Street fight: food trucks v restaurants

Sarah Needleman
August 10, 2012
The Wall Street Journal

A STREET fight is brewing across the US between gourmet food-truck vendors and restaurants – not over the grub, but how it’s sold.

Under pressure to protect bricks-and-mortar restaurants from increased competition, several big cities are starting to apply the brakes on a rising tide of food-truck vendors with fully loaded kitchens.

Boston, Chicago, St. Louis and Seattle are among the cities enacting laws that restrict where food trucks can serve customers in proximity to their rivals and for how long. Some food-truck operators argue that they shouldn’t be punished for offering an innovative service, especially since many cities already allow restaurants to open up alongside one another.

“The rules are unfair,” says Amy Le, owner of Duck N Roll, a food truck in Chicago serving Asian-style cuisine that includes short ribs and mango lychee. Three weeks after she launched the business last autumn, she received a ticket from local law enforcement for doing business about 45m feet from a wine bar – 15m within the city’s limit for how close food trucks can park outside of retail food establishments.

Ms Le says she later had to spend nearly a full day in court to find out what the violation would cost her – about $US300 – and that she lost $US600 to $US700 in sales as a result.

“The 200-foot (60m) buffer prohibits me from competing,” says Ms Le, 32 years old, who also opposes a new rule requiring food trucks to install global-positioning devices so the city can track their whereabouts. “It is a free market. Let the consumers decide when and where they want to eat.”

Tom Alexander, a spokesman for the city of Chicago, says the new ordinance “is a workable compromise” that includes the addition of 60 free parking spaces in high-traffic areas for food trucks. “[It] reflects everybody’s interests,” he says.

Gourmet food-truck operators say another problem is that in many cities they are still relegated to antiquated rules intended for ice-cream, hot-dog and other traditional mobile vendors with smaller and less complex menus. New Orleans, for example, requires mobile food vendors to change locations after 45 minutes in one spot, among other restrictions.
“It’s not a feasible amount of time for this business model,” says 31-year-old Rachel Billow, who last year co-founded La Cocinita, a food truck that serves Latin American cuisine such as plantains and arepas. “It takes about a half-hour to set up.”

Ms Billow says she and her business partner, Venezuelan chef Benoit Angulo, started La Cocinita after several years of working in the restaurant industry. They invested $US50,000 in start-up costs, an amount that included $12,000 in modifications to their vehicle to satisfy the city’s fire code, she adds.

Danielle Viguerie, communications director for New Orleans City Council member Stacy Head, says the city is currently looking into adopting more progressive laws for regulating gourmet food trucks.

Truck operators say being able to stay in one spot for several hours also is important because they typically post their locations every day on their Twitter and Facebook pages. “Even if we have to move once, people are going to complain they can’t find us,” says Skip Stellhorn, who runs Pollo Fritto, a fried-chicken truck that began operating throughout the San Francisco Bay area in January.

Restaurant owners may be concerned for good reason. In Boston, there are now 38 food trucks in operation, up from 17 a year ago and about six in 2010. St Louis currently has 29 food trucks, up from 14 last year and zero in 2010. Meanwhile, inquiries about food-truck permits in Sacramento, California, now average three to four a week, compared with just one a month a year ago.

Established restaurants say the influx of food trucks is eating away at their bottom lines. “They come during our busiest hours and park in front of us,” says Camy Silva, co-owner of El Gaucho Luca’s Café in downtown Las Vegas, where legislators are considering an ordinance that would prevent food trucks from parking for more than four hours a day on a public street within 90m of a retail food establishment.

Ms Silva says she supports the proposed ordinance because she wants to protect her five-employee establishment from the food trucks, as they often undercut her in price. Her restaurant charges about $US8 for a hamburger, twice as much as the food trucks.

“We spend a lot on advertising and promotions to bring people downtown, and the food trucks benefit from that,” adds her husband and business partner, Pablo Silva.

Gavin Coleman, general manager of the Dubliner, his family’s Irish pub and restaurant in Washington, DC, says food trucks don’t just compete with him for foot traffic. They also occupy a long stretch of parking spots where his customers look to park their vehicles. And they play loud music that he fears is a disturbance to patrons who dine on his outdoor patio.

“Businesses pick locations and business models around certain peak times,” says Mr. Coleman. “Food trucks can poach that business and then pick up and leave.”

Two or three times a week, a fleet of food trucks – as many as 17 – pull up alongside a busy road about 20m from his establishment, creating a transient food court for lunch seekers, Mr Coleman says. Three years ago there were none.

Officials in Washington DC, are considering an ordinance that would restrict where food trucks can operate and require them to make arrangements for trash removal. Andrew Kline, spokesperson for the Restaurant Association Metropolitan Washington, says the trade group supports the proposal. He says restaurants in Washington pay about $60 to $70 a square foot for prime locations, while food trucks pay parking rates that equal about just $12 a square foot.

“We support anybody’s right to compete in the marketplace, but we think food trucks should do so fairly and on an even playing field,” says Mr Kline.

To be sure, not all cities have been successful at regulating food trucks. Last year, El Paso, Texas, was forced to overturn a 2009 ordinance prohibiting food trucks from doing business within 300m of retail food establishments after being sued by four local food-truck vendors.

The case also resulted in the removal of an ordinance that only allowed food trucks to do business when hailed by customers and to remain parked only for as long as customers were being served.

“Economic protectionism is not a legitimate governmental interest,” says Bert Gall, a senior attorney at the Institute for Justice, a national nonprofit law firm based in Virginia, which represented the plaintiffs.

Bruce Parsons, a spokesman for El Paso’s health department, says the case reflects the interests of the city’s growing food-truck community.

“It is a much more acceptable ordinance now to the mobile vendors,” he says. “There are lots of them. Food trucks are very popular here.”