The Economics of Everyday Things - 78. Porta-Potties

0:03There's a moment when you're three beers and two hours deep into an outdoor concert and suddenly you realize you need to find a bathroom. As you're hustling toward that blue porta-potty in the distance, you probably aren't thinking much about how it got there. But behind every toilet, there's a guy or a gal with a dream. I don't know anybody that when they're a kid they grow up thinking I'm gonna be in the business when I grow up. That's Ron Inman.

0:34He's the vice president of Honey Bucket, a portable toilet company with operations in seven states. It's not a fireman. It's not a doctor. But when you roll up your sleeves and get into business and do it right, it's complex. Honey Bucket is one of thousands of companies in the U.S. that rents out portable toilets. Operators deploy fleets of them to construction sites, music festivals, marathons and natural disasters.

1:01They haul them up mountain tops for the Winter Olympics and lower them into gold mines 2,000 feet below the Earth's surface. It can get complicated. You have to get it there and then clean it every week perfectly top to bottom. There's trucks, there's people, there's supplies, there's parts, there's computer schedules, there's traffic. There's just so many things every day have to be done well and done right.

1:28There is a science behind everything from the number of toilets on each work site to the scent of the blue liquid inside the tank. And the job doesn't come with much glory. The folks who are using a portable toilet don't always understand the expenses that go behind it or the value of the service and the product being offered. It's not the sexiest industry to think about. For the Freakonomics Radio Network, This is the Economics of Everyday Things. I'm Zachary Crockett. Today, porta-potties. People who work in the porta-potty business know that their product is an unglamorous polyurethane box that its users dread. You've got to have a little bit of humor to be in this industry because you're going to get hit with some jokes. And you've got to be able to take those and hold your head high and keep doing what you're doing. That's Veronica Crozier.

2:29She's the executive director of the Portable Sanitation Association International, or PSAI. It's the industry's trade group. And that's Portable Toilet Association, by the way, not Portapati. Crozier prefers the more dignified term. We were founded in the early 1970s because there needed to be a place for operators to come together to have a united voice and improve the public perception of our industry.

2:58Are people surprised to learn that there's an association for portable toilets? I definitely receive a pause when acquaintances ask what it is I do. Maybe an eyebrow raise. Portable toilets first became a significant part of the American landscape during World War II when they began popping up at shipyards and on military airships. Soldiers on long flights tried to avoid them because they were often made out of plywood and difficult to clean.

3:29It wasn't until after the development of modern plastic manufacturing techniques in the 1960s that the polyethylene porta-potties we know today started to come into vogue. Crozier feels a personal connection to that history. Her grandfather was an early toilet man. He started a small portable sanitation company in rural West Virginia in the mid-1960s. He very proudly ran that company for his whole life.

3:56And shortly after I was born, my parents bought that company and started the second generation of that business. Portable toilets were a huge part of her childhood. You can imagine being a middle schooler and your kids' teachers asking, what does your family do? What do your parents do? Occasionally, my dad would come driving in in one of the big pump trucks right behind the school buses to pick me up after school. And those will be memories that I cherish forever.

4:25As the head of the PSAI, Crozier represents a fragmented industry of more than 3,600 companies worldwide. Many of those in the US, like the ones started by Crozier's grandfather, are regional and have been in the family for decades. But there are a few national businesses, too, like the private equity-backed United Site Services, which has 140 locations and is reportedly valued at more than $4 billion.

4:54All of these companies toilets are a part of the American landscape. If you start looking for it, you will see portable sanitation everywhere. So your music festivals, the Boston Marathon, you know, Big Races, Construction, and beyond that, there's large agriculture sectors, a lot of the folks working in fields and agriculture, natural disaster.

5:17relief is a huge part of portable sanitation. We have operators that are the first ones that FEMA calls, and they know exactly how to go in and be part of that first responder group to set up sanitation for those workers. Filling all of this demand can be lucrative. Upfront, a portable toilet costs between $500 and $1,000. Once owned, it can be rented out for years. And if you've got a fleet of them, they can be a steady moneymaker.

5:46Almost half of all portable toilet operators have profit margins above 20%, according to one industry survey. I would say a typical single unit getting rented for a week or so might start anywhere from $95 to $225.

6:07in that range. And that depends on how far the unit has to be transported, to be delivered, how much use you anticipate that unit getting. Though there are luxury models on the market that have porcelain sinks, chandeliers and even sound systems, most companies are renting out a nearly identical product.

