Emanuel Swings and Misses: Taste of Chicago & Food Trucks

by Alex Levine, April 29, 2013

Le sigh. Chicago has done it again. Just when we think they couldn’t get any slimier in their communications about their actions regarding the food truck industry, they proved us wrong. The city’s politicians and publicists have been hard at work crafting up ways to rebound from the public outcry about last July’s poor food truck legislation and even poorer execution (or lack thereof).

Angry Business Cat summarizes the city's stance better than we ever could.

Angry Business Cat summarizes the city’s stance better than we ever could.

Before we talk about the bizarre announcement in regards to trucks now being welcomed at the Taste of Chicago, we need to talk about what happened leading up to it.

So, about those cooking licenses…

The city is celebrating having awarded 5 food trucks with cooking licenses, tweeting pictures showing a city worker handing the truck their license (see below). Yes, it’s a start! But, at the time this article was published, 279 days had passed since the city voted to do so. On top of that, they are awarding these licenses to businesses with established brick-and-mortar locations and/or new trucks that haven’t been operational in Chicago or ever. Nevermind the entrepreneurs who have poured their souls into getting this industry off the ground in this city. This doesn’t quite measure up with Emanuel’s “commitment to creating the conditions and opportunities that will allow this industry to thrive.” They have scant evidence to support that claim and the claim of spurring job creation, and is doing damage to the “food culture” by not budging from their protectionism and showing at least a smidgeon of respect for our city’s existing fleet.

@RKrim is the Commissioner of Business Affairs and Consumer Protection at the City of Chicago

@RKrim is the Commissioner of Business Affairs and Consumer Protection at the City of Chicago

Instead, they started by awarding the first license to a truck who said he didn’t need the license to serve the menu he designed, and said it was a great “publicity” moment for the city! *facepalm*

****Let us be clear: we harbor no beef (figuratively speaking, of course) with these food trucks; they rock. The issue is the city and their well-documented, long-standing, unabashed protectionism over the brick-and-mortar business model.****

Taste of Chicago Sketchiness

Let’s begin, well, at the beginning. The title of the city’s press release is “Taste of Chicago to Welcome Food Trucks for the First Time Ever.” What does that tell the reader? Never before has the city welcomed food trucks to The Taste even though we’ve had trucks for years. *slow, slow clap*

How about the fact that food trucks are being charged 25% commission and pop-up restaurants are being charged 20%. Based on the city’s calculations, if a food truck owner and a pop-up restaurant each net $9,000 in sales, the truck’s net cash out is $403 less than the pop up restaurant’s purely because of their chosen business model.

"Jessica's waiting to license you, too! @FoodTruckFreak @FoodTruckPages @chifoodtruckz pic.twitter.com/ocIZqsHvfZ" - via @RKrim, Commissioner of Business Affairs and Consumer Protection at the City of Chicago

“Jessica’s waiting to license you, too! @FoodTruckFreak @FoodTruckPages @chifoodtruckz pic.twitter.com/ocIZqsHvfZ” – via @RKrim, Commissioner of Business Affairs and Consumer Protection at the City of Chicago

Also, the language in the application is a bit fuzzy, pointed out keenly by observant @uchinomgo. The application states, “Trucks will be charged 25% commission on gross profits after taxes.” However, their formula shows trucks (and pop up restaurants, for that matter) being charged commission based on gross revenue. We would be shocked if the city took into account the vendor’s food costs and overhead to deduct from the total in order to arrive at gross profit. Instead, they very likely deduct the commission from the money brought in that day, A.K.A. gross revenue. Perhaps the lack of financial gain (and arguably financial strain) for vendors is a large reason all vendors have soured on this event. We contacted the Department of Cultural Affairs and Special Events (@ChicagoDCASE) to clarify but they have not responded.

Also, if you do the math in terms of capacity, food trucks would be hard-pressed to serve $9,000 of food. Can a sweet truck hold 3,000 cupcakes? Can the non-MFP-licensed savory trucks store 1,100+ pre-packaged (by law) entrées? We thinks not. They’ll have to cut into their profits shuttling food from their remote kitchens to the event, further cutting into any potential financial gain with the added cost of employees and gasoline.

