Unfair Competition: Food Trucks vs Restaurants

• Business

Are, as many restaurant owners across the country claim, food trucks playing dirty? Do food trucks hold an unfair advantage over restaurants? If the actual answer was yes, perhaps it’s time for the National Restaurant Association to file an unfair competition lawsuit on behalf of their members.

What Defines Unfair Competition?

In the United States, unfair competition is typically applicable when one business (food trucks in this case) gains an unnatural advantage over another entity.

“[U]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are…unlawful.”

So what are these unfair competition practices that food trucks are using to affect commerce? There are different types of unfair competition practices, let’s see if any of them apply.

Different Types Of Unfair Competition

• Intellectual Property Infringement (this includes infringing on copyright, trademark and patent laws)
• Antitrust (if a food truck got too big and was detrimental to a healthy economy)
• Misappropriation of Trade Secrets (a competitor or former employee steals trade secrets, then profits from them)
• Trade Libel (inventing falsehoods about the competition to gain a market advantage)
• Tortious Interference (messing around with another businesses’ contracts)

Now if food trucks were actually involved in any of these practices, we would stand with them and declare that specific truck was unfair competition. But, you really never hear restaurants making these claims, instead they state that the unfair competition stems from food trucks having lower overhead.

Unfortunately that argument hold no water.

Yes, restaurants have higher overhead, but that’s by choice for the honor of having climate controls, tables, chairs and bathrooms.

You who else has lower overhead?

• Amazon.com compered to Borders Books
• Redbox compared to Blockbuster Video
• Uber compared to Medallion Taxis

While Uber is currently facing some backlash from taxi unions and some city governments, I’ve yet to find a single state or local government seeking to ban the sale of online books or merchandise. I have yet to see a cities ban the placement of Redbox kiosks to protect video stores that pay property taxes.

Of course we know why that isn’t happening…those types of laws or ordinances would undermine the free market.  It would stifle competition and public choice.

So what’s different when it comes to food trucks? Nothing!