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Source link: http://archive.mises.org/13894/the-great-food-truck-lobbying-race/

The Great Food Truck Lobbying Race

September 14, 2010 by

The City of Emeryville, California, is looking for individuals to serve on its new “Food Truck Taskforce” — a bureaucratic reaction to the increased competition local “brick and mortar” restaurants face from mobile kitchens. Local worker Catherine Hicks tweeted, “restaurants are whining that trucks are more popular at lunch!” But the city sees this shift in lunching habits as a political problem requiring a political solution:

While the City recognizes that street vendors and food trucks have added to the vitality of the City, concerns have been raised that have led the City to believe that the current regulations should be reviewed to ensure that (brick and mortar) restaurants and other businesses are not negatively impacted by the growing numbers of mobile vendors.

Of course, one business’s “negative impact” is another business’s honest competition. As Hicks noted, “[N]ote to local restaurants: welcome to AMERICA! With opportunity comes competition!” Yet for many businesses, “competition” means jockeying for political position over satisfying customers. Brian Donahue wrote on his blog, The Emeryville Tattler:

Ruby’s Cafe on Hollis Street serves several different kinds of juice. Ruby’s owner, Albert Repola knows a lot about juice, and he’s using it right now at City Hall, trying to oust food trucks that he sees as rapacious competitors. Mr. Repola has been very vocal in this view, repeatedly demanding action from City Hall. Officials, who seldom act in the benefit of small businesses, suddenly appear unusually responsive, vowing to add further regulations to the city’s Food Vendor Ordinance.

[ … ]

Could [the city's taskforce] possibly be political patronage at work? After all, Mr. Repola has been very generous in his support of the Council majority over the years.

Nevertheless, times are tough, and everyone is looking for a scapegoat. If Mr. Repola’s business isn’t quite as prosperous as it once was, perhaps it is the result of the unemployment or foreclosure rate, rather than from “competition” that cannot offer shelter from the weather or the amenities of a restaurant.

Unlike some restaurant owners, the food truck vendors have not paid money to the re-election campaigns of the Council majority. Maybe they think they’ll get a fair shake at City Hall regardless. Obviously, these vendors are new to town; they may know about food but they’re obviously selling the wrong kind of juice in Emeryville.

The taskforce itself is expressly charged with restricting competition. The city’s press release identifies seven objectives:

* Limiting the geographic area that mobile food vendors may operate
* Limiting the number of mobile food vendors
* Raising permit fees
* Regulating mobile food vendors on private property
* Use of public right of way for cooking, seating, and/or storage
* Limiting competition with fixed restaurants
* Developing remedies for non-compliance with the ordinance

Note that you don’t see any of the usual “health and safety” arguments used to justify intervention. Nor does the city rely exclusively on its power to control “public” property. All of the objectives are focused on making it more difficult for food trucks to operate, in the hopes of limiting their “negative impact” on politically favored brick-and-mortar restaurants.

The taskforce itself will include a Noah’s Ark-like complement of two city councilors, two representatives from the food trucks, two from the restaurants, and, most comically, two “patrons of food trucks and restaurants (1 each).” Apparently in Emeryville, people dine exclusively at one or the other, not both. Brian Donahue said he applied to the taskforce — I assume as a representative of food-truck patrons — but added, pessimistically, “Since I have strongly expressed views that food trucks are good and City Hall has already stated it wants to clamp down on food trucks I will not be allowed to serve on the task force.”

I should say, while it’s easy (and proper) to criticize the restaurant owners lobbying for new food truck restrictions, they are also victims of government intervention. Restaurants may be the most regulated category of business in the country. They are certainly one of the most overtaxed. What’s unfortunate in these cases is that restaurant owners choose to partner with the government against fellow small businesses rather then join those businesses against the government.

Business owners of all types, broken down by years of intervention, now take the current regulatory state as an immovable starting point and work to either hold the line or drag other businesses over to their side of the line. It’s easier — though not cheaper — to lobby local government hooligans then to simply say “no” to them.

