Inside D.C.'s Food-Truck Wars
washingtoncitypaper.com
washingtoncitypaper.com
There's an obvious legitimate concern here, and it may help if you switch the role of the underdog and the establishment to understand it. If guerilla chefs can set up trucks, so can Starbucks[1]. How would we feel about Starbucks launching a fleet of cafe trucks and parking them right near independent coffee houses?
It's these kinds of tensions between the local optima that the market seeks and the long-term welfare of communities that makes me not a libertarian. The food trucks are awesome. I want more of them. But I don't want every neighborhood restaurant in the South Loop replaced by Potbelly's, Jimmy Johns, and Dunkin' Donuts, which is exactly what will happen if food trucks make the margins on brick-and-mortar restaurants untenable for independent operators.
Chicago apparently has a provision that allows food trucks only within a certain distance of a brick-and-mortar restaurant. It's a clumsy start. It looks like there's no black-and-white answer... which is why we have a city council, I guess; that, and to prevent us from eating foie gras.[2]
[1] When I left Ann Arbor, Zingermans[3] ran a cafe truck out of a strip mall parking lot, and it was spectacularly awesome; I can't wait for the dawn of the cafe trucks in Chicago.
[2] Our city council famously banned foie gras, because force-feeding ducks is an outrage, unlike battery farming Purdue chickens.
[3] Which is awesome[1], go there, worth a detour to A2.
I've spent a lot of time in China, India and Brazil -- everywhere you go there are street vendors -- all run by small business owners. When McDonald's and KFC go overseas they are usually considered a luxury item.
The problem is that corporate food has nothing to do with food. In the gilded age the entire industry has been based on selling "experiences" -- that's how you maximize revenue. But when the economy contracts people suddenly care about the FOOD again -- suddenly people are unwilling to pay an extra $2 for "Starbucks experience." My guess is that this is a long term trend.
Here is one thing you CAN be sure of. When a corporation says "jump" the politicians say "how high" -- and right now corporate food wants MORE regulation in order to protect their revenue stream.
The point is not that we know that they will. The point is that once a profitable niche exists it will eventually be filled. Whether some existing restaurant chain starts putting a truck on every corner, or whether one of the current truck entrepreneurs grows to be so big that he can afford to put a truck on every corner, if food trucks aren't regulated they will eventually be annoyingly prevalent.
It's independent restaurants that are starting food trucks and it's CORPORATE interests that are colluding with local government to stop the threat -- precisely because they know they CAN'T compete with the decentralized system of street vendors.
No, they're objecting because they have a huge investment in the current way of doing things. It doesn't mean they can't switch to a new way of doing things if they have to.
Speculate much? Food trucks and restaurants offer substantially different products (restaurant = food truck + service + cozy environment). Of course food trucks would put competitive pressure on restaurants (which would lower prices, to the benefit of consumers), but why would they totally wipe them out? Would consumers switch wholesale to food trucks? Of course not. More likely, a handful of weaker, low-end restaurants lose out and close, funneling their customer bases to the fewer remaining restaurants.
But if they did, why would be go about saving them? Where's your evidence that a few brick & mortar restaurants is better for society than multiple food trucks + a park?
An awful lot of American downtown areas already have too many shuttered shops and too few parking spaces. Driving business out from commercial real estate and into public space will only exacerbate that trend. And if you're proposing knocking down all those restaurants to build parks that people can sit in while they eat their foie gras hamburgers, who is going to pay for that? It's a massive transfer of wealth from the pockets of the city and the owners of commercial real estate (whose value plummets before their buildings get bought by the city and knocked down) to a bunch of dudes with vans.
I'd like to ban bikes which are not sold by specialty bike shops, because I'm worried that competition from walmart (and their $35 bikes) might put Trek and my local bike shop out of business. How do the people who don't want to spend $300 on a bike feel about this? Screw them, their desires are irrelevant.
And don't get me started on automobiles! I don't want every neighborhood buggy whip maker replaced by a Ford dealership, which is exactly what would happen if automobiles make the margins on buggy whip manufacturers untenable.
