There are a few questions we get asked quite often when we discuss the pricing of our VIP membership;
Why do you charge when others collect for free?
Don't you make money from the material you collect?
Why would I pay when I can put my recycling in a recycling bin near me?
We've gone over the issue for many months at Ree and have distilled it down into the simplest form. When looking at providing a customer with a service it comes down to three things:
Time - how long does it take to perform the service
Cost to the customer - Do we apply a charge
Effort - How much effort is placed in performing the tasks the service provides
The scenario is, you can only apply two of the three in order to run the business. The first should be obvious;
Time = Money
Every business should try to complete its operations as quickly as possible, right? That leaves "Cost to the Customer" and "Effort".
In order to do things correctly it requires Time and Effort. We sort every bag we receive so that we can make sure nothing that can be recycled will go into landfill. This means that a cost has to be applied to the customer.
Now if we choose to not charge the customer, it leaves us with not putting the effort into sorting the bags. There are ways of making this work, for example only collecting Plastic and Aluminium, aka the higher value recycling, but this doesn't align with our beliefs. Recycling should be a full service, what's the point of sending your cans to be recycled while your cardboard, paper, glass, fabric and eWaste goes into the local landfill?
Now there is another option, taking all 3. Charge the customer, do it quickly and without any effort. From a purely business point of view this would be the ideal scenario, charge customers to collect their recycling and then just dump it. That's not the Ree way, our priority is to avoid anything going into landfill not to profit from people's efforts and desires to improve the environment.
The next question - Don't you make money from the material you collect?
The answer is Yes we do, but at the time of writing the value of 1 tonne of cardboard is currently 740AED. On average we collect approximately 700g cardboard from each member per month. So in order to get 1 tonne of cardboard it would require 1,428 members having 4 collections per month, resulting in a pay-out of 740AED.
I think you’d agree that 0.13AED per collection doesn’t make business sense. Obviously there is other material in each collection but still not enough to cover costs. Hence why there is a fee for the service.
3rd Question - Why would I pay when I can put my recycling in a recycling bin near me?
There is no reason to at all, but how often have we seen bins with separate sections in the lids that then go into a single bin, or watched as the contents of different recycling bins are just thrown together onto a back of a van*.
As mentioned above, recycling requires effort and unfortunately quite often following through on recycling is not worth it. Instead recycling bins are provided to create a false sense of satisfaction, but look a little deeper and you realise it’s very shallow.
There was one interaction with a bin man we had where we confronted him about throwing all the sorted recycling from separate bins together with the general waste. His response was - “I get paid 800AED a month, why should I care”
This really stuck with us and became a key part of our business, which was to treat our staff with the respect and salary they deserve. For the sake of transparency our basic salary starts at 4,000AED regardless of the job role. Therefore our drivers and sorters are paid a living wage. This again comes back to the fact that we charge a fee for the membership…there are human beings making this #Reevolution happen!
*We realise that we see this a lot because we are always looking and watching recycling bins everywhere we go like a recycling version of trainspotters.