For their part, the hooligans are cracking down on food trucks and similar businesses because they represent a threat to the thing the hooligans hold most dear — their “tax base.” Sure, the trucks may have to buy city permits and meet some licensing requirements, but they’re not paying exorbitant rents to occupy a parcel of taxable real estate. And to add insult to injury, they’re “stealing” customers from the businesses that are!

Emeryville officials no doubt see this taskforce as a necessary mechanism for self-defense. They’re under attack from a hostile force that is undermining their tax base and undermining the concept of a properly “planned” community. It’s only natural for the city to take aggressive measures to prevent this hostile force from expanding its foothold on the lunchtime purchasing habits of local workers. “Competition” and markets are fine in theory, but in the real world, bureaucrats need to feed their families and ensure themselves healthy pensions. They can’t do that when radicals in food trucks are destroying the tax base one sandwich at a time.

{ 18 comments }

J. Murray September 14, 2010 at 9:38 am

Mr. Repola likely doesn’t understand that he will, in the end, be destroyed by this. If not by negative customer reactions, but by the expanding state power he is helping to grow. If the brick-and-mortars are “triumphant”, whatever comes will be used against them in the future.

Seattle September 14, 2010 at 10:20 am

The state’s like a great big monster that just eats and destroys everything it can find. You cannot make it your ally. You can only pray it decides to kill your enemies first.

Kakugo September 14, 2010 at 11:17 am

My mother always said: “Beware of who you go to bed with”.
Let’s see how long before, as Albert J. Nock warned, restaurant owners will whine and moan they are being hit by, say, more stringent licensing requirements or increased permit costs.

Shay September 14, 2010 at 12:04 pm

Wow, I can just picture a nearly identical story last century:

While the City recognizes that gasoline vehicle vendors and mechanics have added to the vitality of the City, concerns have been raised that have led the City to believe that the current regulations should be reviewed to ensure that (horse and buggy) vendors and other businesses are not negatively impacted by the growing numbers of gasoline vehicle vendors.

HL September 14, 2010 at 1:25 pm

Indeed. Strangle innovations that benefit consumers. I love the sight of burritomobiles.

Art September 14, 2010 at 2:01 pm

While the government recognizes that web bloggers have added to the vitality of information and opinion exchange, concerns have been raised that have led the government to believe that the current regulations should be reviewed to ensure that traditional newspaper vendors and other legitimate news sources are not negatively impacted by the growing numbers of amateur internet sources.

maggie September 14, 2010 at 2:36 pm

Dear Mr. Repola,

We moved down the street from your restaurant about 5 years ago. I don’t think that your menu has changed once in the 5 years. Sure you have daily special, but they have been the same specials for the last 5 years. It is not the trucks that are hurting your business, it is the fact that you have not changed anything in years. People can’t eat the same thing day after day. Please update/change your menu and folks just might return. Please stop blaming the trucks for your lack of innovation.

JFF September 15, 2010 at 6:21 am

Of course; however, the restaurant owner is seeking the right to not have to innovate. That is the point of all government protectionist intervention.

Will Gerard September 15, 2010 at 6:08 pm

The “right not to innovate” is called monopoly.

RTB September 14, 2010 at 8:55 pm

We can only imagine the number of regulations and taxes that affect the existing “brick and mortar” restaurants. It’s just like the push to bring the countries with less onerous money and banking regulations into line. The State simply cannot allow cheaper, more efficient choices to circumvent their sphere of power.

SK September 15, 2010 at 4:38 pm

The author may be ignoring an important factor which is that the truck vendors are probably deriving an economic benefit from the brick and mortar restaurants by parking themselves near the restaurants. So, for example, a greek food truck vendor may choose to park near a known greek restaurant and could offer similar quality food at a lower price since no rent is paid. Normally a brick and mortar greek restaurant would not choose to locate right next to another brick and mortar greek restaurant. But the opposite is true with a truck vendor who has a strong incentive to locate near its brick and mortar competitor. The fixed real estate works as a draw for both businesses, but only one of the businesses pays for it.

