Food Truck Success Sits at the Intersection of Government and Technology
Food trucks have been a part of our culinary history for well over a century. These mobile kitchens quickly multiplied after World War II, crowding major cities, and following growth into the suburbs. Their popularity has been triggered by both entrepreneurial opportunity and economic growth. As John Levy puts it, “you get a little slice of the American dream, pretty inexpensively.”
Today’s trucks appeal to multicultural urbanites with twists on casual cuisines and room for innovation in the kitchen. Unique dishes, a trend towards gastronomy, and savvy social media jump started the industry with street vendors increasing +20% year-over-year and revenue hitting $2.3B in the U.S. leading up to the pandemic. But shelter-in-place mandates and the loss of commuter foot traffic caused by COVID-19 handicapped the market, forcing truck revenue to slow and doors to close for the first time in over ten years.
While the industry has seen early signs of rebound as we re-emerge from our homes, two key factors will dictate their continued success: regulation and technology.
Regulation. Food trucks are forced to navigate twisted and costly bureaucracies. According to Food Truck Nation, starting and maintaining a truck for one year requires 45 separate government-mandated measures over the course of 37 business days, costing $28K in licenses and ongoing legal compliance. Government’s control over how, where, and when food trucks may operate introduces increasingly difficult barriers to entry and stalls industry growth — creating roadblocks to mobile vending. Many cities uphold proximity restrictions, preventing trucks from being within a certain distance of a traditional restaurant as well as constraining hours of operation to limited windows. Laws also vary significantly by jurisdiction. With truck owners bearing responsibility to meet different requirements across neighboring locations — government has built an environment that eliminates the benefits of being mobile. To restore growth, city mayors need to streamline approval processes and eliminate red tape associated with operating a food truck. The presence of these vehicles benefits more than just foodies — neighborhoods with truck clusters have seen connected growth in brick-and-mortar establishments. It’s time for regulatory equality. It’s time we treat food trucks the same as their peers (restaurants).
Technology. In my last article I criticized restaurants for being digital laggards but highlighted signs of technology readiness and the need for a digital ecosystem starting with QR order and pay menus. Despite a simplified operation, food trucks would also benefit from an increased digital presence. In fact, they don’t really have one. The most applied piece of technology in many trucks, at least in New York City, is the owner’s cell phone which is used by a few customers for placing orders ahead. POS systems are too expensive, too complicated, and too clunky for little to no available counter space in trucks. And already thinner margins due to smaller ticket items make the popular, but expensive, delivery platforms unaffordable. Instead, trucks rely on local foot traffic for all its demand, and a notebook for tracking orders.
Popular trucks attract long lines, waits, and accept two forms of payment: cash and occasionally Venmo with a surcharge. When I asked one local truck about technology use, I was told they were setting up a Groupon. For context, this Company peaked at the end of 2014 and I’m guessing most of Gen Z has never heard of them.
There seems to be a natural extension for QR order and pay platforms to leverage their existing technology and service food trucks for pick up (and eventually delivery at scale). Trucks could market their QR code in surrounding areas and customers would be able to avoid lines by placing orders in advance. These platforms would also open new forms of payment such as credit cards, of which the processing fees would be more than covered by a likely increase in tips if prompted with a default. Many of the benefits of in-venue QR order and pay exist here as well, including increased spend and use of data for tracking and analytics — information that could help determine optimal truck locations based on cuisine and neighborhood demographics.
Further, a backend system that can be accessed through any personal device allows food trucks to track orders more easily, do away with the notebook, and provide the simplified tool needed to better manage sales — not an iPad that occupies valuable real estate. Luckily a few ventures such as hippo, BFT, and Food Truck Pub are leveraging technology to support this underserved community, making trucks more accessible and convenient.
Food truck owners are a diverse crowd with approximately 80% being minority-owned small businesses. With some of the best cuisines at the lowest price points, this community of entrepreneurs need local government backing and a purpose-built technology to help regain pre-pandemic growth.
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