6:32So your typical everyday porta potty is usually going to be made of plastic four walls, sort of a single stall cabin. They often have a white roof on top and that all goes back to, you know, keeping it cool in there. Once you get inside, oftentimes you'll see just a regular portable toilet seat that will just be open into the tank. The majority of portable toilets also come in similar color schemes. There's a lot of common colors.

7:00grays, forest greens, the tans. And those are all good because they go with a lot of different branding. If you have a lot of construction projects in suburbs, for example, they don't want a portable toilet to be the center of attention. So they're going to appreciate your sub dude colors. But at the same time, if you're doing festivals, if you're doing concerts, races, maybe you want something fun and splashy and you want that hot pink unit. Some companies like Denver based Throne Depot.

7:27use bright colors like neon orange and purple that stand out. Others attract attention with cute names, a royal flush, call ahead, duty calls, that's D-O-O-D-I-E, and honey bucket. The portable sanitation industry is put together by real characters to be good at what we do and want to do what we do. You're just a little bit unique and different. Again, That's Ron Inman, an executive with Honey Bucket. He says being different is a good way to stand out in a crowded market. But to persuade construction companies and local governments to give you their business, you need more than a clever name. You have to be nimble. Before a new construction project can get underway, developers have to submit a permit application to the local government. For Honey Bucket, those filings are leads.

8:25We have a whole fleet of people that their job is to go out and make contacts and build relationships with the customers. They're chasing building permits to try to make sure that they get the business. Every county, every state, every jurisdiction has some twist. Around 60% of Honey Bucket's business comes from the construction industry. Homebuilders, commercial contractors, and civil engineers whose building crews need portable toilets.

8:54Another 15% of their work comes from events. In the portable toilet world, there are a few highly coveted events contracts. The industry's heavy hitters provide toilets for major races, like the New York City Marathon. A company called Arroyal Flush has been their port-a-potty vendor for years. Or there's the contract for a major multi-day festival like Burning Man in Nevada. That's a United Site Services client.

9:23And then there's the holy grail, the Olympics. A U.S. Olympic Games might be the single largest payday a portable toilet company can get. They're also a great way to attract publicity. In 2000, a couple years before Salt Lake City hosted the Winter Olympics, Honey Bucket banded together with a few other companies to put in a bid for the job. It involved 2600 toilets, a $3 million budget, and a lot of problem solving.

10:2213 or 14 different venues. Nobody'd ever seen it or heard of it before, but we got it done. Whether a portable toilet is located on an urban construction site or at the top of a mountain, getting it there is only a small part of the job. The real work is in keeping it clean. That's coming up. Once the portable toilet company lands a contract, the real work begins. First, they have to decide how many toilets to send to an event or construction site. For events, there's a formula. A typical portable toilet can accommodate about 50 people every hour. The Trade Association puts out a chart that estimates the number of toilets needed based on the crowd size and the length of the event. If you assume an even gender split, a two-hour event with a crowd of 500 people only needs four toilets on site.

11:20A four-hour event with 60,000 attendees needs about 311 toilets. The calculations get a little more complicated when an event involves copious amounts of alcohol. In that case, an operator like Ron Inman has to call in the reserves. If you have a three-day festival that's built around micro breweries and there's nothing but beer, beer, beer, beer everywhere, you're going to need a lot more portable sanitation.

11:51None of this is perfect math. And the reality is sometimes porta potty businesses get it wrong. Picture a portable toilet. Between those four plastic walls is a tank that stores all of your waste. There's only so much space in there. So if a portable toilet company miscalculates, there's too much strain on too few toilets. At some point they won't hold another drop and you never want them to get anywhere near that.

12:22There was a music concert in an open field area in Oregon, and a lot more people decided to go to this thing than they planned. And let's just say everything was at the top, almost running over before we could get there and help them with the situation. Just not pretty. This is the kind of crisis that Inman sees more often than he would like. Demand outstrips supply.

12:51and toilets overflow. When this happens, it's all hands on deck. Back at the office, he fields frantic calls from the event organizers or from team members on site. Then, Inman dispatches a truck to load up extra portable toilets and rush them over before true catastrophe strikes. It wouldn't be a stretch to say we've loaded up and showed up with 60 more portable toilets in a two-hour window.

13:20That definitely could have and did happen at least once or twice. The most critical part of the portable toilet business is the service side. Most big companies like Honeybucket offer cleaning and waste collection as a part of the rental service. And they employ full-time cleaning crews called service technicians to handle the job. So the truck driver pulls up. He's got his vacuum pump turned on.

