A legal Food truck: All it took was a year and 60 trips to city hall

[jackie5275]

Who owns that lot?

I bet they are getting rent, and paying property taxes, just like a brick and mortar restaurant.

I'm I wrong?

I think Park Rite owns the lot.They have a booth & signs for it at the end of the lot at the Monroe entrance. When I walked past there today, it looked as if the lot has cars with Park Rite permits in their windows parked almost all the way up to where the food truck is. It looks lilke they have about 4 spaces on each side of the lot open to accomodate the food truck. Perhaps El Guapo is paying a monthly parking rate for the area of the open spaces.

[Richard]

Interesting points

I pay lot rent for my trucks and the lot owners pay property taxes.
It would be insane to place a food truck in a residential neighborhood and most cities do not allow it zoning wise anyways.
I pay utilities and taxes on a account that would not be activated.
Taxes collected are based on sales as would any brick and mortar restaurant.
My products are more specialized then available at restaurants so I am not competing.
It cost to build the truck and equip it.
If am in the mood for a gyro who cares if the truck is parked next to a taco stand I would have not ordered tacos anyways .
Many restaurants can put out a food truck to secure a second location until a customer base is established.
My employees make the same in the truck as they would make in a restruant but could not find currant employment .

Etc etc

Brick and mortar restruants have the highest profit margins but also the highest failure rate way before food trucks.

[Fnemecek]

Hey gang,

I was busy dealing with work and life for the past couple of days. Regardless, I think there have been some great posts on this thread. I want to take a moment to respond to a few things.

Fnemecek, I see your point, I really do. I think that it will affect the sales of brick and mortar restaurants. I expect it will affect all existing restaurants that offer a comparable type of lunch. I also agree that food trucks should pay a premium to operate, but no more than a property tax equal to their physical footprint.

This is because you are forgetting that brick and mortar restaurants have several advantages over food trucks that flow from the cost of owning or leasing real property. Namely, a brick and mortar restaurant can be open all year. Food trucks are mainly seasonal businesses, so in February when the El Guapo truck is parked in Anthony Curis' backyard, the brick and mortar sub-shop will still be ringing the register.

I suspect you are correct about the seasonal nature of food trucks. However, I would counter by pointing out that I doubt most brick and mortar restaurants can survive if they are only operating at peak volume for 4 - 5 months out of the year.

If they don't survive, the property tax revenue goes away and that has the same end result on the community as if the food trucks were in operation year round.

Secondly, brick and mortar restaurants are able to offer their customers a lot more because of their physical real estate, namely the use of a restroom. Also, when people sit down for a meal at a restaurant, they tend to order additional items, like appetizers and drinks. A food truck cannot really offer these things.

The point that I would like to make here is that food trucks are most likely to pull business away from brick and mortar restaurants at the lower end of the price scale [[e.g., McDonald's, Subway, and their non-franchisee counterparts). Restaurants at that end of the spectrum, generally speaking, don't offer appetizers and such.

[Fnemecek]

In my view, this doesn't have anything to do with fairness. The trucks have [[and should have) lower costs as they don't use downtown buildings and they use a lot less space in general. It isn't as if there is a special property tax on restaurants. Businesses that don't need space in the city don't pay property taxes. But If the argument is that the city shouldn't allow trucks to protect revenue, or should only allow them if they pay high fees to offset whatever revenue may be lost from restaurants because of the competition from trucks, that is a practical argument, not one about fairness.

Fine. How do you propose that we make the lost tax revenue that will invariably happen when the food trucks start putting brick and mortar restaurants out of business?

[Fnemecek]

Fair doesn't apply here at all. One pays property tax because they own property. One does not because they do not own property.

I'm not understanding why this is a difficult concept.

Again, fine. How do you propose that we deal with the lost tax revenue that will happen once food trucks put some of the brick and mortar restaurants out of business?

[Fnemecek]

I think it is patently absurd to say that the fees for a truck should be equal to the property taxes on a restaurant. First of all, a "restaurant" isn't taxed, the land and buildings it is contained within are taxed.

If a restaurant that is renting space goes out of business, and the land owner isn't able to find replacement, the land owner will likely cut his losses and walk away from the property leaving us with more vacant commercial property. Examples of this include, well, pretty much every vacant commercial building in Detroit.

