Yes, the restaurants have a contract with a waste oil processor. The oil gets picked up and is used to make soap, cosmetics, biodiesel, or other products.

I'm not sure what the restaurant gets paid for it, probably not a lot, they may even have to pay for the service like they do for trash dumpsters. But unlike trash, the oil has a value so they probably do get paid a little bit.

They are also legally required to dispose of waste cooking oil properly. It's not toxic per se, but you can't just dump it down the drain.