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One of Birmingham's fine mobile establishments.

(http://www.shindigscateringtrucks.com/)

This post has been adapted and updated from a previous post of mine on a different blog.

Today, the Birmingham City Council approved the much debated "Mobile Food Vendor Ordinances" (they passed burdensome regulations on food trucks). Bob Carlton of AL.com has done an excellent job covering this story. You should go and read some of his articles on the subject if you're out of the know.

What I want to talk about here, specifically, is the distortion of facts and the weaponizing of government regulatory power by some of the established brick-and-mortar restaurants in Birmingham and how it will negatively affect you, the consumer.

I'll be including facts, figures, and empirical research along the way because these are the kinds of things you need to consider before you make an important decision (it's also important that you read the item on which the decision is being made).

The Food Market:

The primary argument for the regulation is that demand is limited (i.e. there is not enough customers to sustain both the food trucks and the brick-and-mortar stores). This is not the case, however. Look at this chart:

The restaurant business ("Away-from-home food") has been exploding for decades. This study from the USDA notes the dramatic rise in prepared food expenditures as a percentage of overall food expenditures, up roughly 30% since the late 1970s and still growing.

If you're one of those federal government haters, read this study by Anthony Epter at the University of Vermont that says roughly the same thing: people are spending a lot more on food outside the home.

Take into account the expanding workforce in the Birmingham area, the many groups working to get people to hang out and spend money downtown, as well as the burgeoning fine dining scene and we can infer that demand for prepared food in downtown Birmingham is not limited, it's booming.

The Role of Food Trucks:

Food trucks are, in purely economic terms, a simple increase in competition in an existing market place. There is a particular demand for food in the Birmingham area. There are certain establishments that serve that demand. As a market (demand) expands, which we have shown above, firms will enter the market; increasing competition and keeping prices low.

But don't food trucks offer a fundamentally different product? No, I don't think so. At least not in a way that meaningfully engages with this argument:

Yes, the processing and presentation of their product is different, but it is still the same product. No one jumped up to defend the profits of Garmin (remember them?) when Google Maps gave rise. Same product, much different presentation, consumers are better off. Let the pieces (or companies) fall where they may.

Yes, they do have the ability to go to the customer. However, they have other costs not associated with standard food establishments (e.g. limited work/storage space, fuel costs, restricted menu size, etc.).

What Does This Mean For You?:

Competition has the effect of either pushing down on prices or pushing up on the offered quality. The presence and viability of food trucks, as equal competitors in an expanding market, will keep prices low and increase the quality of the food available to you on your lunch break.

Furthermore, and I believe more importantly, food trucks act as a multiplier in other Birmingham markets. An explosion in entrepreneurs means an increase in advertising, commercial food sales, commissary rentals, maintenance spending and all of the other businesses related to these fields. Not to mention hiring people to work on the trucks themselves. All of these factors create jobs in Birmingham.

Active streets are crime-free streets. The more people and positive activities we see on our streets, the better we can keep crime at bay. Food truck operators do all of their business on the streets. They have an incentive to promote the well being and improvement of Birmingham.

Lastly, the presence of a food truck community in the city lends itself to a vibrant and up-and-coming social scene that we are all working towards.

Regulatory Hell:

Birmingham is already infamous for burdensome regulations on businesses. Creating barriers for entering a market (i.e. regulations) is absolutely the opposite of what a local government should be doing. Especially when the community is doing its best to grow.

Birmingham regulations include, among other things:

1. Tiered permitting. One permit for a couple hundred dollars will allow them to sell inside the city limits. In order to sell in the "city center" (where they can actually make money) they'll have to pay more. By the way, food trucks already pay for business licenses and permits in the City of Birmingham. This is not the end of the red tape, though. In the draft of the ordinance that I have, ten pages of the seventeen page document are filled with the created bureaucracy of permitting, applications, and appeals.

2. Limit the hours food trucks are allowed to operate, with few exceptions. (i.e. no late-night, drunk tacos for you).

3. Restrictions on selling near brick-and-mortar establishments. This is most of what we have discussed above. Carlton's latest article says that distance is 150ft.

4. Creates a regulatory committee consisting of several city departments and food truck advocacy groups.

This kind of regulation

will

have a negative effect on our thriving food truck community, and threatens to destroy it altogether.

Let's look at some history and research to back up this statement:

A study conducted by the Institute For Justice made the argument that protectionist regulations on food truck vendors (for brick-and-mortar restaurants) resulted in a loss of jobs in the area and a deficiency of cultural expansion. If you're interested in this subject, are an activist, food truck owner, or Birmingham City Council member, you should really go read this report.

Los Angeles is the model for food truck regulation. The restrictions are in place only to protect the consumer from unsafe or low quality products (health inspections) or protecting the city from bearing an undue burden (refuse disposal, traffic impediment, etc). None of the regulations have to do with limiting the distance from other businesses or restricting hours of operation.

It's also important that the permitting hullabaloo be kept to a minimum.

What I'm trying to say here is that

this is not a new discussion .

Lots of other cities have had this same decision to make.

Some of them, like Los Angeles, have nurtured their budding entrepreneurs by minimizing regulation and not favoring one kind of food-seller over another.



Other cities (D.C., Boston, Atlanta) have seriously burdened up-and-coming businesses with unnecessary regulations.

Some of these cities have an exploding (and safe) food truck markets and widespread cultural revitalization, which is good for everyone, including brick-and-mortar restaurants. Others do not.

I suppose we've made our decision.

Ian Hoppe graduated from the University of Alabama at Birmingham in May of 2013 with a degree bridging philosophy and economics. He's a Birmingham musician and works for a local electrical engineering firm.