The Food-Truck Business Stinks
nytimes.com
nytimes.com
The idea of a "food truck" is based on trying to cheat the system. The system is: you have to buy or rent property in order to locate a business there. However, the system has a loophole: large swathes of the city are designated as roads, sidewalks, highways (which is a technical term for the road allowance). These areas of the city are completely free to use, for anyone, on the condition that it's a short-term, passing-through, sort of use.
So Mr. Brilliant says, "Hey! What if I just take over part of this free-to-use area without paying? I'll be able to charge as much as a property-leasing restaurant, but I'll get my land for free! I'll make a killing!"
Except the city has self-defense measures against people who try to do that. They're called tow trucks and bylaw inspectors. Because your business model is not actually innovative or new but has been around since the dawn of cities.
And so the white blood cells of the city harass the invading parasites that are trying to damage the city's ability to function, and life goes on, evermore and without end.
As for using parking spots to serve food, what do you believe creates a greater consumer surplus? A single commuter parking their car for the day or a food truck servicing hundreds of consumers?
Also, why do you believe the city will cease to function if consumers have more options for lunch?
So, saying that only the generator is running isn't a very effective way to argue that these trucks are low-polluting.
Most trucks cook with gas, and it would be crazy to idle their main engine. If they need power they use a portable generator.
Having just returned from a week in Portland, I can personally vouch for the amazing diversity and quality of the food truck scene and what it's done for the city and people.
Price? All over the map, from $2 tacos to $6 noodle plates. The best part is that you can literally try a different one each day.
Finally, I know that you are not a racist, but that thing you said about parasites invading was pretty fucking racist. Immigrant entrepreneurs should be encouraged, food trucks are an excellent way to do that, and we get to enjoy amazing food. Portland's restaurant scene is thriving as ever, unless it's Subway you feel sorry for. Heck, many of the best restaurants (Pok Pok) started as a food truck.
1) Cheap(er) proof of concepts. Why open a big restaurant that can cost an insane amount of money and (likely) fail? Try out that niche food option and see where it goes, if you need to pivot it's not going to bankrupt you.
2) The American Dream. You can start something with passion and little capital and become fairly successful.
3) We all win because we get great food options.
4) Low overhead if you run it yourself and/or with your family. No need to deal with employees and the accounting that comes with them.
5) Flexibility. A great Thai food cart up near Portland State (Thai Pasta) was closed for a month due to a family trip to Thailand. Try doing that with a brick-and-mortar restaurant.
I think you might have read too much into that; sounds like they were calling the food trucks themselves invading parasites.
Its just like you likened Indian/Chinese restaurants to "parasites invading"
Yes the term is racist in this case
That might be the stupidest comment I've encountered this week. You think my analogy which compared the city defending its thoroughfares against food truck blockages with a body's immune system defending its blood vessels is.... racist? You think white blood cells are racist blood cells?
HN quality of discourse (and reading comprehension) is not great nowadays.
Calling food trucks "parasites", rather than a more data-driven, less passionate, and more economically aware comment is not moving the average quality of commentary on the site in the right direction, if I may say so.
Thanks for playing the blind accusation game though. You get an A for effort.
Is it racist to notice an industry is almost entirely made up of immigrants?
Since buying/leasing a physical location is such a costly and risky venture, these trucks have been a great way for budding restaurateurs to get their feet in the door; see what works, what doesn't and perhaps eventually open a physical location. People get experience doing something they love and building a business, people get fed with interesting food that would be prohibitively expensive or otherwise difficult to discover (due to culinary fusion or other reasons), and the city gets tax revenue.
Win/Win in my book.
The vast majority of street food is run by immigrants, and it's a perfect entry point for them to get into the local economy they have chosen to make their home in.
People who were born here are smart to use the food truck as a way to test a concept before they try it in a restaurant format. Perhaps we'll see that happening more and more. There's certainly all cultures represented in Portland.
Meanwhile, we're all immigrants here unless you come from native background. I don't think the original commenter is a racist person, but his comment comparing food trucks to parasites is uncomfortable at best and shameful at worst.
Here's a test: go ask 100 food truck operators if they think some guy on a tech forum calling food trucks "parasites" is racist, and get back to us.
My experience with food trucks (in San Francisco and Austin) is that the trucks actually improve the city's ability to function, by providing competition to restaurants and better food options to office workers.
