Kojo reviews Maryland's primary results and what they mean for the region and November's elections. The Supreme Court hears arguments in the case of Virginia's former governor. And a major funder of youth programs in the District is bankrupt.
Diners in the D.C. area can enjoy food trucks that serve everything from lobster rolls to Vietnamese sandwiches. But some traditional brick-and-mortar businesses say those trucks enjoy unfair advantages when it comes to sales taxes. We explore a legislative proposal to change how food trucks are taxed, and why mobile food vendors across the city are organizing to stop it.
- Seth Shapiro Co-Owner, Marvelous Market Capitol Hill
- Kristi Whitfield Co-Owner, Curbside Cupcakes; Executive Director, D.C. Food Truck Association
The Washington Post’s D.C. Food Trucks Twitter Aggregator
We have one to add to the Post’s list – @MarvelousMkt
MR. KOJO NNAMDIWhen it comes to food, eaters across the D.C. area now expect just as much from the city's food trucks as they do from some of its finest restaurants. At every lunch hour rush, mobile vendors across the District are slinging carefully crafted dishes that run the gamut from lobster rolls to Korean-style tacos. But the city's tax collectors may also soon be treating food trucks more like brick and mortar businesses. A proposal discussed before the D.C. council today would require trucks to pay the same sales tax as restaurants, satisfying one of the many gripes from traditional businesses about the new mobile vendors they're competing with.
MR. KOJO NNAMDIJoining us to explore the complicated relationship behind the city's booming food truck businesses and its more traditional stores and restaurants is Kristi Whitfield, co-owner of Curbside Cupcakes. She's also the executive director of the D.C. Food Truck Association. Kristi Whitfield, thank you so much for joining us.
MS. KRISTI WHITFIELDHi, Kojo.
NNAMDIAlso with us is Seth Shapiro. He is the co-owner of the Marvelous Market franchise located on Capitol Hill in Washington. Seth, thank you for joining us.
MR. SETH SHAPIROHello.
NNAMDIWe take your calls at 800-433-8850. Kristi, the food trucks have mobilized the fight against this proposal to impose sales taxes on them. You're the executive director of a coalition that includes the Korean taco truck and the Fojol Brothers truck and more than a dozen others. Why did you feel it was important for your business to organize and what about this proposal do you object to?
WHITFIELDWell, Kojo, actually, we organized -- before this proposal was submitted, we organized not because of this legislation but because as a new industry, we realize that this is Washington, D.C., a city of many special interest lobbies, and there were some powers that be that were trying to quell the food truck industry. There was a movement to put a moratorium on food trucks. There's issues where they want to try and, you know, change the laws. And we just wanted to be part of the conversation. So the D.C...
NNAMDISo you decided to become a special interest lobby yourself.
WHITFIELDIndeed. Someone has to look out for the new little guy on the block, the food trucks. With regard to the tax legislation, we don't...
NNAMDIYou testified this morning.
WHITFIELDI testified this morning in front of Councilmember Evans. We don't actually oppose this proposal to collect sales tax on behalf of the city. What we have a comment on is that this is a piece of the legislation but not the whole conversation. You know, food trucks are new industry in the city, and we need to be regulated like businesses, not like ice cream trucks.
NNAMDISeth Shapiro, I do have to warn you. You start this conversation at a disadvantage. Kristi brought cupcakes. You brought nothing. Well. Capitol Hill...
SHAPIROI have bread. I have bread.
NNAMDICapitol Hill is a pretty competitive marketplace for food. You've got Eastern Market up the street. You've got people lining up at the door at places like Good Stuff Eatery. Where do food trucks fit in to what you would consider to be your competition?
SHAPIROWell, I'm not sure. And it's changing every day. I mean, there's more and more food trucks on the road. I think that our environment at Eastern Market, we've put a lot of effort in the last few years since our fire and things like that to get the customers back. We pay a high price to be there and facility charges and real estate taxes and business improvement taxes. And I think that neighborhoods should be able to figure out where those high traffic areas are and to decide who should be there. There is Eastern Market management folks that decide who should be at the Eastern Market. And the food trucks are not in that realm and -- but they come close.
SHAPIROSo the question is where? Where should they be? What is fair, competitive environment for them? I think in front of my door where others folks have access...
NNAMDIYes, my understanding that last year, you had a little bit of a run in with the Red Hook Lobster's truck.
SHAPIROYeah. And there are two issues here. I mean...
