Some of the legitimate contracts do get handed out based on political favors or bribes. This being said those contracts ensure some legal obligations for the s

Some of the legitimate contracts do get handed out based on political favors or bribes. This being said those contracts ensure some legal obligations for the service provider. Everything from providing the recycling bins, to providing service to everyone equally, to providing service consistently. And the recyclables are usually picked up by the same company pickling up the garbage. With that income gone they'd just jack up the prices for the garbage, which I assure you won't be picked up by any scavenger. You don't want your garbage or recyclables to stay on the street corner for days because the scavengers don't provide any bins, there's no money in garbage pickup, and your recyclables are too small game for them to go out of their way to pick them up. As a city you also don't want to realize one day that they just moved on to even more profitable business elsewhere while heaps of trash are popping up around town. As with anything, if it's important you want more than just best effort by someone who's anyway just piggy backing on someone else's groundwork.