Immigrants play an especially prominent role in one of the fastest-growing segments of the culinary ecosystem – food trucks.
Immigrants play an especially prominent role in one of the fastest-growing segments of the culinary ecosystem – food trucks. The food truck industry is substantial and growing, with 35,000 active businesses in America’s cities and growth of more than 20% since 2019, due partly to pandemic-related restrictions on indoor dining.
Food trucks play to the strengths of many foreign-born entrepreneurs, since immigrants often have a comparative advantage in culinary traditions from their origin country but lack the startup capital to open an indoor restaurant.
Immigrants own 30% of America’s food truck businesses, which frequently represent a first step toward launching a restaurant, a new Bush Institute-SMU Economic Growth Initiative report found. Numerous immigrants, such as Nong Ponsukwattana of the popular local Thai restaurant chain Nong’s Khao Man Gai in Portland, Oregon, have built large businesses that started as food carts.
Food trucks also offer a compelling case study on the benefits of being a great city to start and build a business. Regulations governing food trucks vary widely across U.S. cities. Annual compliance costs range from $5,000 in relatively permissive cities to $38,000 in cities with more onerous rules, according to a 2019 U.S. Chamber of Commerce Foundation study.
Cities ranking low on the study’s index of local regulatory environments – like Washington, Boston, Seattle, Minneapolis, and Chicago – go far beyond food safety rules. Regulations include proximity to local restaurants and parks, accessibility to public restrooms, and even, in Washington’s case, regulations on meatless burritos.
Comparing low-ranked Chicago to relatively permissive Portland, Oregon illustrates the vast effects of different policies on local food truck industries.
Chicago prohibits food trucks from remaining in one location for more than two hours and restricts proximity even to vending machines. The number of food trucks operating in the city fell by half by 2019 from 2012. By contrast, Portland decided food trucks would add vibrancy to the city’s lively street life and introduced one of the most industry friendly regulatory frameworks in the Nation, including dedicated parking spaces around the city.
Multnomah County, home to Portland, now has more than 1,000 licensed food truck businesses, 51% of them owned by immigrants. The city of Portland has more than 25 times as many food trucks per capita as Chicago. Even though Chicago’s rules are presumably intended in part to protect incumbent restaurant owners, Portland has twice as many indoor restaurants per capita as Chicago and ranks well ahead of far-larger Chicago in two of three rankings of “best foodie cities” that we cite in this report.
Liberalizing food truck rules is a win-win for cities – good for immigrant and native-born entrepreneurs and good for consumers who enjoy the resulting culinary diversity and lively street life.
The food truck case points to a larger takeaway: Reforming unnecessary regulations can provide a surprisingly large stimulus to local entrepreneurship, with benefits for immigrants and native-born people alike.