<p>Waste management systems in low- middle-income countries are strained due to rapid urbanization and population growth. Inefficiencies in formal waste management systems have led to the emergence of the informal waste sector (IWS). Despite benefits like higher collection efficiency and the provision of livelihoods for workers, IWS creates exposure to occupational hazards and social discrimination. Although previous studies have researched the role of IWS workers, their occupational conditions, and barriers to formalization, there is limited research on contextualization of social dynamics in both the informal and formal waste sectors. In this study, we provide for the first time a comparison of the social and institutional hotspots in the formal and informal plastic waste management systems of Chennai, India, through interviews with stakeholders from both sectors. We show that social hotspots can be just as bad in the formal sector for waste collectors, resulting in a preference among the most vulnerable workers to remain informal. This is also in part due to power imbalances in the formal sector, which have worsened since the privatization of the solid waste management system, and in contrast, the autonomy offered by the informal system. At the institutional level, the formal system faces the barriers of lack of transparency, waste generator mistrust on the system, and lack of infrastructure, while the informal system exhibits strong barriers to data collection due to system-hiding and lack of organization. We argue that narratives around formalization must adopt a participatory approach to improve social outcomes for waste workers.</p>