NNAMDITell us what happened.
SHAPIROOne -- you know, one issue is playing fair. And I think we all need to do that, and I think Kristi certainly agrees with that. The next one is then regulations, right? So just in terms of playing fair, well, we had a truck that parked literally in front of our door, and they're a popular truck. They had a big line, and more power to them. It's a fantastic, innovative new way to sell. But people literally couldn't access my building.
NNAMDIPlus, they were sitting at your tables.
SHAPIROSo that's where I got involved. What?
NNAMDIPlus, they were sitting at your tables.
SHAPIROSitting on our tables, using our trashcans and the public space that we all pay for. I pay for public space so people can sit outside of my restaurant. And I think that the folks that are using the public space should maybe go through the public space department we have here in D.C. to try to figure out where they should be or where they shouldn't be. I mean, in some neighborhoods, I think there might be a street or two that they maybe shouldn't be because of the high traffic area, because of the high price of the real estate. And in some areas, maybe downtown, there's a place where they should be. And I think each neighborhood is different and they have to decide that...
NNAMDIIf you'd like to...
SHAPIRO...along with the food trucks, by the way, in which we've talked a little bit about.
NNAMDIIf you'd like to join the conversation, call us at 800-433-8850. Do you regularly grab lunch from the food trucks that do business in D.C.? Why do you choose the food they serve over the food you can get from a brick-and-mortar business? And how do you feel about where they should be located? 800-433-8850. Kristi, I interrupted you.
WHITFIELDYou know, I think that we all agree that the regulations are antiquated. The regulations did not contemplate the food truck industry that we have right now. For, you know, from a perspective of a mobile food vendor, you know, for us, we think customers deserve choices. And the idea that we couldn't go into a neighborhood where the rent is high, sort of, gives you a question of, you know, how rich do you need to be to be able to compete in a particular market. You know, we wanna be able to be respectful of the restaurants in the neighborhoods that are there, but we also wanna make sure that customers are also protected from limited choices.
NNAMDIWell, what would you say to the brick-and-mortar businessmen like Seth who is operating across the street from a truck or right next to a truck who says my taxes are paying for the maintenance of the road that truck drives on, my taxes pay to pick up the trash in the -- that the truck customers produce, and the truck gets to compete for my customers without paying those same taxes?
WHITFIELDI would say that the regulations need to contemplate the new way that food trucks work, but I would also say that food trucks do pay taxes. We are all working out of commercial kitchens where we pay rent. We are all paying the same, sort of, you know, insurance and licensing and business taxes that the city obligates us to pay. You know, I think there is a misunderstanding about the cost of doing business as a food truck. I mean, it is admittedly much less expensive than starting a brick-and-mortar store. And many of our food trucks would have wanted to be restaurants, but couldn't afford to do it.
WHITFIELDBut at the same time, I think the fact that we are free riders is inaccurate. We're mostly D.C. residents. We're working in D.C. We're hiring people that work here. We're very integrated members of the Washington community here.
NNAMDIIn the District of Columbia, you are charged $1,500 per year in fees by the District of Columbia, which works out to maybe $120 a month. You seemed to have a nuance position on the sales tax. How do you think sales tax should be applied to food trucks, if at all?
WHITFIELDI don't object to having the same sales tax as restaurants do. The payment in lieu of taxes that you mentioned, and this is gonna get...
WHITFIELD...a little bit...
WHITFIELD... (word?), but, you know, we have to have that for every licensed vendor that's operating. So I'm able to be here with you today, Kojo, because I have employees. Those employees are both licensed. I pay that payment for every licensed employee.
WHITFIELDThe $1,500. And this is one of the things that I was testifying in front of Councilmember Evans this morning, food trucks need to be treated like businesses. And one of the things that we hope if this tax legislation goes through is that it's the first step of treating, you know, food trucks like businesses. It would be as if you asked a restaurant to license their waitresses. And if the waitress wasn't able to go to work, you would have to close.
NNAMDIIndeed, food trucks follow something called Chapter Five of Title 24 District regulations. They have not been updated in 35 years. They have to navigate a pretty complicated set of regulations put forward by the D.C. Department of Consumer and Regulatory Affairs. These rules limit everything from the size of your vehicles to where you can do business to what's known as the ice cream truck rule, which requires that there be customers waiting for you somewhere before you pull up to the curve and sell your product. What changes to these rules, if any, is your organization pushing for?