Hell, in San Francisco the trucks are so good that they even have an event ("Off the Grid") where all the trucks come together with some live music and it's always packed http://offthegridsf.com/wp-content/themes/otg-2012/images/Of...
You're making it sound as though food trucks stop in the middle of the road to sell their stuff. In fact they use designated parking where it would be completely legal to keep the vehicle for the same duration otherwise. Also, the business model of selling from a truck isn't going against some core concept of land ownership or something (witness ice cream trucks, which have operated with little friction for 80 years or so). The problem is with the "system" defending entrenched interests against innovation and using BS regulations (see the article) to do so.
But the tunes bring "attention-getting" to another plane. "Jingle Bells" in July? That's when you know the person who picked the songs needs a bit more instruction in American culture or they work for a large retailer.
This is where you begged the question.
regardless
Edit: This one too.
And the entrenched interests always use the excuse that they're "protecting" someone or another from something legitimately unwanted (contaminated food, unwanted idling truck engines) in order to defend the status quo wholesale, rather than, say, trying to improve the status quo in a manner which also avoids those potential issues...
If a food truck can outbid people who want to park, then the city's economy needs food trucks more than parking spots.
It would be difficult to justify a demand system since day passes for parking meters are sold for things like moving trucks well ahead of time (how do you price something on a random Tuesday two weeks ahead of time?). However, the day parking passes are quite expensive (~$200 for 4 spots all day), so I'm not sure that even at peak demand, the city would make more than that in meter fees.
I don't disagree with that in a location like NY where parking is in very limited supply.
Frankly, you should be ashamed to post such entrepreneur-hostile crap on HN.
Food is a high-risk, low-margin business with enormous capacity for differentiation. Because the choices are highly nonlinear, a great deal of experimentation is necessary and useful.
So allowing entrepreneurs to de-risk some of that is extremely positive for the greater good.
Also, the trucks mostly target the office lunch crowd, not tourists.
I think if cities mark certain areas as "food trucks allowed" it really improves the quality of life for downtown office workers.
I disagree with this. The failure rate for restaurants is extraordinarily high. Competition for market share is high. That's incentive to innovate and deliver a good product, especially in dense cities like New York.
I think why food trucks are able to innovate as much as they can is not because of their lack of monopoly but rather their lack of overhead. It's easy to try out concepts, see if they stick, and iterate as necessary. You can't do that in a traditional restaurant where you have lots of staff, rent, utilities, a larger menu, and furnishings/decorations.
I definitely agree that allowing for food trucks improves quality of life for those with access to them, but I'm not willing to attribute their success to breaking up restaurant monopolies.
I think increasing the supply of "prepared food selling space" should give low-end stationary restaurants more leverage in their rent negotiations.
High end restaurants and food trucks do not compete, so it isn't a big deal for them.
But I'm sure you'd still agree that food trucks disrupt existing interests (whether you use the word "monopoly" or not) and that on the whole this is probably a positive thing.
We have "food truck tuesday" about 5 minutes from where I work on a sleepy side road. Three problems:
1) No variety. "I saw the Korean BBQ truck did great on the food network show, lets open one". Times 5 entrepreneurs. Whoops. The brick and mortar restaurants have MUCH better selection. Suddenly you have 5 Korean BBQ trucks on the street sometimes 2 or 3 of them in a row. This also feeds into a narrowcasting disaster of focusing ever more tightly on a ever smaller fraction of the population trying to obtain a very small local maxima of profit.
2) Cost is insane, locally. The cost of a truck is basically fixed nationwide by the auto dealers etc. The cost of rent varies by a factor of 10 maybe 20 across the country. So whats "cheap" in NYC or SV, relatively, is extortionate, relatively... pretty much anywhere else. Entrepreneur sees the food network TV show and they charged $20 for a sandwich in NYC and had lines down the road. Hmm lets try the same $20 in Milwaukee. Whoops the local brick and mortar charge $5 not $25 for a sandwich so that's not going to work. There is the business model option of selling to drunk people who can't rationally evaluate prices but its hard to make all your money at 2am off of drunks.
3) I have to walk past numerous brick and mortar restaurants with wider selection and cheaper prices to get to the trucks that have a narrower selection and higher prices.
The initial idea of a truck was taking food out to some distant underserved industrial area and sell sandwiches at a premium to hungry coal miners or whatever. This doesn't work long term in a rich urban area with a wide selection and heavy competition, other than as a fad. Right up there with cupcake shops.
