Running a diesel engine off of waste oil works great, as long as there's enough waste oil. They usually seem to be talking about restaurant frying oil. A medium-size city generates enough waste frying oil for, what, a couple of dozen people to fuel their vehicles? Maybe a few hundred? That's nice for them, but what will the other 99% of the city use? Try to scale it up to fuel their vehicles too, and it'll rapidly get much more expensive and much worse for the environment than ordinary gasoline and diesel.