Senegal's text-message auction undercut Dakar's septic-vacuum cartel — prices fell 7%

In Dakar, a septic tank gets emptied two ways: a "baay pelle" — father of the shovel — scoops the waste into the street, or a vacuum-truck cartel ("toilet suckers") charges $40–60 a job, roughly twice the shovel price and about a month's wages. NPR's Goats and Soda and Planet Money reported in July 2018 that the drivers, though separate businesses, had agreed as an association not to compete; a customer who got one quote at the parking lot behind Dakar's national stadium could not ask the others.

The government of Senegal called in economist Molly Lipscomb of the University of Virginia, who brought a team from the non-profit Innovations for Poverty Action. They set up a call center: a customer with an overflowing tank called one number, the job offer was texted to about a dozen drivers, and the cheapest bid won the work. Researcher Josh Deutschmann said truckers at first sent back "outrageous prices", but then started watching which price won in a neighborhood and undercutting it weeks later.

Lipscomb's numbers showed prices for toilet suckers down an average of 7 percent, varying by neighborhood. Truckers earned less per job but got more work as more households chose the cleaner option. Driver Cheikh Gueye told NPR: "Even though we used to be united — but now it's a competition. And you need to work hard in order to get something in your business."

Run septic emptying as a text-message reverse auction: one phone call broadcasts the job to a dozen truck drivers, and the lowest bid wins.

The cartel's power came from geography: all the drivers idled at one parking lot, so a customer who received one quote had no way to comparison-shop.

Every trucker already carried a cellphone, so an SMS auction needed no new hardware from the government or the drivers.

Real-time visibility of winning bids let each driver defect from the fixed price individually, without anyone breaking ranks face-to-face in the association.

Ads told households with overflowing pits that the service existed, reaching customers who would never have come to the parking lot to negotiate.

Cartels hold while buyers face one quote at a time. A cheap channel that turns every job into a visible auction restores competition — incumbents earn less per job but keep the work.

The experimental call center was being taken over by a private company, with the goal of expanding the service to all of Dakar to undercut the cartel. The story ran on NPR's Goats and Soda and as Planet Money Episode 855, "The Poop Cartel", in July 2018.