A food truck in Melbourne

I’ve disagreed with Chris Berg from the Institute of Public Affairs before (see Are ‘McMansions’ benign?) but he gets it right in his latest Fairfax column, where he argues that Australians are denied enjoyment of street food by “naked, anti-competitive protectionism”.

Other than in Australian cities like Melbourne, he says, street food is everywhere:

Food stands in Belgium and Holland sell chips with mayonnaise. Street vendors in Italy sell croquettes and arancini. Germans can pick up kebabs and bratwursts everywhere. American cities have always had hot dog stands. Now, they are experiencing a food truck revolution – an explosion in mobile food vendors offering everything from Korean tacos to dumplings. Some of the best dining in the US is on the footpaths of the drabbest business districts.

The reason food stalls are non-existent and food trucks few and far between in Melbourne is down to existing food retailers seeking to stifle competition. The City of Melbourne has approved space for only nine food trucks and, moreover, none of them are in the CBD.

The adjoining municipality of Yarra requires food trucks to keep at least 100 metres from existing takeaway businesses.

Yarra’s mobile food vehicle guidelines state the council’s first priority is to support existing traders in commercial premises. By “support”, it means “protect from competition”. Yarra includes some of the best shopping and cultural precincts in Australia. But until last year, food trucks were banned entirely.

Some might argue that access to street food isn’t the most pressing issue in urban policy – to many it might seem like the quintessential “chattering classes” issue. After all, Melbourne barely has any street food yet it still has one of the world’s most vibrant and acclaimed city centres.

In Free the food truck, Edward Glaeser argues quality of life – especially opportunities for consumption – is an increasingly important reason why we live in large cities like his home town of Boston:

Abundant urban consumers enable specialized production, like the chefs in scores of different specialized cooking styles that give cities so much more eating variety than suburbs. As the world becomes better educated and more sophisticated, it craves new experiences — and cities foster the experimentation that makes that possible.

Food trucks are a natural part of the innovative culinary process and they make particular sense for Boston. Boston is a walking city — built on a human scale — and it fits perfectly with eateries that sell on a street corner. Boston is a magnet for immigrants, who often have the skill to create a great meal but not the capital to set up a full restaurant. Boston has a dearth of affordable real estate, and food trucks are a small-saving way of delivering new food options.

The customary argument advanced by existing businesses is that street vendors and food trucks offer “unfair competition”. It’s variously alleged they ignore safe food regulations, underpay their staff, and don’t pay rates.

That’s typical “rent seeker” propaganda. Some street traders might play fast and loose with the truth but so do some restaurateurs. All businesses serving food, including street traders, should conform to health and workplace regulations, pay for the use of public space like footpaths and streets, and avoid obstructing other activities.

It shouldn’t be the business of planners to protect existing traders from competition. The Productivity Commission’s report on the future of retailing noted that preventing the development of new retail formats lowers productivity, reduces employment and raises prices to consumers.

It’s the same sort of “rent seeking” that the Commission says excludes new retail formats from gaining entry to activity centres.  It identified a number of barriers to entry, including limits on the size and scope of centres, prescriptive planning requirements and excessive scope for firms to establish local monopolies and maintain them by excluding new entrants, either with the implicit cooperation of planning agencies or through the courts.

Chris Berg says anti-competitive regulation of street food “reduces consumer choice” and “stifles Melbourne’s culinary identity”. Referring to Boston, Professor Glaeser says:

We should give up on micro-managing the location of every food truck. Instead, public spaces should be rented to food trucks, so the space will go to the truck that values it most. Food trucks can improve Boston’s streets and Boston’s palates — they just need to be free to do so.

If the restrictions on street food protecting the interests of existing traders were relaxed, some of those traders might very well go to the wall. That’s a difficult and complex political issue as the controversy over reform of taxi licence policy illustrates, but it’s also the nature of business.