The "food truck street" is also highly unpopular with the trucks because of intense competition. OK 25% of all trucks will be Korean BBQ because it was on TV. Fine. Across a city that works. All of them lined up on one street means almost all of them go out of business.
A final problem is weather. There are parts of CA where the weather is perfect all the time and everyone is always outside. That is not the case where I live. If I cared, I would have moved a long time ago. The problem is centralizing a foot traffic oriented business in a town where the weather is not foot traffic compatible perhaps 75% of the time. Across the street in a downpour or 10 degrees or 110 degrees works for me. Not a long walk away past 10 other trucks.
So generally speaking, no, formally govt supported "food truck Tuesday" down the road from me, has not been much of a success. Its possible the restaurant establishment has permitted the politicians to support the concept only because they know its a fad and in the long run doomed, in this town, so they don't need the cops to beat them down like in NYC.
1) On any given day in SF and LA: I have a choice in a single location of: sushi, indian, indian fusion, japanese fushion, Mexican, Korean tacos, Pizza, Cajun food, salads, and a deli. The fight in Raleigh seemed to the locals to be more about the food trucks out competing on quality. Most of the restaurant owners that had shitty food had the most to say, with the higher quality restaurants not giving a damn.
2) Cost even in LA and SF will seldom rise above $10 unless you get an entree and an "appetizer" at which point it hovers around $14. Usually the appetizers are enough for a whole meal.
3) Agreed, there are a lot of instances where the prices are the same as a brick and mortar.
I think Roy Choi is great, and is most the reason for the Korean explosion in food trucks, however he only seems to have 2 real competitors at the locations I frequent. The rest as you suggest have either gone out of business or changed to another cuisine which is more lucrative.
They ultimately approved a new regulation that, while probably not perfect, seems to be a compromise most sides could live with.
http://www.raleighnc.gov/home/content/Inspections/Articles/F...
and am unsure how it ultimately turned out in terms of variety.
Not sure about that bit. I live "next door" to Raleigh in Chapel Hill, but rarely have much reason to venture into Raleigh during the day, so I haven't had much chance to partake of their food trucks. But the Triangle, as a whole, seems to have a thriving food-truck scene.
http://www.crankydiners.com/food-trucks/
http://www.wral.com/triangle-food-truck-rodeos-planned-this-...
I believe a lot of fads and prices are driven by the food network food truck series.
That doesn't necessarily have anything to do with customers. That's just the normal trajectory of small businesses.
Also .gov sponsored food truck alley is located between two office buildings. They'll likely never totally starve, but they'll never be a huge hit. Like subsistence farming, but selling lunch.
I often walk around town at lunch and in the winter very few trucks show up. I don't know if that implies they outright close, or migrate, do they re-open in spring or new owners every spring?
Same sandwich from a corner deli (cheapest brick and mortar place that you will find a sandwich) is $5-$8. The competitive advantage that corner shops have is that they will, if they are clever enough to make themselves a "restaurant", sell beer.
Lunch trucks are not "cheap for NYC of SV", they are just cheap.
Furthermore, lunchtrucks do great business in Philadelphia during the brutally hot summers and icy winters because they are cleaver enough to part places where where they are the option that involves the lease amount of time walking outside.
Have you ever thought about it from the other side? Maybe these people want to open up a real restaurant but can't due to draconian laws? This is their way of disrupting it.
"every mobile-food employee has Health Department certification. The trouble is that he needs to employ four people, each with his own license; if one quits, it can take two months for a new worker to get the proper paperwork."
"And stationary restaurants, by the way, require that only a single employee on duty have a Health Department certification."
Uber.
They essentially roll-in a mobile grocery store that idles on public streets while making it's deliveries. As others have said: food carts have been posted up all around the city for decades. It's really the new players, such as Fresh Direct, who are gaming the system in a meaningful way.
At the very end, the author barely mentions that Portland has a fully thriving food truck scene. Same thing here in Austin. There really are "four Wafels & Dinges trucks for every hot-dog cart." It can be done.
I'm in a different situation because my truck is more of a hobby than a job, but I do want it to pay for itself. As such we focus more on festivals, special events, and catering. Even then we are running into some regulation issues.
