Ragin’ Raccoon’s plan to overcome a distinct segment waste market: trip leases

Dive Brief:

• Ragin’ Raccoon, a Philadelphia-based startup founded in 2021, is seeking to carve out a niche in the waste industry by focusing on “white glove service” for vacation rental properties. While the company declined to share detailed financial results, it says expansion has contributed to a 500% revenue uptick in the past three months.
• The company says it currently services more than 300 properties across three markets — Philadelphia; Annapolis, Maryland; and Telluride, Colorado. Each market is served by one driver in a modified pickup truck and the company’s app can integrate with property management platforms.
• To date, Ragin’ Raccoon has raised a small amount of money from the co-founders of real estate company Rentsidual. Leaders say they likely won’t pursue venture funding and currently aim to grow organically.

Dive Insight:

The market for vacation rental properties has evolved significantly in recent years due to the advent of tech companies such as Airbnb and Vacasa. While many of these properties are serviced by municipal or private waste haulers, Ragin’ Raccoon believes there’s an opportunity to take a more targeted approach.

“We found a niche market where these big players really don’t want to go into and we hope they don’t go into,” said founder and CEO Justin Pera. “We’re not just a trash company. We’re servicing vacation rentals, we’re serving guests.”

Pera started pursuing the idea in 2021 after staying at a site through Airbnb where the property manager asked him to push the trash bins out and they were still full from the previous guests. He initially focused on bin-pushing service in Tampa, Florida, but found the concept wasn’t easily scalable. But this was not the top priority for property managers, who reported that vacation guests tend to produce waste in greater quantities or more frequently than local service could cover.

The company got its start performing on-demand or regularly scheduled pickups. Ragin’ Raccoon found this made it hard to predict revenue, given the seasonality of many vacation rental markets, and recently rolled out a new service that led to its big revenue uptick.

For a fixed monthly fee, the company now offers service any time a guest checks out. Pera said property managers prefer this recurring cost, which they can pass along to owners and guests, and it’s better for his company as well. So far, clients in Annapolis and Telluride have been most interested in the annual service, whereas Philadelphia clients tend to prefer on-demand service.

The company does not currently offer recycling service, but it could in the future. Currently, Ragin’ Raccoon sends its waste to Covanta sites for disposal where possible.

Ragin’ Raccoon says it also avoids the costs of heavy-duty collection trucks and the challenges of hiring CDL-certified drivers.

“By having that requirement just out the door it really allows us to have a larger pool of talent,” said Alex Graham, head of operations, who added the company is especially focused on drivers who can interact with guests and enter properties.

Skift, a travel news and market research site, estimates the U.S. short-term rental sector was worth nearly $57.7 billion in 2021, or 18% of the overall accommodation sector. While that share grew from 10% in 2018, Skift projected short-term rentals would see a slower growth rate than hotels in 2022. A proliferation of laws restricting short-term rentals has also affected certain markets.

Pera said the recent enactment of such a law in Philadelphia cut Ragin’ Raccoon’s local revenues by about 10%. At the same time, he pointed to certain West Coast communities that require trash collection as part of short-term rental regulations as a sign of the market’s potential. Pera also noted that Erik Tylek Kettenburg, the former chief technology officer for vacation rental companies such as Rented and Vacasa, is an advisor to the company.

Regardless of future economic trends, the company sees the potential to launch in multiple new markets at a sustainable pace. It currently waits to enter a market until at least 50 properties are lined up.

“Our approach is growing slow,” said Pera. “We do not want to rush and blitz the market and go somewhere where we do not have contracts in hand.”