Washington DC is considering new regulations that would create special zones throughout with a limited number of parking space for food trucks. Truck owners would be assigned spaces based on a lottery, with winners getting a parking space but also paying a fee for the right.
This would effectively limit the number of food trucks per zone and raise the costs of doing business.
Not surprising, DC food truck owners are not happy. Key quote from the owner of DC food truck Curbside Cupcakes:
"These regulations will kill the food truck industry in the city as we know it."
This is an example of the regulatory battles taking place across the country. Cities nationwide are grappling with how to deal with growing numbers of food trucks.
Adding to this regulatory morass is attempts by traditional brick and mortar restaurants to use their political power to contain and constrain the growth the food trucks, which they see as a competitive threat.
This is not surprising. Industry incumbents often respond to innovative newcomers by using their political power to influence the regulatory process to constrain new entrants.
There are many examples of this approach. They include the U.S. auto industry versus Japanese automakers, traditional airlines versus low cost airlines, independent booksellers versus Amazon - the list goes on and on.
But in case you didn't notice, in the examples above the incumbent industry failed to deter the new competitors (although to be fair, in many cases they were able to delay the new competitors).
The reality is when a new entrant offers a better customer solution it's likely they will eventually overcome political roadblocks and win in the marketplace. Based on our research, we think food trucks offer a better solution in several market segments.
Expect to see more high profile regulatory battles. Traditional brick and mortar restaurants pay a lot more local taxes than the food truck industry. This gives them political power and the ability to influence local regulations.