[Fnemecek]

My products are more specialized then available at restaurants so I am not competing.

Are your customers also buying lunch at a brick and mortar restaurant the same day that they buy lunch from you?

If not, you are competing with them. Each customer has a choice between the various options in the area. Each business is competing to get said customer to chose them.

That's the free market at work.

The difference is that our current tax structure is built, to a vary large extent, around taxing land. When customers chose the non-tax paying option, it sets a series of things in motion that ultimately damage our ability to maintain basic government services.

We can either adapt to the changes now or we can suffer later. Personally, I'm in favor of adapting to changes. There really isn't an advantage to suffering later.

Brick and mortar restruants have the highest profit margins but also the highest failure rate way before food trucks.

Fine dining restaurants have the highest profit margins. However, food trucks aren't much in the way of competition for them.

Food trucks are, however, competition for the lower price point restaurants. Those operation have a much lower profit margin [[roughly half of their fine dining counterparts) and relay on a high sales volume in order to stay in business.

[Downtown Lady]

...that will invariably happen when the food trucks start putting brick and mortar restaurants out of business?

No offense intended, but you are arguing as fact what is really just a big assumption. Your whole debate is based on a seemingly foregone conclusion that food trucks will put brick and mortar restaurants out of business, but you don't know that. Anecdotal evidence provided by others about other cities suggests that food trucks contribute to a thriving scene.

[SWMAP]

If food trucks so happy for other cities, why are cities like NYC, Chicago , Charlotte, etc.trying to rein them in? Did you read last week's op-ed from New York Times linked on the first page of this discussion?

[Fnemecek]

All of the cities that have been discussed had vibrant restaurant scenes and street life before food trucks became into the latest fad. Food trucks haven't put every brick and mortar restaurant out of business, but they have caused enough problems that those cities are moving to reign them in.

[Fnemecek]

Also, let's take a moment to compare and contrast the possible scenarios.

Option #1. I'm 100% wrong.
We impose a license fee on food trucks that is roughly equal to the property taxes that a small restaurant pays, but the trucks are later proven to have absolutely no impact on brick & mortar restaurants. In which case, everyone has had to pay an extra 50 cents for a taco [[so the food truck can pay the aforementioned fee) for nothing.

Option #2. The "cool" crowd is wrong.
Food trucks do indeed pull enough business away from the lower price point, higher sales volume restaurants to force some of them out of business. In which case, we end up with a shortage in property tax revenue. We thus aren't able to keep all of our ambulances running, street lights turned on, or some other shortage in public services happens.

Which option would you rather deal with?

Having paid that extra 50 cents or so for a really cool food item that you loved?

Or having to explain to someone that you were partially responsible for an ambulance not being able to come for their loved one?

[mwilbert]

If food trucks so happy for other cities, why are cities like NYC, Chicago , Charlotte, etc.trying to rein them in? Did you read last week's op-ed from New York Times linked on the first page of this discussion?

The op-ed in question does not cite any actual harm to restaurants, nor to cities. There isn't even a claim of harm to a city. There is a restaurant owner claiming harm [[not to herself, I might add, just in general) without any evidence. The fact that someone printed it doesn't give it any additional credibility in my mind.

The cities discussed either are regulating where food trucks can park to protect parking spaces, which I have no problem with, or are reacting to lobbying from the restaurant industry, which I don't think should be allowed to restrict competition.

[Hypestyles]

on travel channel they had a "Food Paradise" episode rerun the other day, focused on food trucks.. had a greek food truck in New York featured.. yum..

[Fnemecek]

The op-ed in question does not cite any actual harm to restaurants, nor to cities. There isn't even a claim of harm to a city. There is a restaurant owner claiming harm [[not to herself, I might add, just in general) without any evidence. The fact that someone printed it doesn't give it any additional credibility in my mind.

The cities discussed either are regulating where food trucks can park to protect parking spaces, which I have no problem with, or are reacting to lobbying from the restaurant industry, which I don't think should be allowed to restrict competition.

If there's no harm to the brick & mortar restaurants, why do you think they're lobbying to have these things reigned in?