While we’re on the subject of math, $9,000 (profit) – 35%+ taxes and fees to Chicago – $3,000 food costs = $3,041 net gain *before* paying themselves, employees preparing and shuttling of food from remote kitchens, kitchen rental costs, packaging costs, and the other costs they incur to do business. So, in the absolutely best case scenario they’ll be leaving with less than 1/3 of their revenue.

One food truck owner told us that there are a lot more additional costs on their end to participate and they’d be lucky to break even if they took the risk of being a Taste of Chicago vendor, and even luckier to earn a few hundred bucks for all their efforts. The 3 trucks who are slated to be there (Jerk, The Salsa Truck, and Porkchop) have 3 of the 5 licenses issued, so perhaps they’ll have better success than the unnamed 4 trucks the city said will be there without such licenses. For their sake, we hope so!

It’s no secret that the Taste of Chicago has been plunging downward year-over-year when it comes to attendance and revenue. Emanuel’s efforts to bring in money backfired, according to the Tribune, “The shortened 2012 Taste lost $1.3 million, according to the city. That left it

deeper in the red than the previous year despite Emanuel’s moves to raise more money by charging attendees at the nightly Petrillo concerts $25 for reserved seats and adding $40 daily gourmet meals prepared by local chefs alongside the sausages and churros usually found in abundance.” So, since Emanuel’s last-ditch efforts didn’t resurrect the Taste, now food trucks can come. That’s like getting an invitation to a wedding a couple weeks before it happens; you know you weren’t even on the Plan B invitation list, and at that point the bride and groom threw in the towel just invited you so as not to have an sparse reception hall.

Lastly, we found it odd that city publicists copy and pasted the mayor’s quote from his last press release regarding food trucks. C’mon guys, look alive.

The Great Food Truck Race

In the press release, the city mentioned the Great Food Truck Race will be filming “highlighting Chicago’s efforts.” See what they did there? They are actually being semi-transparent about the fact that it’s about them and their image, not the food trucks. What the city may not know is that it’s been a long-standing joke among food truck fans that in fact Chicago is the BEST city to come to for that show because it is the greatest challenge. Being a profitable food truck in Chicago is enormously more difficult than most other major U.S. cities largely because of the city’s restrictions on the industry. It would be difficult for them to do the show without facing these issues because most trucks on the shows are not compliant with Chicago laws, but something tells us the city will bend over backwards to portray an image of a healthy food truck industry.

Level the Playing Field

If Emanuel was in fact attempting to repair the Chicago food truck scene and their relations with these small business owners, wouldn’t he consider mending the rifts created by the previous administration and the antics of his aldermen?

In response to asking about the status of the food truck stands.

In response to asking about the status of the food truck stands.

There is a theme that the city seems to be missing out on: granting businesses things that are industry standard (participation in industry events, operational licenses, etc) is not newsworthy. On the contrary, it further underlines that food trucks are treated like second class citizens in our glorious culinary scene. Nice try, Emanuel (and publicists).

APPENDIX

Did you know there has been a lawsuit filed against the city to amend food truck legislation to uphold truck owners’ constitutional rights (no arbitrary government interference, protectionism, and rights to privacy)? Read more here.

Thanks to the Institute for Justice for compiling this information. Who is the IJ and why do we love them so? “As the nation’s leading libertarian public interest law firm, the Institute for Justice engages in cutting-edge litigation and advocacy nationwide to defend individual rights from overreaching government,” – IJ website Simply put, they are the ones fighting the legal battle to get the city on the right side of the constitution when it comes to mobile food vending legislation.

  • Castaneda v. City of El Paso—In January 2011, the Institute for Justice brought suit against the City of El Paso, which stopped mobile food vendors from operating within 1,000 feet of a restaurant or convenience store, and prohibited them from stopping to await customers anywhere in the city.  As a result of the lawsuit, the city passed a new ordinance that eliminated these and other protectionist restrictions.
  • Membreno v. City of HialeahIn October 2011, the Institute for Justice Florida Chapter filed a lawsuit in state court on behalf of street vendors.  These vendors are challenging a law passed by Hialeah, Fla. (located near Miami), that forces them to constantly be on the move and prevents them from vending within 300 feet of any store that sells “the same or similar” merchandise.
  • People v. Ala Carte Catering, a California state court held that prohibiting food trucks from operating within 100 feet of a restaurant was unconstitutional. 159 Cal.Rptr. 479 (1979),

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