track what’s on these trucks, we can turn that material into additional revenue. There’s a $90 billion secondary market for commodities like plastic and cardboard that are taken in big quantities and then sold to [specific] markets in the U.S. and Asia.

For example, right now, some of our customers will have us pick up broken light fixtures or construction materials. Sometimes, they’ll ask us to pick up and handle their electronics recycling. We have relationships with local facilities that will break up the circuit boards and tubes and separate them into different containers and send them out to the appropriate buyers. It’s not a huge part of our business today but it will be as we grow over time.

People are interested in smart cities and smart trucks, and controlling the flow of material and waste is only becoming more important.

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