Fojol Bros. of Merlindia

Customers standing beside the food truck operated by Fojol Brothers of Merlindia, a theatrical, mobile Indian restaurant, serving food at various locations throughout Washington, D.C

In this week’s Acton Commentary, “Food Fights and Free Enterprise,” I take a look at the increasing popularity of food trucks in urban settings within the context of Milton Friedman’s observation that “it’s always been true that business is not a friend of a free market.”

As you might imagine, the food truck phenomenon has found opposition from brick and mortar eateries that fear competition from the mobile units. In this they are merely acting from self-interest, trying to influence the local laws and ordinances to favor them. As Friedman says, “It will be in the self-interest of individual businesses to promote a tariff here and a tariff there,” or a specially-designed zoning ordinance here, a tailored regulation there.

Various Christian traditions have recognized the right to food as basic, and there is thus a corresponding right for those who would provide food for others. We therefore ought to respect those who provide us with “our daily bread,” whether it be in the form of traditional restaurants, grocery stores, or food trucks. This means that the prejudice should be in favor of freedom for food trucks to operate and bring daily sustenance to many, or as Lester DeKoster writes, bring food to “God himself, hungering in the hungry.”

One response from brick and mortar restaurants could be to start up their own mobile operations. This would be far more helpful and healthy than trying to get city commissions to disallow them. The relatively lower barriers to entry (e.g. lower capital costs) can make food trucks an ideal start-up enterprise for a culinary entrepreneur. But the mobility and versatility of the food trucks can be a great complement to the stability of a traditional restaurant as well, as many establishments are already finding.

And the complementary relationship between food trucks and sit-down restaurants can work both ways. The food trucks can be a good “first step” into the food service business, and down the line the food truck brands can be well-served by setting up a base of operations with a brick-and-mortar establishment, too.

  • http://www.remnantculture.com/ Remnant Culture

    I just had a conversation about this the other day with an embittered restaurant employee who was sour over the (increasingly) wide array of Minneapolis food trucks. The protectionist sentiment was oozing from his lips, ”pro-business” though his schtick supposedly was.

  • http://naturalaw.failuretorefrain.com jurisnaturalist

    The protectionist impulse is a problem.  But notice that there has been a major demand-shift in this market which made food-trucking viable. We want to eat out and eat fancy.  Also, technology has made it easier to prep food in a truck, and to have customers pay for it.  Finally, twitter is what really makes the trucks possible.
    So, the brick n mortars are really dealing with a market shift which is more difficult for fixed resources (buildings) to adjust to than trucks.  There is a fixed costs vs. marginal costs story in here.  
    There is also a matter of taxation, and services.  Brick n mortars pay property taxes, on top of rent.  They have reliable water and sewer service, electricity, etc. which they pay for, but are subsidized, but are also rather inelastic.  Trucks pay less in taxes, but more in parking, have to manage sewage water and electricity on their own, etc.
    What is the position of liberty in this mix?
    Is it to just allow competition?  But what about equality in taxation?
    The really radical position is to say what needs to happen is to lower the brick and mortar tax rates, or zero them out.  Then there is a fair competition.
    Or maybe make the trucks pay property taxes on parking spaces.
    The mix of competition and privileges or state services which could be provided privately, but which the state monopolizes makes identifying what is fair in this problem very difficult.  
    There is also an alignment of incentives between the state and the brick n mortar guys given the tax revenues.  
    What a mess.
    I like the trucks, and I like competition, but I wonder about how the institutional structure is causing the fight to occur on the current grounds.  The whole story would require digging much deeper I believe.
    Nathan

  • Anonymous

    I like the idea “if you cant beat them, join them” for restaurants. Opening another channel.of distribution can ultimately drive more biz to the mothership

  • Patrick Powers

    As the owner of a stick and mortar retail business, which includes shipping and mail handling, I have found the internet to be the major source of loss of business, by about 1/3 in the last 5 years.  We do pay government quite a bit to certify our scales, meet handicap regulations, maintain the property, plus business taxes.  I would be unhappy if someone pulled up in a truck in front of my store and offered the same services using my parking spaces, trash facilities, diverting customers to our restrooms (reminds me of an Occupy event), and basically using my expenses on establishing my location to siphon customers.  On the other hand, I suppose I could lease a truck and an internet connection to service areas in our community that lack disposable income levels to support a stick and mortar store.

    On the other hand,  if we could get cooperation (a guaranteed afternoon pickup, and price concessions, and post mark authority) from the USPS, I could make up for the loss, by selling mail products.  This would take a lot of overhead off the postal service.

    There will remain a demand for stick and mortar businesses, such as our mailbox services, where permanence, reliability and personalized services offer an economic value.  We have added internet value to our product by sending emails to customers as they recieve packages.

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