Recyclebank’s rewards program is no less than a revolution in the household recycling market, providing people with monetary incentives to increase their recycling. Can this model work in other markets, like transportation, for example? Recyclebank believes it can and so does Transport for London (TfL), which is partnering now with Recyclebank to encourage Londoners to walk and cycle more.
The program, which will be tested later on this year and is scheduled for spring 2012 just in time for the Olympic Games, is going be the first time where people receive monetary incentives to cycle or walk. Therefore it is going to be an interesting test not just to Recyclebank’s model, but also to the assumption that positive incentives can motivate behavioral change when it comes to transportation.
This groundbreaking scheme is aimed to meet TfL’s goal to increase in the number of people who walk or cycle in London. TfL, which operates London’s transport system, explains that more walking and cycling will help reduce pollution, ease congestion and boost fitness among Londoners. Another important result for TfL would be fewer overcrowded trains and buses, improving the public transport experience for everyone.
Users of the new scheme will utilize a special smartphone app that will record their journeys on foot or by bicycle and will award them with points every time they make such a trip. These points could be redeemed later on for discounts and special offers with Recyclebank reward partners, such as Marks & Spencer or Cineworld.
Although there are still couple of challenges to overcome, such as the need to recruit more reward partners, Recyclebank is confident the program will succeed. Rob Crumbie, director of marketing at communications at Recyclebank said “we are confident our plans for transport will result in even more people cycling and walking.”
If Recyclebank is right and the program will generate successful results, London is not going to be their last stop. “Our hope is that this program becomes something that other cities can emulate to reduce their environmental footprint, realizing the collective impact of individual green actions,” said Jonathan Hsu, CEO of Recyclebank.
Hsu is not talking only about transportation. Recyclebank hopes to copy its model to other markets, such as energy and water, as well, creating similar incentives for people to reduce their water and energy usage. If they will manage to do so and expand to further markets, they could actually create what Ron Gonen, co-founder of Recyclebank, called Gconomy, “a place where communities, companies and individuals are financially rewarded for positive green actions that create economic efficiencies.”
The agreement with the TfL provides Recyclebank an opportunity not just to expand to new markets, but also to expand to new territories. Although it launched a rewards-for-recycling program in the Royal Boroughs of Windsor and Maidenhead in June 2009 and has since expanded to other boroughs, including the Lambeth neighborhood of London, Recyclebank is still mainly a US-based company. If this deal will work, it can be help Recyclebank to further penetrate Europe and increase its global reach.
In the meantime, Recyclebank is working hard to strengthen its position in the US as well. Last week Waste Management, the leading provider of waste management services in North America, announced it is making a strategic investment in Recyclebank. According to the announcement, as part of the investment, Waste Management expects to provide access to Recyclebank’s green rewards program to its nearly 20 million North American customers over the next several years.
This is going to be a huge step forward for Recyclebank that right now has close to 3 million members in the U.S. and the U.K. It also means that Recyclebank will take over Waste Management’s Greenopolis social recycling platform, making Recyclebank the leading online recycling rewards program in America.
It is interesting to see that Waste Management decided to give up its competing green rewards program and instead invest in Recyclebank. It shows how well Recyclebank works and how they managed to create such a comparative advantage that no one, even not Waste Management, can beat.
Waste Management joins a long list of VCs investing in Recyclebank. If Recyclebank’s new partnership with TfL will succeed and more will follow, I have the feeling that the word IPO will come up eventually. It definitely makes sense considering the results Recyclebank achieved so far. If they will succeed in London it will be another proof that when it comes to change the way mainstream consumers behave, they are one of the best agents of change we have in the field.
Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.