We are fortunate enough to live and work in a city that is willing to work with us and understands the issues we face. It isn't that the law is bias against food trucks, but that it without considering mobile food vending and because of that is overly restrictive. For example if a local business ask us to come park in their parking lot and serve or sell food to their customers we have to get a special permit per location. And we are limited to the number of permits we can get per year and need to know the exact dates, times, and locations before applying. We get new request every week so there is no way for us to know in advance where we will be for the rest of the year.
But just like any other business understanding and navigating the laws and regulations is part of the job. To be successful you need to plan and adapt accordingly.
(Except corrupt businesses which thrive on the current system and will lobby against productive change.)
You need to re-read the article: the core theme is that there isn't a monolithic “we” requesting regulation but rather that the regulatory framework most of the public wants to assure safety, pollution, etc. has been captured by a smaller group of industry incumbents who are using it to prevent competition.
If you want a food truck you should go out to a city with friendlier regulations and where you would provide more novelty by being a more unique thing. Then again I'm not a big fan of these new wave food trucks anyways, they are always supremely overpriced. If I'm eating out of a truck, it's because I want to pay less than sitting at a restaurant.
Disagree heavily. If I'm eating out of a truck it's a demonstration of the complete failure of local brick and mortar businesses.
What, do people really think I like standing in line baking in the hot summer sun for 20 minutes so I can have a decent lunch?
Around where I work, if you subtract the food trucks you have crappy delis and greasy steam table places. I gladly pay brick and mortar prices (and more!) for good quality food, and the food trucks are the only ones willing to deliver the product.
There's nothing about "comes from a truck" that makes food inherently worth less. The food I get from food trucks is almost always far better than equivalently-priced choices from brick and mortar shops in the area.
The beauty of it is that when I worked in SF the flood of food trucks seemed to get restaurants in the area to up their game. In this case the food trucks improved the landscape for consumers across the board, and injected much needed competition where there was none before.
Of course there is. When you sit down at a B&M restaurant, you are renting space from them. You get a table to sit and eat for as long as you want. They provide you with non-plastic silverware and linens that they later have to wash. Air conditioning. Lighting. Waiters. Bus boys. The restaurant has to factor this into their prices, a food truck does not.
Given that comment, my assumption would be that you haven't eaten at many food trucks in NYC. The food at some is downright delicious, while others it is crap. If I'm eating at a truck, it's because either (a) I need something super fast and the truck is closest/fastest, or (b) I like what the truck sells, or (c) I like the idea of portability and I don't want the only other portable options, or (d) the smell of the grill attracted me, or (e) etc... None of that equates to paying more/less than I should anywhere else.
Personally I don't care that the trucks emit smells, but if they're injecting so much smoke into the atmosphere that I can barely see, that's no longer cool.
New York City doesn't really have surface parking lots anywhere with a lot of foot traffic, so that isn't really an applicable solution here.
What could be interesting is if a privately owned parking lot did something like this.
E.G.: https://maps.google.com/maps?q=food+truck+pod&hl=en&...
If you introduce a technological fix, they'll merely pay the politicians to order the police to enforce random and conflicting cleanliness regulations or something like that.
The way to "fix" the problem is to organize a PAC and lobby politicians and donate an amount of money to re-election campaigns similar to what the brick and mortar group donates.
The problem is not even brick and mortar restaurants, 90% of them fail in a couple years, the REAL competition is restaurant supply houses and such who specialize in converting home equity loans into broken dreams. The food trucks are supposed to spend money at the supplyco renting tables and chairs, not buying a Ford Truck or whatever. The "real" permanent solution to the "feud" is to align goals, legislate that brick and mortar restaurants AND food trucks get all their "stuff" from the same suppliers, including tires or whatever. Or you can only rent food trucks, coincidentally from the same rich guys who own all the land restaurants also rent. Something like that.
Instead of the huge annoying trucks, I prefer to see that smaller carts which in most cases can serve the same food as the trucks. I would like to see higher quality food on the carts (and the trucks). Fruit stands in NYC are really nice as well...
In some areas the food trucks form synergistic relationships with bricks and mortars; a local brewery that doesn't serve its own food, hosts them every night and the entire area around it has become "The Spot" with 4 new businesses opening in the last year.
Having moved here from New York, I'm familiar with the situation there as well. There aren't as many swaths of urban "blight", and there is already a good amount of foot traffic so the benefits don't feel quite as dramatic -- but then I didn't work in midtown (where the food offerings are so so bad).
We're seeing the same thing in Seattle, as well. Some of my new favorite restaurants started life as food trucks and have moved up to more traditional quarters.
