Five bottles for a bus ride - What Surabaya’s scheme actually earns, and why the maths doesn’t work in other locations

Every few months a photo of the Suroboyo Bus does a lap of LinkedIn. Passengers boarding with bags of empty plastic bottles, paying their fare in waste.

It is a genuinely good idea and the coverage is uniformly warm.

It is also almost always reported without a single number in it. This is where this article comes in...the economics turn out to be considerably more interesting than the story.

How it works

Surabaya, Indonesia’s second city, launched the Suroboyo Bus in April 2018. You can pay with an e-money card, or you can pay in plastic: three 1.5-litre bottles, five 600ml bottles, ten 300ml bottles, or ten plastic cups buys a two-hour ticket. Bottles must be empty, uncrushed, and stripped of their labels.

Around 60% of passengers pay in bottles. The other 40% tap a card.

What it actually earns

Below are the cold hard numbers...Between April 2018 and January 2019 the scheme collected:

• 39 tonnes of plastic

• which sold for approximately 150 million rupiah - somewhere around NZ$15,000.

For scale: by 2023 the Surabaya transport department’s allocation for the bus programme was 78 billion rupiah, roughly NZ$8 million a year.

So in short, the plastic is not funding the buses. In fact, the revenue sits in the order of a fraction of one percent of what the buses cost to run.

While it is tempting to look at this as a self-funding circular economy model - the ledger says otherwise...which is fine, because that was never the point...

Run the exchange the other way and the design becomes clear:

• The cash fare is 5,000 rupiah - about fifty New Zealand cents. Five 600ml PET bottles weigh roughly 125 grams, worth on the order of 500 rupiah as scrap. About five cents.

• The city is accepting five cents of plastic for a fifty cent ride.

• It is a 90% subsidy.

But it is a 90% subsidy that does not feel like one. The passenger is not receiving charity - they are completing a transaction. They bring something, they get something. That psychological difference is the entire product, and it is worth considerably more than the plastic.

The scheme also does waste-collection work the city would otherwise pay for, and has generated international coverage no tourism budget could buy.

Judged as a subsidised fare with a behavioural wrapper and a waste-diversion co-benefit, it is an excellent piece of policy design. Judged as a recycling business, it looks silly. Most of the coverage judges it as the second and praises it anyway.

Now bring it to Australia or New Zealand

Every Australian state and territory runs a container deposit scheme paying 10 cents a container. New Zealand has none - ours was shelved - although a member’s bill tabled in May 2026 proposes a 20 cent deposit.

Take a single bus fare of around $3.50 (a generalized number we know but go with it!!!)

• Australia at 10c - thirty-five containers per trip.

• New Zealand at a proposed 20c - around eighteen containers per trip.

• Against Surabaya’s five.

Thirty-five bottles is not a fare payment. It is a wheelie bin and a queue forming behind you. Nobody does that twice.

Reframing this problem

The Surabaya scheme creates value because those bottles have effectively no redemption value to the person holding them. Indonesia has no container deposit scheme. The bottle in your hand is worth nothing until the city decides it is worth a bus ride.

In Australia, that bottle is already worth ten cents - redeemable for actual money, at a machine probably closer to you than the bus stop. A bottles-for-fares scheme would not create value there. It would just be a worse ATM.

"A bottles-for-fares scheme only makes sense where containers have no existing redemption value. Introduce a deposit scheme and you have designed the thing out of a job."

However there is a version that could work

Rather than copying the bottle exchange...we could copy the payment rail.

Container deposit schemes already let you choose how to take your refund - cash, bank transfer, or donation to a nominated charity. There is no technical reason that list could not include your transit card.

Feed the containers into the reverse vending machine, select Opal or AT HOP, and the refund lands on the card.

What does this do:

• No new infrastructure at the bus. No driver handling waste, no dwell time penalty, no storage problem - the three things that make the Surabaya model hard to scale in a high-wage economy.

• The friction disappears. You are not counting bottles against a fare, you are topping up.

• The agency captures pre-committed farebox revenue rather than money that might be spent anywhere.

• And the story survives intact. "Recycle your way to work" is the same headline with none of the operational problems.

The key lesson

It is a small idea, and that is the point.

The reason bottles-for-fares gets shared endlessly and adopted almost nowhere is that it is a large idea with hidden operating costs.

The transferable insight is not the bottles. It is that fare payment is a behavioural lever agencies barely use, and that non-cash routes into the farebox are cheap to build and badly underexplored.

Surabaya worked out that people will change their behaviour for a fare credit that costs the city almost nothing. That lesson travels. The bottles do not.

Wishing everyone a great day, til next time.

Andrew

P.S. We have just come back from a short intensive trip to the Cook Islands for an airport ADB project - will share some of the findings next week.

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Transit Trends · Andrew Collings, KA Advisory. Read and comment on the original on LinkedIn.

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