Restricting the ability of food trucks to compete in the food service industry can reduce consumer choice and stifle innovation.
While an influx of tourists make Canada their number one destination this year as part of the country’s 150th birthday celebration, the Competition Bureau is calling on municipalities across the country to give both hungry travellers and locals the convenience to choose mobile food services when they eat out.
In its latest issue of the Competition Advocate, titled “Promoting Fair Competition in the Restaurant and Mobile Food Industry,” the Bureau highlights the benefits of the removal of barriers to operate food trucks and other mobile food services, which increases competition, innovation and consumer choice. These include: attracting new customers; improved street vitality and community safety; development of pedestrian-friendly environments; greater neighbourhood interaction; affordable and convenient food options; and increased employment opportunities.
The publication highlights the large amount of variation seen in the regulation of mobile food services across Canada, which in some cases may disproportionately impact the ability of food trucks to compete with “bricks-and-mortar” restaurants. It offers municipalities emerging best practices to guide regulatory reform:
- Repeal or reduce proximity requirements;
- Limit where mobile food providers can operate only when necessary to achieve legitimate policy objectives;
- Let the market choose economic winners; and
- Avoid overly restrictive operating hours that inhibit the ability of mobile food providers to operate during peak dining hours.
- Mobile food services and restaurants are two differentiated business models that require different levels of investment and offer different levels of service.
- More than 2,200 mobile food services operators in Canada are expected to earn more than $300 million in revenue in 2017.
- With low start-up costs, the mobile food service industry encourages innovation by, and is accessible to, middle-class entrepreneurs, new Canadians and aspiring chefs.
- Fees currently imposed by some municipalities to operate mobile food services are up to $500 per hour.
- The growth of food trucks in Toronto went up from 14 in 2015 to 56 in 2016 by reducing requirements placed on operators. In Vancouver, in 2010, where regulations have been relaxed, the growth of mobile food went up from 17 to over 100 vendors.