J. Murray September 15, 2010 at 4:57 pm

He isn’t ignoring that. You’ve assumed that the restaurant owns some surrounding area around his restaurant. If the restaurateur didn’t want competition within a certain range of his establishment, he could just buy the land around the area. The food truck operating on a piece of open property near the restaurant is not justification to engage in government action to chase it away.

What you do bring up is a problem.

1. Companies do not have a natural right to not have competition, even in location. Should a food truck decide to operate on a parcel of land it has rights to access, even if it is immediately next door to the restaurant itself, then they can do so without any interference by the restaurateur. If we establish that an existing facility has legal rights to chase away food trucks, then it would “logically” expand to disallowing any brick and mortar restaurant from opening next door. Isn’t opening a new facility next to an existing one accomplishing the same thing?

2. The owner does not have the option of purchasing the open sidewalk and roadway adjacent to his establishment. Because of the State ownership of the “public” places, the owner does not have the option of purchasing the sidewalk and roadway to create this buffer zone. It’s a tragedy of the commons issue. Further, to “fix” this tragedy by issuing regulatory law and licensing it only creates the justification to close down other competitors simply because it is bad for a single business.

Will Gerard September 15, 2010 at 6:16 pm

3. Whatever happens, government wins. If no trucks allowed, greater obligation on the immobile restaurants to act as the bag man to collect sales taxes, pay licensing, permitting, and inspection fees, etc. If trucks allowed, greater “need” for government employees to modify the regulations, monitor compliance, “ensure” public “safety” etc. in addition to the added licensing, permitting and inspection fees, etc.

It’s called a “win-win” situation because the gubmint can’t lose, only the public.

“Public Servant” — The Public is our Servant.

Carlos September 15, 2010 at 5:42 pm

I’m moving to the bay area in 90 days specifically to be in the center of innovation. If the city restricts the creation of new products and services, like food trucks, and fails to see the benefit of entrepreneurs increasing productivity by “creating more for less”, I *will* not patronize Emeryville restaurants. I’m not going to support welfare, corporate welfare.

Will Gerard September 15, 2010 at 6:21 pm

Well, there’s at least one use of corporate welfare that’s good for the people:

Read how the Koch family used Soviet money to destroy Stalinism and is now using corporate welfare to destroy the welfare state. Classic: use Cloward-Piven for a libertarian purpose! It drives the Marxians nutz and they are whining about “astroturfing” when somebody uses their methods.

http://exiledonline.com/a-peoples-history-of-koch-industries-how-stalin-funded-the-tea-party-movement/

Lemmywinks September 16, 2010 at 8:40 am

…..I read this article, but how is this good for the people? They have apparently engaged in illegal dumping, had five oil spills in the past 20 years, and covered up environmental violations in Corpus Christi (where I live). We have benzene plumes in the water in certain city sections, because of our large refinery industry. On a national average, people in Corpus are twice as likely to be diagnosed with a birth defect than the rest of the nation.

For all the acknowledgement of self-interest on here, it is extremely naive to think that any of these major businesses want free markets. They fund free-market think tanks because they are anti-regulation, not because they really care about being held liable.

Cathead Cathead Cathead September 16, 2010 at 4:57 pm

Gee, the press release with their objectives was so blatant that it sounded like it was written by college students. Grad students would have talked about health and safety and used phrases like “optimizing proximity” and “maximizing utility.” Plus, they could easily install a new regime to tax the mobile vendors, in order to increase the tax base. Many jurisdictions tax itinerant businesses.

David Veksler September 24, 2010 at 1:21 am

There’s a similar tragic tale with the LA hot dog vendors.

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