Anticompetitive rules barred Benny Diaz from operating his food truck in Fort Pierce, Florida.
Benny Diaz’s specialty is tacos made with recipes inherited from his grandmother. When he started making them at a Florida restaurant where he worked, the unique tacos were such a hit that patrons urged him to start his own business. After a lot of planning and a little financing, Benny’s food truck, Taco Trap, was born.
With his new mobile business, Benny hoped to share his tasty tacos with customers in towns and cities all along Florida’s Treasure Coast. But he soon found there was one place where his truck was not welcome: Fort Pierce, the seat of St. Lucie County, had a law banning food trucks from operating within 500 feet of brick-and-mortar restaurants—even if the trucks were on private property. This rule effectively barred food trucks from serving customers in downtown Fort Pierce or anywhere else in the city where they were likely to find customers. 1
City regulators did not care how many people wanted to try Benny’s delicious tacos—or the offerings of other food truck entrepreneurs. Rather, what they cared about was protecting brick-and-mortar restaurants from competition. Indeed, when the city passed the ban in 2014, then-Commissioner Edward Becht justified it by saying allowing food trucks to operate in Fort Pierce could “hurt the brick-and-mortar businesses.” 2
Where once food trucks existed on the periphery of American society, they have become decidedly trendy in recent years.
Fort Pierce is far from the only city that has shown hostility toward food trucks. In recent years, cities across the country have adopted rules severely curtailing when, where and how food trucks can operate. 3 It is understandable—and legitimate—that cities would adopt some regulations for the sake of traffic and sanitation, but many regulations are, like Fort Pierce’s 500-foot ban, geared toward protecting established businesses from competition in the face of food trucks’ rapidly rising popularity.
Where once food trucks existed on the periphery of American society, they have become decidedly trendy in recent years. For example, food trucks have featured prominently in mainstream movies such as The Five-Year Engagement, What to Expect When You’re Expecting and Chef. 4 They have also appeared in television shows such as Big Food Truck Tip, 5 Shark Tank and The Great Food Truck Race, the last of which averages over a million viewers ages 18 to 49 per episode. 6 Even an Olympian is talking about food trucks. Tamyra Mensah-Stock, who won wrestling gold at the 2020 Summer Olympics in Tokyo, said she would give her mother $30,000 of her winnings to help her fulfill her dream of starting a food truck. 7
This newfound cultural relevance has coincided with tremendous industry growth. In 2021, there were almost 32,500 food truck businesses in the United States, and they employed over 38,000 people. 8 In 2018, food trucks were active in more than 300 cities across the country, 9 and from 2010 to 2016 the number of food trucks grew by more than 400% in Salt Lake City, 500% in San Francisco and 600% in Austin, Texas. 10 And from 2014 to 2017, industry revenue more than quadrupled, growing from $650 million to an estimated $2.7 billion. 11
This growth is both remarkable and simple enough to explain. On the supply side, food trucks have relatively low startup and overhead costs, putting business ownership in reach for people seeking new economic opportunity. 12 Moreover, the mobile nature of the business allows entrepreneurs to take their food to where the customers are. And on the demand side, consumers value the culinary experience and convenience that food trucks provide. 13
These features of food trucks saw them first start to take off following the Great Recession of 2008, when many people found themselves out of work or unable to secure funding for a brick-and-mortar venture. 14 They also contributed to food trucks’ continued popularity during the COVID-19 pandemic. With many downtowns turned to ghost towns and indoor dining options severely restricted, food trucks headed out to the suburbs in search of customers, whom they were able to safely serve outdoors. 15 According to Ren Budde, the business development director of a company that customizes food trucks, the “demand for trucks [was] rising and manufacturers [were] struggling to keep pace.” Budde said, “We’re now seeing more call volume pick up from individual operators.” 16
But not everyone loves food trucks. Opponents—typically restaurateurs and their allies—allege the mobile businesses represent “unfair” competition to restaurants because they supposedly do not make the same heavy investments in the community as brick-and-mortar restaurants. 17 For example, Newport, Rhode Island, already bans food trucks from operating within 250 feet of established restaurants. Nevertheless, the owners of a brick-and-mortar pizza restaurant located on the city’s Bellevue Avenue have argued that a pizza truck should not be allowed to operate on Bellevue Avenue at all because the truck’s owners do not pay rent or property taxes. 18 As a result, the City Council has proposed banning all food trucks from operating on Bellevue Avenue. Together with the 250-foot ban, this would effectively leave just seven spots in the entire city for food trucks to operate. 19
Food truck opponents claim food trucks’ operational advantages threaten to put restaurants out of business. For example, following the Great Recession, one San Francisco brick-and-mortar restaurant owner claimed that competition from food trucks had forced him to cut his labor just to stay in business. 20 Similarly, in Covington, Ohio, a longtime meat shop owner worried that allowing food trucks to sell in commercial areas of the city would harm restaurants struggling to stay alive following the recession. 21 To protect restaurants from this “unfair” competition, food truck opponents advocate for restrictions on food trucks, such as limits on the number of food trucks that can operate, where they can operate and how long they can operate in any one spot. 22
This study puts the restaurant industry’s concerns to the test: Do more food trucks threaten the restaurant industry? Although some restaurants may close because of ordinary competition from food trucks (or other restaurants), our results show that more food trucks do not mean fewer restaurants. In fact, the evidence suggests that food trucks may help the restaurant industry. These results indicate that thriving food truck and restaurants industries can go hand in hand.