When I was in Washington, D.C., recently, I saw two food trucks as soon as I hopped off the Metro and emerged from the station. One sold cupcakes, and another sold cheesy food. Right away, I noticed that the two food trucks were parked side by side. We see this in Saint Louis, too — the cupcake and taco trucks often park next to each other.
What makes food trucks do this? Wouldn’t they want to park far away from each other? From the perspective of economics, parking together makes sense.
When they locate near each other, businesses experience benefits. Economists call this shopping agglomeration. Consider a shopping mall. Stores in a mall offer customers a broad array of products, and they likely have more foot traffic and higher sales than if they stood alone.
When food trucks park next to each other, they show the same kind of shopping agglomeration. The nuance here is that although each is a food store, the food may not be substitutes. They could, however, be viewed as complements. Quite likely, the benefits of locating near a busy Metro stop where there a lot of pedestrians outweigh the disadvantages of locating near a competitor. Plus, it’s likely that food trucks catch the attention of more customers when they are parked next to each other than a lone truck would. Look at the photo of the food trucks above — they certainly stick out from the background.
Brick-and-mortar restaurants typically oppose the existence of food trucks, but I suspect that they can benefit from agglomeration, too. This is because many of these food products are complimentary goods, not substitutes. Notice how these trucks are located outside of a brick-and-mortar restaurant. A person could buy a sandwich from the Cosi, and a cupcake for dessert from the food truck without having to travel very far. Instead of one stealing business from the other, it’s very likely that both businesses are benefiting from their arrangement. Local government officials should keep this in mind when they are considering policies that restrict mobile food vending.
