Incumbents vs Food Trucks

I was first introduced to the concept of a “Korean taco” in LA a while back where they have lots of Koreans, lots of tacos, and also lots of food trucks whose low-overhead makes it worthwhile to experiment with new culinary concepts. So when the Korean taco came to DC, I wasn’t surprised to find it arriving in food truck form as the Takorean truck. I visited earlier this week, and it’s tasty and an excellent bargain relative to the overpriced sandwiches that litter the city’s downtown. And as I’ve detailed before, the arrival of high-quality food trucks in DC is a relatively recent phenomenon, delivered by loosening the regulatory shackles on the industry.

At any rate, the line for the truck was really long when I went there. And the lines for the lobster roll truck and other new entrants into the market normally seem long as well. Clearly there’s a demand for more food trucks. But there are also incumbent restauranteurs and old-school hot dog stands that don’t like competition and as Tim Cartman details they’re furiously at work trying to get the City Council to adopt new rules that will shut the new kids on the block down.

Bad times.

I think this highlights the fact that we shouldn’t get into a simplistic dichotomy between “demand” and structural issues in the labor market. Right now, America suffers from a huge shortfall of demand and that’s the reason unemployment is much much higher than it was a little while ago. But it’s also true that there are a million tiny labor market inefficiencies caused by things like incumbent food service firms trying to stifle competition. The less someone needs to spend on overhead in order to sell lunch, the more economical it is to hire workers.