Friday, June 15, 2007

Taco Trucks vs. The Restaurant Cartel in Salinas, CA

In Salinas, CA, a farm town 120 miles south of San Francisco, there are 33 approved food trucks and 240 mobile vendors, which include ice cream push carts (paleteros), flower vendors and other street sellers.

Taco trucks, like the one pictured above in Salinas, are cultural icons and social magnets in Mexico, and provide good, cheap food (see the $1.25 taco above), as well as good jobs for entrepreneurs.

But the taco trucks have become a flashpoint in at least a dozen cities in California — including Santa Rosa, 55 miles north of San Francisco, and Gardena, 15 miles south of Los Angeles — and in other states, like Arizona, Oregon and Tennessee, according to today's NY Times article, "Proposed Ban on Taco Trucks Stirs Animosity in a California Town."

For example, a proposed ordinance in Salinas would phase out mobile and stationary catering vehicles, most of which are taco trucks, by 2011, and would restrict how, when and where 240 pushcart vendors could sell cold prepared foods.

Who's behind the ordinance? Well, it's not too hard to figure that out, it's the "Salinas United Business Association," complaining that the taco trucks have "an unfair competitive advantage."

Translation: the taco trucks have better food at lower prices.

The NY Times quotes a blogger on (website "for those who live to eat") who said, "It really comes down to competition. Why should one class of merchant roll over for another class of merchant?”

Amen. I'd love to live in a city with 33 food trucks competing for my business, and be able to buy tacos for $1.25 like in the picture.

(551 Students: We'll cover this topic of "barriers to entry" at the next residency.)

See a related CD post on the "taxi cartel in Minneapolis."


At 6/16/2007 7:16 AM, Anonymous Anonymous said...

Why is it Democratic politicians, who espouse the virtue of one's [more precisely, a woman's] right to chose, are the first ones to quash that right when it comes to its exercise in areas such as

1. That cited in this post: Economic choice.
2. Educational choice. Democrats favor a government imposed monopoly.
3. Cable TV. Politicians who say they are for "choice" give consumers no choice as they support a government imposed monopoly.

At 6/16/2007 7:34 AM, Anonymous Anonymous said...

Politicians will send armies of government lawyers to fight corporate monopolies then turn around and vote in favor of a government monopoly of health care in the U.S.

Seems rather inconsistent.

At 6/19/2007 11:18 PM, Anonymous Anonymous said...

As a professional economist and frequent customer of taco trucks, it's clear to me that the lower-end food market is among the most competitive markets out there. Barriers to entry are low. There's excellent information about quality. Any taco truck causing a public health danger (or dishing out food that everyone thought was bad) would go out of business.

It is completely arbitrary to start drawing lines between establishments that deserve to exist and those that don't. If a truck isn't appropriate, why not ban establishments that serve on paper plates (as my childhood suburb foolishly does)? Why not ban restaurants that offer entrees under $10? Or those that don't earn a Michelin star? These measures might raise the average quality of restaurants by some measure and support a certain kind of restaurant experience, at the cost of excluding people from competing and taking away an inexpensive food option that customers clearly demand.

There would be no case against the taco trucks even if their food were awful. The fact that the Bay Area raves about Salinas's tacos makes the culinary argument for letting a thousand taco trucks bloom as strong as the economic argument.

At 6/20/2007 4:18 PM, Anonymous Anonymous said...

david kaplan:



Post a Comment

<< Home