Throughout CA and across the US it is very common to offer a separate service for solid waste and organic waste. Certain areas/haulers have been collecting and processing food waste for decades, but the vast majority aren't yet.
I completely agree about the need to update the health code to allow for more efficient resource management. A minor change could dramatically impact the annual resource consumption of the hauling industry.
Also, YES!! hybrid garbage trucks are certainly on the horizon and will have massive positive impact. Waste Management (wm.com) was working on them at one point around 10 years ago. Now there are several companies working on them.
Related to this, I'm working on software that increases the efficiency/density of collection routes as customers subscribe. I feel that the vast majority of waste haulers have allowed their routes to become inefficient and through applying a layer of software/logic at the subscription point we can help them be more profitable and more efficient.