Think of what eRecyclingCorps does as impulse recycling.
The company–which has just received an injection of $ 35 million from Kleiner, Perkins, Caufield and Byers and other investors—has devised a software application and an ecommerce network that effectively lets consumers trade in their old phones for cash credit when they are picking up a new one at thousands of cellular stores across the country.
Let’s say you’re in a Verizon store buying a 4G Galaxy Nexus from Samsung for $ 299 to replace a Blackberry 9630 you bought a year ago. The clerk hits a few buttons and says, if you want, you can turn in that nearly new HTC for a $ 22 credit. Since the alternative is sticking it in your desk at home or waiting (and forgetting about) an e-waste drive at your local school, you go for it.
ERecyclingCorps, now the new owner of the old phone, subsequently wipes off all of the data, refurbishes it, and sells it to a carrier in an emerging nation like India or Mexico. In India, cellular customers on average only spend $ 7 a month for service, so cheap, refurbished phones are in demand, according to David Edmondson, co-founder and CEO of eRecyclingCorps. Carriers aren’t in a position to subsidize many handsets with two-year service contracts.
“The wireless industry has changed the way people live and work. It has changed the way we interact as humans, but it has also had unintended consequences,” Edmondson says. “We are at a point where they (wireless devices) are perceptually obsolete but not actually obsolete.”
In a sense, the company is trying to harmonize human behavior, recycling laws and trends in wireless to improve the business case for recycling. Several states have passed e-waste mandates: California applies a recycling fee on consumers at the point of sale on some (but not all) electronic devices. Others force manufacturers to fund programs according to their estimated market share. Either way, the sad fact is that most consumers simply let their old VCRs and phones fester around the house.
Trade-in programs are offered by many retailers, but often the payment is low and the programs require consumers to send in their phones by mail. An iPhone 3G on NewEgg’s trade-in site can fetch a $ 90 bounty, but most used phones and laptops have a trade in value of exactly zero. (ERecycleCorps’ prices are both worse and better. The same iPhone would get $ 55 from the company while a HTC Droid Eris would get $ 5 instead of three. But again, no mailing.)
By willing to buy phones at the point of sale and taking title to them, eRecyclingCorps effectively eliminates friction for consumers, who want a simple process, and the retailer, who wants to avoid any financial risks. If anything, the retailers seem to like the concept. ERecyclingCorps’ service is already available at 1,000 Sprint PCS stores, 530 Verizon stores and several independents. By the end of the first quarter, eRecyclingCorps will be available in 5,000 outlets. Connections help: Edmondson was formerly the CEO of RadioShack while the other co-founder, Ron LeMay, served as CEO of Sprint PCS.
Edmonson adds that 97 percent of the phones get repurposed as phones too—only 3 percent get sent to metal shredders to be converted into scrap materials. Trade-in values range from 0 to $ 250, he said. Supplies of decent phones in working order aren’t a problem either, Edmondson adds. The average U.S. consumer keeps a phone for 18 months while 44 percent of smart phone customers replace theirs every 10 months. In India, customers often keep their phones for six years. Since 2009, eRecyclingCorps has taken in over 2.5 million phones. The Environmental Protection Agency estimates that there are 800 million or more MIA phones in the U.S., he says.
Recycling has been a sleeper segment in green technology, but new regulations and rising resource prices has been making trash more attractive. We are, after all, swimming in the stuff. Associated Tele-Networking, which specializes in recycling telco equipment, takes in enough old 2G and 3G equipment to fill 35 long-haul trucks a month, according to ATN co-founder Creighton Bildstein. Electronic Recyclers International (ERI) takes in approximately 15 million pounds of e-waste a month and earlier opened a seventh center in North Carolina, says CEO John Shegerian, who likes to consider himself an urban miner.
China’s threat to curb rare earth minerals in 2010 prompted Mitsubishi and Toshiba, among others, to investigate techniques for harvesting them from uranium or old appliance magnets.
VCs have been plunking money into e-waste and other types of trash too. It’s not as hot as solar, but it’s doing better than water. Some companies to watch: Ostara Nutrient Technologies (sewage to fertilizer), Lehigh Technologies (rubber), MCR (old carpet), Agylix (plastic to fuel;raised $ 25 million yesterday), Bioplastech (microbes that recycle plastic), iGPS (plastic), Waste Management (King Trash, and an investor) and Autodesk (design for recyclability software and services.)
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