Did you read the article? The author is arguing it's not because of that at all, it's because of all unnecessary and conflicting rules and regulations that is in place.
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.