Washington D.C.’s Burdensome Regulations Turn Up the Heat on Food Truck Industry

Opening a brick-and-mortar restaurant in Washington, D.C. can be a costly affair.

For many entrepreneurs working hard to get their business off the ground, spending hundreds of thousands of dollars simply isn’t in the cards. That’s where food trucks come in.

Kirk Francis, owner of the Captain Cookie & the Milk Man food trucks in Washington D.C. mused, “a lot of people who had good cooking skills and good ideas that didn’t have the capital to launch a half-million dollar restaurant were able to spend $50,000 instead and launch a food truck.”

Some food trucks and carts like District Taco, Abunai Poke, Arepa Zone and BBQ Bus have seen their businesses take off, culminating with the opening of actual restaurants.

Young people want more choices in dining, and the availability of food trucks is hugely important for consumers. It’s also an additional engine for generating economic growth.

Rather than encourage this rise in innovation, the D.C. local government has responded with a series of burdensome regulations, stifling the region’s once-growing food truck industry.

The Capital of Food Truck Regulations

According to a report from the U.S. Chamber of Commerce Foundation, D.C. ranks second among cities with the worst regulatory burdens on food trucks in the country.

Beginning in 2013, the D.C. Department of Consumer and Regulatory Affairs began requiring food trucks to pay a $25 fee to enter a drawing for permission to park at prime locations around D.C.

Truck operators pay an additional $150 a month should they decide to use their assigned locations.

Then, just a few weeks ago, the DCRA suddenly announced a new change to the city’s regulatory policy: food truck operators will only be able to enter one food truck into the monthly lottery.

Previously, food truck operators could enter as many food trucks into the drawing as they wanted.

For some food truck entrepreneurs who own and operate multiple trucks, locking down a parking space at a popular location each month is part of their business model.

As Francis notes in the Washington City Paper,

To suddenly be cut out of the most profitable vending locations is a huge financial blow that will likely mean mass layoffs of staff that would normally be working on our trucks, in addition to potential bankruptcy for businesses that have been losing money in order to be ready and fully staffed for busy season. This regulation change says that you can only have one truck in D.C.’s busiest areas.

While DCRA claims the recent changes were to combat bad actors who enter multiple “ghost trucks” in the lottery where only a few trucks are in operation at a time, the food truck owners see the DCRA’s reaction to this issue as punishing all food truck operators.

The Future of D.C. Food Truck Regulations

The DMV Food Truck Association was quick to react to the new regulations, sending a letter to the DCRA opposing the changes. The DCRA has yet to respond.

The D.C. Department of Consumer and Regulatory Affairs should focus its energy on making the District a friendlier environment for entrepreneurs like food truck operators, and make it easier to do business, not harder.

These new regulations, while perhaps well-intentioned, will have real consequences for small business owners trying to make a living, some of whom may be forced to sell off trucks, lay off staff or even shut their doors for good.

D.C. would do well to scale back regulations on food trucks and follow less heavy-handed food truck permitting.

Instead, it should aim to adopt less burdensome regulatory guidelines similar to those cities where food trucks are prospering, such as Portland, Denver, Indianapolis and Orlando.

These cities have a more streamlined licensing and permitting process with less stringent restrictions on food truck operations, creating a more competitive climate for entrepreneurs to succeed or fail on their own.

Washington, D.C. is a top destination for tourists from around the country and around the world. D.C. should take advantage of this status by improving its overall regulatory climate to make it a top destination for entrepreneurs looking to grow their businesses and add value to the local economy.

Author Generation Opportunity

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