Food Truck Freedom in America
Food trucks are incredible vehicles for entrepreneurship and economic growth. You don’t need a fancy degree or privileged background to start one. Startup costs for a restaurant on wheels are a tenth of what their brick-and-mortar cousins require.
Mobile vending is a low barrier to entry business — except when it comes to licensing and permitting. As a new report I helped write for the U.S. Chamber of Commerce Foundation found, food trucks are being needlessly slowed by local regulations. These barriers are putting brakes on food truck formation in America.
Food Truck Nation pulled together publicly available information on the cost and complexity of regulatory requirements for opening and operating a food truck in 20 American cities. Since regulatory environments may look one way on paper and another in reality, the Chamber Foundation then paired these findings with a survey of 288 food truck owners conducted by Argive, a Silicon Valley-based nonprofit.
Here are the best (and worst) cities for food truck regulations:
Just looking at what’s on the books, there are big differences with regulation between starting up, keeping up, and taking off as a food truck.
Starting up means all of the rules a truck must comply with to establish itself as a business. Denver, Indianapolis, and Philadelphia scored best for starting a food truck, while Washington, D.C., Seattle, and Boston are at the bottom. Boston, for example, require 32 procedures to start a new truck along with more than $17,000 in regulatory costs (mostly for monthly zoning permits).
Then there are rules for keeping up so you can vend on a regular basis. There are three parts to this category: proximity restrictions, operations, and zoning. Los Angeles, Philadelphia, and Denver were best when it came to complying with restrictions, while Minneapolis, Phoenix, and San Francisco ranked at the bottom. In Minneapolis, trucks are not allowed to vend within 100 feet of a restaurant, 300 feet of a residential building, or 500 feet from a festival or sports event.
Taking off as a food truck operator means the rules they must comply with in order to maintain regulatory compliance annually. In this category you’re talking about insurance, licenses and permits, taxes, inspections, and other things (e.g., a data plan or tracking devices). Portland, Phoenix, Indianapolis scored best when it came to operating a food truck, while Boston, Washington, D.C., San Francisco scored lowest. Portland not only offers the lowest ongoing costs, but food trucks need to comply with only 7 procedures and 7 trips to city agencies each year.
Simplifying or eliminating unnecessary regulations is a top concern to food truck owners. “We all work so hard as small business owners that we don’t have time to deal with government,” said one Austin-based survey respondent. “Government’s job should be to ensure we run a safe food service business, pay collected sales tax, obey labor laws, and that is about it.”
Clear and consistent rules are more important than a friendly local government, though those two often go hand-in-hand. As one Chicago-based food truck operator suggested, “Be open to different types of businesses, move processes faster, and be open to innovation.”
At the state and local levels, three reforms immediately stand out:
- Proximity restrictions → No distance restrictions on public right-of-ways. Don’t criminalize competition.
- Operating restrictions → Limited restrictions on location duration, hours of operation, or days of service beyond what already applies to brick-and-mortar restaurants in a neighborhood. Cities should be open for business.
- Licensing → Single statewide permit on mobile food businesses. “We work with four different counties and eight different cities,” said one Denver local, “and none of the requirements are either posted or the same.” Or absent statewide reform, why not a policy of 1–1–1 locally — one operator, one license, one fee? We should let food trucks roam.
Why bother with food trucks or local regulations? Why sweat the small stuff? Because this country is in the midst of a four-decade slump in new business formation. Entrepreneurs, particularly in traditional businesses, face local regulations that are often highly complex and little understood. Small barriers to small businesses together pose large problems for America’s economic dynamism.
In fact, food trucks are a symbol of regulatory inequality across the economy. There is a growing gulf between how government regulates the sort of entrepreneurship most accessible to the educated and wealthy, and how it governs entrepreneurship most accessible to the poor. Here’s how Manhattan Institute’s Edward Glaeser put it:
“It’s a sad fact that America tends to regulate the entrepreneurship of the poor much more stringently than it does that of the rich. You can begin an Internet company in Silicon Valley with little regulatory oversight; you need more than ten permits to open a grocery store in the Bronx.”
Regulatory inequality for food trucks falls heaviest at the state and local levels, directly affecting entrepreneurial opportunity for those who need it most. Moreover, trucks are often victims of regulatory cronyism favoring incumbent restaurants and their landlords, which is just as unequal and unfair.
City leaders need a greater awareness of the speed bumps to mobile vending. Otherwise the food truck industry may be needlessly slowed, limiting entrepreneurial opportunity and consumer choice.
It’s time we fought for food truck freedom in America.
