John Morris: Yeah. That’s a good point, Michael. I mean, it takes that — that’s sort of a leading indicator of what we can expect from safety, but there’s a clear distinction between somebody who’s tenured in the seat and somebody who’s not and that’s not a critique of folks who are new in the seat. It’s just a matter of having that experience and we do see a pretty wide spread between those who are tenured in operating a vehicle and those who are not. So as we continue to hold that number down, we expect the safety results to continue to improve as well.
Jim Fish: By the way, Michael, most — as we’ve said before, but the most important metric in this move from rear load to ASL is a safety metric. It’s not a financial metric. Financials obviously are better, but it’s a safety metric. And so as we continue to take a person from the back of the truck, which is the most dangerous place, honestly, in our entire operation behind the truck, as we continue to move that person inside the cab, that will benefit us significantly.
Michael Hoffman: Yeah. And the last one for me, one of the powers of the roll-off business is that when it does slow, you park equipment, reposition drivers and raise prices. Is there anything different in this cycle?
John Morris: No.
Jim Fish: No.
John Morris: Michael, I think you said it well. I mean, that’s something we’ve been very focused on. Some of the technologies we’ve implemented over the last handful of quarters are really starting to show benefits is really around capacity planning and making sure that we can see around the corner, using, frankly, data and analytics that we didn’t use a handful of years ago to be very predictive with a very small deviation between what history would tell us we need to plan for and what we actually plan for and we’re still getting better at that.
Jim Fish: But we might see a revenue hit per volume, but you might not see much, if anything, in EBITDA because you’d make those adjustments so quickly. That’s part of the point.
John Morris: We talked about the volume being down for the quarter, Michael, but I think the revenue was off about $7 million. So when you look at the amount of volume versus what we got from a revenue quality standpoint, from a margin standpoint, from that perspective, it was a good trade-off.
Michael Hoffman: Great. All right. Thanks.
Jim Fish: Thank you.
Operator: Please stand by for our next question. Our next question comes from the line of Stephanie Moore with Jefferies. Your line is open.
Stephanie Moore: Hi. Good morning. Thank you.
Jim Fish: Good morning.
Devina Rankin: Good morning.
Stephanie Moore: I wanted to maybe circle back on the automation opportunity within residential. Apologize if I missed it, but where are we left in terms of automating some of those routes, automated sidearms and the like? What has been complete? What is left to do? And then I think you did mention the opportunity for greater automation on the commercial side as well. So maybe if you could just expand on that opportunity and the timeline of starting to really kind of accelerate those efforts? Thank you.
John Morris: I did comment briefly on that. We’ve taken about 800 rear-load trucks out of the fleet and about 650 rear-load routes since we really started earnestly pursuing this in early Q2. We’ve got roughly another 350 to 400 routes we have targeted this year. And I say 350 to 400 because it has to do with some truck deliveries. And that probably, when we get done in 2024, that probably puts us in about the sixth inning. If you want to continue with the baseball analogy, we’ve still got some room to go there. So hopefully that clarifies that.
Jim Fish: And the commercial?
John Morris: Oh! Commercial. I think on the commercial side where we continue to see benefit is really driving efficiency, and Jim commented on it. We’ve got some more sophisticated, frankly, tools to help us route our vehicles. And in some cases, the dynamic element is where we think, although it’s less in commercial than roll-off, there is a dynamic element to commercial and our ability to real-time route that and to route around real-time traffic is another capability that we are just putting in the system now.
Stephanie Moore: Got it. And then just to maybe touch on the labor aspect. So clearly seeing an incredible improvement in labor. You called out turnover. So, I guess, if we could kind of break out the components, clearly turnover is at a significantly higher level. Are you seeing actual labor costs come down? Is the average employee being more productive because you’re seeing more tenure? If you could just kind of maybe explain what we’re seeing on the labor side or even back — or is there a deflationary element of this as well? Thanks.
Devina Rankin: Yeah. That’s a great question. And I would tell you, in terms of the inflationary cost pressure on wages, we have seen that soften. We’re currently at about 5% wage inflation for our driver population and that’s certainly down from low-double digits at its peak. And so that’s the labor component that’s associated with inflation. The other pieces, John really talked about them, whether it’s the route optimization work, efficiency, driver and technician retention, improved turnover. And then truck deliveries helps on that front too, because ultimately that is their office and they feel appreciated and like they have the assets that they need in order to serve the customer. And so we’re seeing help in each of those aspects of the business. I think that the widening impact in terms of margin expansion from labor in the operating expense category is most significant on the efficiency front, but certainly helps on the improved inflation headwind.
Stephanie Moore: Got it. Thank you so much.
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Tobey Sommer with Truist. Your line is open.
Jack Wilson: Yeah. Good morning. This is Jack Wilson on for Tobey. Can you maybe speak to sort of the other benefits of the recycling facility upgrades, other than sort of the potential to remove some positions and is that capacity-based or is that some efficiency gains we’ll be seeing?
