The Dublin city manager has said the council would have had to double bin charges if it had continued its waste collection service.
John Tierney was speaking at a special council meeting called following an unprecedented level of complaints about the new service from the private company Greyhound.
A majority of the councillors voted in favour of a Fianna Fáil motion calling on the council to resume its waste collection service.
However councillors conceded that they have no power over waste collection and also passed a motion calling for legislation to change this.
Mr Tierney said criticism of the lack of notice and communication about the privatisation to customers was justified.
However he said the privatisation was to ensure that customers paid the lowest possible price for waste collection.
He said the council would have to find an extra €50m over the next five years if it continued the service.
He also said the upfront payment used by Greyhound was normal in the industry.
The meeting heard a large number of councillors complain about the changeover claiming that the confusion represented a failure of council management and a breakdown of trust with elected members.
A number of councillors also objected to Greyhound's claim that customer misunderstanding was the reason bins had been left uncollected on the streets.
Some councillors complained that some in areas like Donaghmede, the Liberties and the South East city still had uncollected bins and households are still waiting for information packs from Greyhound.
The Labour group's motion was also passed, which included a call for a levy on waste collection companies to cover the increased cost of street cleaning and illegal dumping.
Head of the Labour group Cllr Paddy Bourke said the changeover had been the latest in a "litany of disasters" by council management such as coping with bad weather, the floods, flood protection works in Clontarf and Priory Hall.
The Fianna Fáil group's motion included a demand for details of the privatised agreement to be revealed.
Meanwhile Assistant City Manager Seamus Lyons said there are outstanding issues concerning the redeployment of 110 waste collection staff that will probably go to the Labour Court.