WHITFIELDWe would advocate as strongly as we possibly could for the creation of what we would call a food truck rule, which would release us from the obligation to have to have a line at all times. You know, again, as food trucks try to grow our small businesses, the idea of a restaurant, if there's nobody there at the time, closing and shuttering is illogical. So, you know, that is our biggest request of the city as they redo of regulations, let us stay parked legally for a period of time at a place and serve our customers.
WHITFIELDMany times, customers tweet us and they say, hey, I'm on the way. And if that happens, it looks like we don't have a line to us. In this new age of technology, we feel we've been hailed. You know, there's no contemplation of an e-hail in the current regulation.
NNAMDICustomers tweet you -- to you. You also send tweets to customers indicating that you are on your way to a certain location, is that correct?
SHAPIROSo that you can be hailed.
NNAMDIWell, so that you can be hailed. Well, Seth, the food trucks clearly are doing a lot of innovative things like tweeting to win customers. Have they forced you to do anything different to, so to speak, raise your game and pull people into your store?
SHAPIROThere's competition everywhere. I mean, and in my environment, it's Eastern Market, it's more than just the food trucks. That is for sure. You mentioned hamburger stands and everything else. So I think we are always looking for a competitive advantage for sure. I guess my concern is the future and how many food trucks there are and where there are going to be and how surrounded we might be by them and how it might change how we do business in the future. We're talking a little, I mean, New York…
NNAMDIAccording to the city, there are now 488 quote unquote "roadway vendors" between you, and in people who are, you know, sidewalk vendors who might be selling clothing and other things, there are, oh, well, over a thousand.
SHAPIROIn New York City, they limit that number at 3,100. Now, again, we don't know how many of those are food truck vendors oppose to ice cream vendors and the like. L.A. has 9,500.
WHITFIELDThere fewer than 30 food trucks as we already...
WHITFIELD...think of them currently in D.C.
SHAPIROBut the question if they are not -- if you don't have to be hailed and if you're allowed to park for four hours on a parking space that's across the street from me in my high-traffic area where I need every parking space I can get. All of a sudden, if there's 30, if there's 90, if there's 120, if there's 500, all the spots are taken. And not only is there competition across the street, but my people can't park. And so we lose out in that way.
NNAMDISeth Shapiro is the co-owner of the Marvelous Market franchise located on Capitol Hill in Washington, D.C. He joins us in studio with Kristi Whitfield, co-owner of Curbside Cupcakes. She's also the executive director of the DC Food Truck Association. We're talking about food trucks and brick-and-mortar businesses, and what kinds of solutions or compromises should be on the table so that they can both do business. Seth, what kinds of solutions or compromises do you think should be on the table that you feel would be fair to both the food trucks and businesses like the ones you operate?
SHAPIROI personally think that the neighborhoods in the different parts of town should get together, whether to ANCs or council members or whatever it is, get together for public hearings with brick-and-mortar people, with neighbor people, with consumers and, of course, with the food trucks to decide what is fair. I'm sure everyone gives a little bit in that situation, but to decide is it -- is there a certain place where the food trucks go in our neighborhood that makes sense? Or the reverse. Is there certain places that we want to safeguard?
SHAPIROWe wanna make sure that if there's more and more food trucks that we don't start shuttering brick-and-mortar businesses eventually, and that would hurt us. And so we're gonna make sure they don't go into specific areas. I guess I would put it to the local communities to decide that. Customers want it, right? It's a great -- they're making great stuff. And so the customers definitely want it, and they have to be able to get to it. But the question is -- I think location is the biggest question. Is 60 feet enough? Is 100 feet enough? Is it one particular block?
WHITFIELDAnd if you decide, if you're trying to make those decisions, you know, I think it is interesting. Kojo, I'd like to just speak to the idea of competition right now. It's an important one. You know, we're a free market society, and the market has shown that there is a demand for these services that food trucks are bringing. And we do believe that people, you know, deserve choice. You know, I run Curbside Cupcakes. That's a company I own with my husband. But there are three other cupcake trucks in the city, who shall not be named, and that...
NNAMDIThey didn't bring cupcakes.
WHITFIELDAnd more on the way. You know, it's my job every day to earn it. And so I feel that we get out there and compete every day. I think that we wanna engage in communities and be a member of those communities.
NNAMDIThat's the part I was about to get to because no one, I think, is arguing with the market system and the fact that there is a demand for the product you're providing. But since we're talking about neighborhoods, what responsibility do you feel food trucks have to the neighborhoods in which they do business? And is that sense of responsibility different for a business like yours that migrates between neighborhoods on a daily basis?
