Food trucks: How regulators keep cheap food out of hungry mouths

Food trucks: How regulators keep cheap food out of hungry mouths

May 24th 2014 | ALEXANDRIA | From the print edition

FOOD is risky. You can choke on a hot dog, be poisoned by a pizza or die slowly from years of eating too much. Clearly, businesses that sell food are suspect. And what could be more suspicious than an outlet that sells food—and then drives away before its customers expire? Small wonder that so many American cities frown on food trucks.

Miami makes it extremely hard for them to operate, as do Baltimore and Chicago. Rochester, Pittsburgh and San Diego are nearly as stern. In New York City, a cap on the number of food-truck licences available has created a black market, pushing up prices into the thousands of dollars.

How bad can food trucks be? Your intrepid correspondent sampled injera with tilapia from one serving Ethiopian nosh in Washington, DC. As The Economist went to press, it had not yet killed her. Perhaps this is unsurprising: food trucks are typically required to cook their food in inspected commercial kitchens.

Nonetheless, they stir up fury. Local restaurants complain that they steal customers and pay no rent. Officials worry that their garishness will lower the local tone. Many think they are just dirty (“roach coaches” is the sneer).

After years of legal wrangling, Alexandria’s city council in Virginia has at last decided to allow food trucks in parks and parking lots. Not in the streets, mind. The experiment starts in July, and the typically mean-spirited conditions are there to protect the immobile restaurant trade.

Such rules are misguided. Not only is street vending an important step for aspiring entrepreneurs, but food trucks have enlivened the gastronomic scene and generated new business—and local taxes—wherever they have been allowed to roam.

At Farragut Square, the centre of the food-truck scene in Washington, DC, no fewer than 15 trucks dish up tasty, cheap lunchtime grub to wage slaves every weekday. The buzz they create has been good for local businesses; four new restaurants have opened round the square in the past two years. Having forged a loyal customer base, at least 20 local food trucks are opening brick-and-mortar outposts, says Che Ruddell-Tabisola, head of the DC Food Truck Association.

Mike Lenard is a prime example. He rolled out his TaKorean food truck in August 2010 with $65,000 of investment, a newly remodelled Ford step-van and a vision for Korean BBQ tacos. By this summer he will be employing around 30 people, with a taco stand at Union Market (a chic artisan food court) and a new full-scale restaurant. Chow down on that.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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