In this case, we're not talking about "old" vs. "new"; we're talking about one group of merchants who rent retail space and pay taxes, and another group which does neither, offers a substitutable good, and uses public space to do it.
Like I said, I like the food trucks, but the city is already pricing out independent restaurant operators without effectively subsidizing another class of competitors.
As for the new rationalizations you came up with in this post, I agree with you. We should charge market rates for parking, both for food trucks and for commuters. Food trucks should (and do) pay sales tax and property tax on their vehicles. And we should charge them based on externalities they create (e.g., crowds, litter).
The fact that they don't pay property tax on land is irrelevant - they don't own land. Similarly, taxi drivers don't pay the Stable Tax or Horse Food Tax (assuming such taxes existed in the days of horse drawn carriages). Why should they pay taxes on such goods?
I'm all in favor of properly regulating food trucks. But I'm not in favor of protectionism, which is what you were advocating.
What I am saying is that I think this is an interesting example of how political absolutes fail. If you're going to zone for retail activity, then the word for "transient retail businesses" isn't "efficient", it's "unlawful". Maybe we shouldn't zone? There are predictable (but maybe acceptable) poor outcomes from that move too.
So what's interesting to me is that the only reasonable way forward is to balance interests, devise policies, and iterate over time; in other words, the community has to shape the development of the market, not just the invisible hand.
There are Twitter feeds that help customers find the food trucks, but there's still room for improvement in getting that information to the right people at the right time, easily.
As long as people know where they are, the food trucks can park out of the way and still get a lot of customers.
If anybody writes an android/iphone app that helps me find trucks with quality food, that are sitting on a side road, I'll use it ;)
I'm sure somebody is already doing this.
You could go so far as to allow the menu to be customized the night before. Maybe the truck operators could move on a great deal on beef because they have all the orders paid for in advance.
Another idea for an app would be a real time inventory that could run against a fleet of trucks so that new inventory could be dispatched to try and catch more of the unexpected lunch rushes.
In the first instance they've picked 17 sites with the explicit purpose of avoiding the kind of conflict described in the article - so they tend to be in front of office buildings etc. The process of handing out licenses for these sites by lottery initially produced some odd results but this seems to be sorting itself out in the wash - and we're starting to see some success stories.
It'll be interesting to see how the scheme can be expanded while still avoiding conflict - I think we may have a case of Portland-envy and won't stop until we can say Vancouver's scene is as vibrant as Portland's.
The whole area of BIAs and how well they represent the interests of local businesses is somewhat interesting to me right now, as it appears that BIAs are a primary force in opposing any kind of change in the city especially those that affect parking and car usage. Like, for example, better bike lanes.
If you believe people underpay for parking, I agree with you. Everyone who parks a car is free-riding, and food-trucks are free-riding to the exact same extent as a guy who commutes to work. But if that's the problem, why not just charge market rates for parking?
That still leaves property values as an issue.
But that's not tptacek's objection - his objection is that many people will prefer Starbucks Truck to Intelligentsia, which might cause Intelligentsia to go out of business. This would deprive him of the coffee he desires, and he is willing to deprive everyone else of the coffee they desire to protect his preferred coffee.
It's true - food-sellers have conspired with local governments to create an artificial scarcity and exploit it for their own benefit. This benefits city governments and food-sellers at the expense of the public. The food trucks are benefiting from the higher prices and reduced competition created by this situation. Similarly, Mexico free-rides off of high oil prices created (in part) by collusion among OPEC members.
As a consumer who purchases food, why should I care? They are not free-riding off me or other consumers. They are free-riding off rent seekers who are trying pick my pocket.
If the brick&mortars destroy themselves with an anti-competitive situation they sought to benefit from, that's just delicious irony.
And how would they be free-riding off our tax dollars? If that is the root cause here, then maybe the food truck owners should pay more taxes, which I doubt that it is.
Any established industry has a vested interest in keeping status quo. They don't want someone to come in and shake things up, because that means they might have to actually compete.
I think it's a great development to let people who have limited capital get started. It's a nice way to test the market for what you're serving too. I have a few friends who are considering trying to get a food truck business going.