13:46It's a flexible hose and two inches around, hooked to the truck with valves. And then on the end of it, it's got a, we call it a wand. So you open the valve and it's kind of a cool, powerful feeling that all of a sudden everything that's in the tank starts sucking up the hose and going away. There's a technique. You got to stir and vacuum and stir and vacuum all at the same time. Next.

14:14In goes that blue liquid that you often see in a freshly cleaned toilet. It's a special chemical formulation of detergents, fragrances, and dye. People in the industry just call it blue. The blue additive has fragrance in it and we use something called sit-fresh or cinnamon or a lemon. We rotate it every several months on purpose.

14:41because there's something in the industry called fragrance fatigue. So you change it up for once in a while. Veronica Crocher of the Portable Sanitation Association International says there's no shortage of exciting fragrances for operators to choose from. There's all kinds from pina colada to fresh air, pine, cinnamon is a popular one, bubblegum.

15:06If you could imagine it as a car air freshener, there's a decent chance it exists as a fragrance for a portable toilet as well. Piña Colada, I don't think I've had the pleasure of experiencing that one yet. Oh, I hope you do. It's delightful. Regardless of the chosen scent, once the blue is in the tank, water is dumped in, everything's wiped down, supplies are restocked, and the technician drives off into the sunset. That would be done within six minutes.

15:35He moves on to the next portable toilet. How often a porta potty gets cleaned can vary. There's no federal standard. PSAI recommends that toilets be cleaned once a week, and most operators follow that guidance. But more expedient cleanings are required when unplanned events happen, like when a toilet gets tipped over, either by accident or purposefully. Sometimes it's wind, sometimes a piece of equipment backs into it.

16:05Sometimes it's vandalism, probably more often than anything. It's kids having fun. But it happens more than you want. So where exactly does all this waste end up? Those trucks usually take it to a local sewer system or wastewater treatment plant. In recent years, though, portable toilet companies have been experimenting with a new cleaning method that skips the trucks altogether. The new toilets pump waste directly into holding tanks up to 200 meters away.

16:35Some companies, like the manufacturer of satellite industries, sell banks of portable toilets. These can process the waste as it comes in to limit the risk of a single toilet overflowing. A vacuum pump system lets users flush the toilets as if they were using a more permanent bathroom. These systems are especially popular at major events, like live nation concerts. For bigger events, waste from portable toilets can be considerable.

17:04The Winter Olympics, which Honeybucket worked on, generated 1.7 million gallons of portable toilet waste. And Inman says it was a battle to get Salt Lake City sewer authorities to accept all of that discharge. And so it became a kind of a state-driven political thing to encourage them to figure out how to work with us. That's just the process for handling human waste, but much stranger things than poop.

17:33ends up at the bottom of portable toilets. Crozier says there's an annual contest in the industry for the weirdest objects found at the bottom of a portable toilet. And the results usually cause a splash. I think the most recent year's winner was a collection of sex toys. And I will leave it at that. Let your imagination do the rest. Like a whole collection? There was more than one. There was more than one.

18:02So, you know, who knows how they get there. Do you get a lot of cell phones? It does happen. I actually heard, anecdotally, from a friend who works in her own portal sanitation company. She was at an event with her sister and, you know, I'm sure a lot of us have been there. You go to pull down the jeans and, you know, you feel that phone slip and, well, she didn't quite grab it in time, but she was not about to sacrifice her new iPhone.

18:30And she rolled up her sleeve and went in. For the most part, portable toilets are sort of like Las Vegas. The stuff that happens in there stays there. And when you consider our collective secrecy around bodily functions, it's not surprising that portable toilet operators struggle to talk about their jobs in polite company. When Ron Inman first started in the portable toilet business, he kept quiet about it.

18:58We go to a bar. We don't talk about work. We talk about something else because you don't lead with that. But after four decades in the industry, Inman has stopped feeling self-conscious. These days when he's out at the bar on a Friday night, I lead with it. I'm out loud and proud. For the economics of everyday things, I'm Zachary Crockett. This episode was produced by Michael Waters and Sarah Lilly and mixed by Jeremy Johnston.

19:36from Daniel Moritz Rapson, and thanks to listeners Patrick Fiorini, Evan Wilson, Sean O'Farrell, Ian Ingram, and Tanner Lichti, all of whom suggested this topic. A lot of Toilet fans out there, I guess. All right, until next time. Have you gotten used to the smell of portable toilets? I have. You know, it's not what I want my home to be smelling like, but hopefully folks say, oh, smells like pina colada in here. The Freakonomics Radio Network.

20:16the hidden side of everything.