A few months ago I had lunch with a few friends at a former classmates new franchise restaurant; Triple O’s in Singapore. The purpose of the lunch – besides eating some delicious burgers – was to meet a visiting entrepreneur from South Africa who was staying with another friend via the couchsurfing community. I was feeling tired that day and almost didn’t make it. But I am glad I did because I got to learn about a wonderful new venture based in Cape Town, South Africa called TrashBack.
WHAT IS THE BUSINESS ABOUT?
TrashBack is a innovative incentive model known locally as “uphinda-phindo!” that encourages locals to recycle waste in informal settlements near Hout Bay in Cape Town, South Africa. It does this by paying people with vouchers for brining recyclable materials to the TrashBack locale. These vouchers can be used to pay for goods at local community stores. Vouchers are paid out and cashed in using a unique low cost biometric recognition technology called “The Broccoli Project”. Vouchers are used instead of cash so that the program can be sure that participants are using the rewards for helpful items such as food and clothing and not alcohol or drugs. It also makes sure that the benefits are kept within the community, stimulating the local economy. TrashBack also requires some education/training about recycling and environmental protection for participants to be allowed to enter in the program.
HOW DID IT START?
The idea for the business was started by a pair of PhD students at University of Cape Town. They chose to start with the idea in Hout Bay because of the communities already existing commitment to recycling having set up a government recycling program as far back as 2004. The founders built upon the idea, and the energy already in place and brought in TrashBack as a way to make recycling sustainable. TrashBack officially launched in September, 2011 with local NGO called Thrive, the Hout Bay Recycling Co-op and The Broccoli Project. You can find out more about the launch here.
WHAT IS THE SOCIAL NEED IT ADDRESSES?
It encourages poor communities where waste management is a major problem and rubbish is thrown on the ground to manage their own waste and clean up the local environment. To date since its start it has recycled almost 30 tons of waste, involved almost 600 participants and paid about nearly 20k $R in rewards.
WHAT IS THE BUSINESS MODEL?
TrashBack makes money by selling the processed recycled waste to interested third parties. It pays its “employees” or really local volunteer collectors by rewarding top collectors for their efforts with vouchers (explained above). To make sure that collectors are being honest, TrashBack keeps track of contributors by recording a biometric fingerprint scan when they deposit the rubbish at the collection center.
WHAT ARE SOME CONCERNS I SEE WITH THE MODEL?
- Scalability – I wonder how context specific this intervention is and whether or not it would work in other communities that don’t have the previous tradition of caring about recycling.
- Competition – Overall I like the idea of using competition as a wedge to incentivize the users collect more rubbish. But it is possible to imagine that some collectors might cheat and steal rubbish from peers or collude to always be the high collectors.
- Technology – The biometric technology seems unnecessary and expensive, would there by lower cost ways of achieving the same results of monitoring the collections by participants
- Monetization – So far it doesn’t seem like the business is making enough money to be sustainable without donor and community support. To be fully sustainable they should explore other ways to leverage the information and data they collect. For example I think that the business model hasn’t fully explored the potential to exploit the participants biometric data for other business/community activities such as a credit register that could be used by microfinance banks to know how much money users are making and who is up to “good behavior”.
WHAT IS YOUR VOTE?