Do you think they're doing so because they're bored?

[noise]

Again, fine. How do you propose that we deal with the lost tax revenue that will happen once food trucks put some of the brick and mortar restaurants out of business?

Planning for the exception or extraordinary is no way to run a city.

[Fnemecek]

If food trucks putting brick & mortar restaurants out of business was either the exception or extraordinary, cities across the U.S. would not be reigning food trucks in.

Again, how do you propose we deal with the lost tax revenue that will happen once food trucks put some of the brick and mortar restaurants out of business?

[noise]

If food trucks putting brick & mortar restaurants out of business was either the exception or extraordinary, cities across the U.S. would not be reigning food trucks in.

Again, how do you propose we deal with the lost tax revenue that will happen once food trucks put some of the brick and mortar restaurants out of business?

In this case, you should very easily be able to post some relevant data to back your claim. Especially since it ignores all other possible reasons cities across the US would want to "reign in" food trucks.

I propose it's a red herring argument that doesn't deserve consideration.

[noise]

For the record, I've never advocated letting every fool and his brother start a food truck. Nor have I advocated every single business having a liquor license.

[noise]

If food trucks so happy for other cities, why are cities like NYC, Chicago , Charlotte, etc.trying to rein them in? Did you read last week's op-ed from New York Times linked on the first page of this discussion?

I'm not certain you read last week's op-ed from NYT, actually. As mentioned, it's not talking about any factual problems. It's talking about regulations, for a wide variety of reasons. I don't suspect anyone here is suggesting there should be no regulations for food trucks in Detroit.

[SWMAP]

I am the person who posted it - of course I read it.

The increasing regulatory stance of cities comes from the concerns the Cities have about this industry. As the article says: this trend isn't going away [[implied: but it is very problematic) and so the cities are responding by legislating [[implied: the heck out of them).

Parking is one issue: they want to park where foot traffic abounds. The near-by restaurant don't want them. Another article discusses the fact that when the food trucks arrive, the restaurants end up laying employees off. so the cities are chasing/ticketing the trucks, herding them into vacant lots not too close to restaurants.

The big issue for cities is: how to balance the desire of locals for trendy trucks witht he desire of brick/mortar food spots to keep their clientele. In Chicago, according to the Alderman quoted, the brick/morter people will win.

[noise]

They could go with the Mark's Carts model in Ann Arbor. They may as well not be carts.

[Fnemecek]

They could also deal with the realities in Detroit, pay an appropriate license fee if they want to compete with brick and mortar places, and charge folks that extra flipping 50 cents for a taco.

[Fnemecek]

Oh, wait! I forgot. This is Detroit.

No one is supposed to pay for anything that's cool. All of the money that we need for basic public services will just magically materialize.

[noise]

They could also deal with the realities in Detroit, pay an appropriate license fee if they want to compete with brick and mortar places, and charge folks that extra flipping 50 cents for a taco.

We could argue about the definition of "appropriate" all day long, but I think you're still the only person claiming these vendors have REFUSED to accept any fees or taxes.

[mwilbert]

If there's no harm to the brick & mortar restaurants, why do you think they're lobbying to have these things reigned in?

Do you think they're doing so because they're bored?

Because they don't want any extra competition. Businesses always lobby against competition. They probably don't know whether they will be significantly affected or not, especially if food trucks haven't been in their vicinity before, but they see no reason to take the risk. People are risk-averse and have a strong status-quo bias. In any case, I'm not saying they wouldn't be hurt. I'm saying the op-ed gave no evidence for it, nor any evidence that the cities involved would be hurt. And as I have said many times previously, if they are hurt because people would rather eat at a truck, then so be it.

Option #2. The "cool" crowd is wrong.
Food trucks do indeed pull enough business away from the lower price point, higher sales volume restaurants to force some of them out of business. In which case, we end up with a shortage in property tax revenue. We thus aren't able to keep all of our ambulances running, street lights turned on, or some other shortage in public services happe

And how much revenue do you think this would be? The city [[as you have often pointed out) wastes an awful lot of money. I would like to see that wastage reduced before I started worrying about hypothetical revenue losses caused by food trucks.