WHITFIELDI think it's unique in that we do participate in a lot of different neighborhoods. I actually live blocks from Eastern Market. So I'm, you know, I'm a member of that community as a patron, and then also as a vendor. I think that we want to be engaged in those conversations and have the way that we can all prosper together. You know, the storefronts in Eastern Market all have opinions. Like if there's many people in the room, you'll have that many opinions.
WHITFIELDSome of them love when food trucks come because the lines that are sitting there and the people that are being drawn to Eastern Market that might not go but wanted a lobster roll or a cupcake perhaps also do shopping there. And so I think that there is a very dynamic relationship between vendors and customers and storefronts that should be encouraged to thrive so that customers benefit, and so that places remain vibrant and that we continue to have choices.
NNAMDIHere is Zachary in Washington, D.C. Please put on your headphones so that you can now hear Zachary on the telephone. Zachary, you are on the air. Go ahead, please.
ZACHARYYes. I am a customer in D.C., and I'm glad to hear from you all mention customers 'cause as a worker, downtown D.C., in an area where there are not a lot of restaurants, it's very nice to have options. And that's something that the food trucks have brought to my particular area of the city. And it's a little disappointing that sometimes, you know, you see kind of some harassment of the vendors, the -- you know, you're -- about where the line is and all these sorts of things. You kind of see the vendors sometimes harassed, and it's like I hope that they don't go away because they give us options. And it's exciting to know that, you know, there's something to eat, particularly in areas of D.C. where there aren't a lot of restaurants. And so I think there needs to be more attention to the customer and our, you know, needs. So I just wanted to bring that to the table.
NNAMDIWell, Zachary, you are evidence that there is a demand that food truck suppliers are meeting. However, one of the things we're talking about is what therefore is their responsibility to the city? So thank you very much for your call. But allow me to move on to May, who is on Capitol Hill. May, you're on the air. Go ahead, please.
MAYHi. Yeah. I live in Capitol Hill, and I'm in the Eastern Market area, too. And I just wondered -- we got a sense of the cost of doing business for a food truck. Kristi said that it costs for about $1,500 per person involved for a month right now.
NNAMDIThat's only in terms of the licensing fee. There are other expenses. But go ahead.
MAYRight. Right. And I just wondered -- you know, I think that -- I'm worried that the food truck fans underestimate the cost associated with creating goodwill at places like Eastern Market, and places that -- you know, the goodwill has been generated by the hard work and the advertising money spent for that. And I just wondered if Seth might tell us sort of on average, you know, what he spends per year to be in a thriving area like Eastern Market.
SHAPIROMost of what I make, I guess. Is that -- well, in terms of the sales tax conversation, we...
NNAMDIWell, obviously, you're paying rent for the space that you...
NNAMDI...occupy, and there is the sales tax conversation.
SHAPIROI'm paying downtown prices over at Eastern Market. I mean, we pay in the $12,000 a month range. I don't know if I'm supposed to say that on air. And we...
NNAMDIYou did. (laugh)
SHAPIROIt's out there right now. And that's basically, you know, we have a decent amount of space, but that's basically downtown prices, and we run restrooms that people use many times even though they're not buying product, and we have to care for those. And the facility charges are enormous, so the margin is very low.
NNAMDIThank you very much for your call, May. We move to Asher in Washington, D.C. Asher, your turn.
ASHERYes. Hi. Thank you for having me on. I am a big supporter of the D.C. food trucks. I really enjoy going to them for lunch. And I have to say that I'm really disturbed with what I'm hearing from the owner of Marvelous Market. Food trucks, we see them harassed all the time, and he has, so far on the show, talked about limits to the number of trucks where -- restricting where they can park. I mean, these types of restrictive policies seem inherently anti-competitive. And I, for one, am not gonna be going back to Marvelous Market, and I used to get my coffee there every day. And I go there every (unintelligible) ...
NNAMDIWell, do you believe that there should be any regulation at all of food trucks, Asher?
ASHEROh, no. No, there clearly have to be regulations. But you don't want to have...
SHAPIROThat's all we're asking for.
ASHER...restrictions to parking. I mean, you look at what's happening in other cities, I know the Institute for Justice is doing a lot with food trucks and parking restrictions in L.A.
