Business model of Republic Services

Customer Segments

Republic Services provides a range of waste collection and recycling services. The Company categorises its customers into three segments:

• Residential, with the Company providing curb-side solid waste collection services for residential communities under contracts with municipalities and local government bodies;
• Small-Container Commercial, with the Company providing waste collection services to small business complexes, multi-family housing and strip malls, and businesses such as restaurants, retailers, real-estate companies, and professional and other services; and
• Large-Container Industrial, with the Company providing industrial waste collection services to larger facilities, hotels and office buildings, as well as larger manufacturing companies, retailer, and hospitality businesses.

Republic Services also serves municipal and other local governmental authorities with waste collection and recycling solutions at government and public organisations and facilities.

Republic Services operates exclusively in the US, with activities in more than 41 states and Puerto Rico.

Value Propositions

Republic Services provides value to its customers in the following ways:

• Its industry standing, with the Company established as the second largest provider of non-hazardous solid waste collection, transfer, disposal, recycling, and energy services in the US, as measured by revenue;
• Its environmental initiatives, with the Company committed to supporting recycling, sustainability, and renewable energy projects and activities;
• Its domestic operational reach, with the Company operating an extensive infrastructure network in the US, with operations across 41 states and Puerto Rico;
• The quality and efficiency of its services, with the Company utilising state-of-the-art equipment and intelligent processes to deliver it services, with 72% of its residential routes operated by automated single driver trucks; and
• Its broad range of waste collection solutions, with the Company able to handle various types of no-hazardous waste for customers across various industrial, commercial, and government sectors.

Channels

Republic Services operates a website at www.republicservices.com, through which the Company provides information on its services, locations, and processes. The Company also operates an online customer portal at www.secure.republiconline.com/eportal, through which customers are able to request services, manage their accounts, and pay bills.

Much of Republic Services’s sales are made through its in-house sales force, which agree sales and service contracts with customers directly. The Company’s services are provided by its filed staff who provide waste collection services in person through an extended proprietary infrastructure network, which extends across 41 states and Puerto Rico. This includes 340 collection operations, 201 transfer stations, 193 active landfills, 67 recycling centres, 8 treatment and disposal facilities, and 12 salt water disposal wells. The Company also operates 69 landfill gas and renewable energy projects and has post-closure responsibility for 126 closed landfills in the US.

In some cases, Republic Services also operates through various third-party service providers and facilities.

Customer Relationships

Republic Services operates a self-service online customer portal, through which customers are able to schedule pickups, manage transactions, and report missed collections without interacting directly with members of the Company’s sales and support staff. The Company also allows customers to register for services autonomously.

Republic Services’s sales teams consult closely with customers in order to establish the detail of service contracts.  The Company typically provides commercial collection services under one- to three-year service agreements, with fees determined based on the market, collection frequency, type of equipment used, type and volume of waste collected, and transportation and disposal costs. The Company has both recurring and temporary relationships with its customers.

Republic Services provides support services to its customers through its online customer portal, as well as through its online customer support pages, through which complaints and enquiries can be sent autonomously. The Company also provides telephone numbers for customers to contact local company support offices, through which they can receive a more personalised service.

Additionally, customers are able to interact directly with the Company through its social media accounts, including with Facebook and Twitter.

Key Activities

Republic Services is a US-based provider of non-hazardous solid waste collection, transfer, disposal, and recycling solutions.

The Company organizes its operations into three segments, corresponding to its regional activities: East, Central, and West. Republic Services operates broad operational infrastructure network across 41 US states and Puerto Rico, including 340 collection operations, more than 200 transfer stations, more than 190 active landfills, approximately 70 recycling centres, around 10 treatment and disposal facilities, and more than 10 salt water disposal wells.

It also operates landfill gas and renewable energy projects, and has responsibility for a number of closed landfills. Republic Services provides residential collections services on behalf of municipal bodies, small-container commercial services for small businesses and commercial buildings, and large-container industrial solid waste collection services for industrial clients.

Key Partners

Republic Services collaborates with various companies and organisations in the collection and disposal of non-hazardous waste. These partnerships include:

• Private-Public Partners, comprising waste and recycling operations and facilities of municipal and other local governments, with which the Company collaborates on providing local services;
• Supplier and Vendor Partners, comprising suppliers of equipment, tools, services, and technologies that support the Company’s operations; and
• Strategic and Alliance Partners, comprising a range of companies with which the Company shares resources and collaborates on joint projects.

Republic Services has partnerships with numerous municipal bodies across the US. It has also launched commercial partnerships in recent years, including a tie-up with Recycle Bank to provide an innovative recycling rewards program that encourages individuals and communities to make more environmentally-conscious choices, and a marketing partnership under which it became the official recycling and waste partner of basketball franchise The Phoenix Suns and newspaper The Phoenix Mercury.

Key Resources

Republic Services’s key resources are its fleet of waste collection vehicles, its waste management and disposal infrastructure, its online portal and IT infrastructure, its sales and distribution channels, partnerships, and its personnel.

Republic Services owns and leases a number of properties across the US as part of its waste management operations, including collection facilities, transfer stations, active landfills, recycling centres, treatment and disposal facilities, and salt water disposal wells, as well as landfill gas and renewable energy projects and post-closure landfills.

Cost Structure

Republic Services incurs costs in relation to the operation and maintenance of its waste collection vehicles – including the acquisition of fuel, the operation and maintenance of its physical infrastructure across the US, the maintenance and development of its online portal and It infrastructure, the management of its partnerships, the implementation of marketing campaigns, and the retention of its personnel.

In 2015 the Company accrued total cost of operation in the amount of $5.52 billion, including $853.3 million in relation to maintenance and repairs, transportation and subcontract costs totalling $510.7 million, franchise fees and taxes amounting to $443.6 million, and fuel costs in the amount of $362.4 million. The Company’s selling, general and administrative costs – which included the payment of salaries and benefits to its workforce of 33,000 full-time employees – totaled $983.1 million.

Revenue Streams

Republic Services generates revenue through the provision of various waste collection, waste management, and recycling services. The Company derives revenue from several service lines:

• Collection services, including revenue derived from the Company’s core residential, small-container commercial, and large-container industrial solid waste collection services;
• Transfer services, comprising revenue derived from the charging of tipping or disposal fees at its transfer centres;
• Landfill services, comprising revenue derived from the charging of tipping fees at its landfill sites;
• Recycling services, comprising revenue derived from the processing and sale of old corrugated cardboard, old newspapers, aluminium, glass and other materials;
• Energy services, comprising revenue derived from the Company’s operation of treatment, recovery, and disposal facilities and 12 salt water disposal wells.
• Other services, primarily comprising National Accounts revenue generated from nationwide contracts in markets outside the Company’s own operating areas through subcontractors.

In 2015 Republic Services generated annual revenue of $9.12 billion, up on the $8.80 billion recorded by the Company in 2014. The vast majority of the Company’s revenue is generated through its collection services, which accounted 76% of its 2015 revenue. Within the Company’s collection business, approximately 25% of total revenue relates to residential services, 31% to small-container commercial services, and around 21% relates to large-container industrial services.