And because the total dollar amounts are a lot lower than a proper restaurant, people can embark on it with just savings and home equity loans and friend investors... all of which do not require a realistic business plan. Then the sales don't materialize, they lose money every day they are out their busting their ass for 17 hours and throwing away food at the end of the day, and they end up selling the truck to the next food truck dreamer.
The free market may have made America great, but a pretty good summary of our current problems is we're now trying the reverse of both in as many business fields as possible. There are numerous eCommerce analogies, etc.
It has to be the business case stinks. I can't see the regulation getting in the way, any more than other businesses.
1) The requirement of a food handling license for every employee is not a trivial problem. It completely distorts the market for hiring, really making it almost impossible to do legally. Remember, this is not the kind of job where people stick around for years so a 2 month lead process in hiring is tolerable. And it's not like this food handling license is in any way helpful to maintaining the public health; its not required for regular restaurants (for every worker like in food trucks).
2) In reality there are next to no legal spots to park a food truck in nyc. In manhattan, pretty much every spot is metered, and therefore illegal. However, as long as no one complains, usually the cops leave you alone. Usually, but its unpredictable.
3) Arbitrary and capricious enforcement of health regulations by health inspectors that can lead to large fines and confiscation of your permit. Again, don't underestimate how big a deal this is. At any time, for approximately any reason if the inspector doesn't like you, your entire business can be shut down. Think about how patent lawsuits affect startups and then imagine that a class of patent inspectors can just bust in unannounced several times a month to shut you down. It's like that.
4) You can't actually get a permit legally because the city doesn't issue them any more. All food trucks get their permits on the black market and the costs is up to $20K per year now. It's not just the cost but also the hassle of having to deal with that. It's also completely stupid from the city's perspective as they could be auction off permits as they do for taxi medallions. Instead the benefit goes to people who just happen to have been issued a permit many years ago for $200.
5) You must park in a licensed commissary as mentioned in the article. It means you basically have to pay 3x in rent what you would if you could park legally in a private lot. And plus those places are actually completely filthy. I've been to several.
All that said, the article is actually quite wrong about it not being a profitable business. The people I know are raking in cash hand over fist. There is huge demand as long as your food and concept are decent. If the city actually fixed some of these regulatory issues, there would be a huge explosions of trucks overnight.
@2: If it is not legal to park somewhere, then don’t park there rather than complaining about unpredictability in law enforcement. Ideally, everyone parking ideally would be fined every time. Would your friend prefer that?
@3: Nothing wrong with enforcement of health regulations. Ideally, these would take place all the time at the best humanly possible quality. Since health inspectors are just humans, too, they might appear somewhat arbitrary. Again, ideally, everyone violating one of these regulations at any time would be shut down permanently.
@4,5: Okay, these are obviously problems. The simplest solution appears to be not to require a license to operate such a business and regularly auction off suitable (public) places to the highest bidders (once a month, maybe?).
I worked in food service for 17 years, opened my own restaurant, etc. ALL my employees had to have a food handler's permit, and there had to be a manager with an expanded permit. So the idea that only one person needs a permit in an entire restaurant is scary. Perhaps it's a terminology issue...
A lot of people would find this undesirable, esp. considering the vast majority of food trucks only do service in Manhattan. An explosion of food trucks eating up already heavily trafficked road and parking spaces sounds like a bad idea.
The main problem in Manhattan is that street parking rates are kept artificially low – as much as 40% of the traffic is due to people driving around hoping for a savings over garage parking.
Not true. Most cross streets are not metered, they are free parking. I don't know whether they are legal for food trucks, but they are legal to park in.
Then you have the case of this lady: She had a street-vendor’s license, she said, but didn't understand that she also needed a separate permit for her cart.
This whole situation with licenses costing money and being "leased", plus the commissaries, reminds me of the Boston cab situation right now - when you need to pay a bribe to be able to driver a cab for the day, regulation is definitely getting in the way.
I'm equally ok with Apple's App Store curation.
But it's a tricky line to get right. When visiting countries with street food cultures, you can generally do ok by following the local crowd. But that's because the local establishment isn't going to screw the pooch and poison the regular clientele if they can help it.
We live in a society attempting to outsource trust, whether by government regulation, flimsy technological crowdsourced reputation or other equally ephemeral measures of quality.
They were cheap and tasty - we couldn't afford to go into restaurants or even diners.
We need to regulate the NYT.