NNAMDIAnd, Asher, I'll tell you what we'll do. Let get -- Let's get Kristi's take on this regulation issue. Kristi Whitfield, when it comes to changing the DCRA regulations for mobile food vendors, what are the top priorities of your organization?
WHITFIELDThe top priorities are to make a food truck rule that then exempts us from the ice cream truck rule. That is the first one. The second...
NNAMDIAnd for those of you who have not been listening, the ice cream truck rule is that a truck cannot pull up to any place unless there are customers already waiting.
WHITFIELDThe next one would be the licensing that I was mentioning earlier so that we can be licensed as businesses and hire employees and grow the way that storefronts can employ people and grow. And then I think the third ones are, you know, all the minutia that's not gonna be that interesting to your studio audience, but getting real clarity from the D.C. area and the city around rule so everyone knows so that we don't get harassed. You know, we get calls and people have been calling the police on Franklin Square to say, oh, food trucks are operating illegally. And it's a waste of city resources to send the police. It stops us during a very limited serving time that lunches -- that we have for lunch. And, you know, it costs the city money and it costs us money...
NNAMDIWhat evidence do the callers present that you are operating illegally?
WHITFIELDUnclear. But I think that when the police get a call, they have to respond. So they come and they need to check and then we need to stop our line. Customers wait longer. We, you know, everybody suffers. Those police should be doing something to really ensure public safety. But I think that if the regulations are clear, we could stop abusing public resources and let food trucks run...
NNAMDIWhen you testified this morning, did you get an idea of the timeline that the city council is looking at this in terms of when we are likely to see new regulations?
WHITFIELDThis testimony was only for the finance portion, and I think it's Councilwoman Yvette Alexander's committee who handles the details of the regulations. But I...
WHITFIELDEveryone is saying that this has to happen soon, but soon in the government is not always clear.
SHAPIROWell, that's part of the issue that's going on. We're only talking today in the council is about sales taxes and I think that, I mean, for me, I guess...
NNAMDIThis needs to be speeded up because the food trucks are not slowing down.
SHAPIROWell, I guess so. But I wanna just say...
SHAPIRO...one thing. I mean, one of my concerns about coming on a show like this is to come out like the bad guy. I have no problem with the food trucks and I -- I mean, they're putting out some great stuff, and there's lots of great places where they can be. My only concern is when there's small infractions like parking spaces taken for much longer than the meter or, I mean, just trying to protect everybody so we can all...
NNAMDIJeff in Alexandria, Va., might be a personification of bridging this gap. Jeff, you're on the air. Go ahead, please.
JEFFHi, Kojo. Thanks for taking my call. I love the show. I am the owner of a traditional restaurant in Alexandria, and I certainly understand the concerns of restaurant owners. We're actually looking at it as an opportunity to get a mobile truck or two out there and not only increase our revenue stream, but also get our product out there in areas where otherwise it wouldn't be.
NNAMDIVery interesting. Have you had the experience before of people who own brick-and-mortar restaurants who are trying to get into the mobile food business, Seth?
NNAMDIBoth of you.
WHITFIELDNo, absolutely. I think that, you know, El Floridano, who does the Cuban sandwiches, he was interested in a restaurant and started with a food truck. Salsa brand is a...
WHITFIELDSweetgreen does it. Austin Grill just opened a truck. And I guess this is the other place where it's interesting because, as I said, it's tougher for a food truck to get into the restaurant brick and mortar, but the restaurants could get food trucks, and they're great tools to be out there, and I encourage them all to join the family.
NNAMDIWe're gonna have to see exactly what happens with the city council. Yvette Alexander, we're watching you. We got this email from Karen in Tenleytown. "I know you're in Tenleytown, Kojo. I know you are aware of that fact and that there are few trucks that come up to our end of the city, so taxes or no taxes, regulations or no regulations might be for the trucks remain the same. Why don't you do business in Tenley? We want Korean tacos. We want cupcakes."
WHITFIELDThe Big Cheese truck is parked half a block from us right now. Tell her, come on down and enjoy a grilled cheese sandwich.
NNAMDIThere you go, Karen. Kristi Whitfield is co-owner of Curbside Cupcakes. She's also the executive director of the DC Food Truck Association. Seth Shapiro is the co-owner of the Marvelous Market franchise located on Capitol Hill in Washington, D.C. And I mean it when I say good luck to both of you.
WHITFIELDThank you, Kojo.
NNAMDIThank you all for listening. I'm Kojo Nnamdi.
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