* I think that they'd quickly find out that skipping every other house on the block because they aren't a customer isn't very cost-effective, instead.*

I don't understand why. This is exactly how trash pickup in my area works: there are multiple companies and they only pickup for their own customers. To add insult to injury, I live in a very low-density rural county. Since these guys have been in business for years, I have to assume they're profitable!