Food Trucks

Every Thursday, on a busy intersection in downtown San Francisco, you’ll find a bunch of young professionals waiting in line to buy food out of a truck.

FOOD TRUCK CASHIER: Next please! How you doing, boss? 

In a financial district that has struggled to recover in the past few years, this food truck — called Señor Sisig — is a beacon of economic progress. It distributes $15 burritos with lightning speed, as its propane-powered generator hums along at maximum power.

Trucks like this are now a common sight across American cities. These mobile restaurants sell every kind of food imaginable — tacos, pizza, fried chicken, vegan grain bowls, barbecue, Thai, Indian, Burmese — even cupcakes. Some of them have devoted fans who track them on the internet, or seek them out every lunchtime. The trucks pop up for a couple hours, then disappear, leaving behind nothing more than an oil stain and a tumbleweed of discarded wrappers.

When did we start getting so much of our food from mobile kitchens? What’s it like to cook in one?

And is a popular food truck a gold mine?

KIDERA: I think there’s a stereotype. A lot of people there’s no overhead in food trucks. So you’re just rolling in the dough. And that’s very far from the truth.

For the Freakonomics Radio Network, this is The Economics of Everyday Things. I’m Zachary Crockett. Today: Food Trucks.

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Serving food on four wheels is not a new concept.

GELLER: Food trucks go back to the wagon train of people coming west and having to feed people out of one of the stagecoaches.

That’s Matthew Geller. He’s the founding president of the National Food Truck Association. It’s a trade group that represents mobile food vendors across the U.S.

GELLER: We had horse drawn tamale carriages in the 1890s, in Los Angeles that were going out and servicing areas that just didn’t have the food yet because they didn’t have the density to have a restaurant. As the years went on, you saw, as more and more of the suburban areas were going through like big construction booms, food trucks to go out and feed the construction workers.

Geller says that, until around the 2000s, food trucks had a slightly unsavory reputation. They were often called “roach coaches” and were perceived as dirty and low-quality. That was at least partly a result of prejudice —  most food trucks at the time were run by immigrants and catered mostly to manual laborers. But in the mid-2000s, food trucks found a broader market. A new generation of operators started buying trucks and branding them with hip logos.  They used social media to share their location with fans on a daily basis. Food trucks became trendy.

GELLER: Every food truck line was a community event. People talking about it, enjoying it. And then when we started to get a little momentum, then there were two food trucks and then there were three food trucks. All of a sudden, it was, like, a fun space to hang out for your hour after work or your hour during lunch. And all these people are bouncing into each other like, “Hey, I’m going to get the Korean tacos from Kogi — you go get the burger from Baby’s Badass Burgers — and then we’ll share!” And that really invigorated the industry and grew the industry so fast.

Today, that industry is worth more than $2 billion dollars. It’s estimated that there are between 35,000 and 50,000 food trucks in operation all over the country. They range from unmarked trucks that sell tacos at construction sites, to gourmet operations offering $23 lobster rolls to tech workers. Starting one of these businesses isn’t cheap. You can expect to spend at least $60,000 for a new, fully-outfitted truck. The fanciest cost more than a quarter of a million.

GELLER: When you think about the square footage of a restaurant versus a food truck, I would say per square foot of cooking area, a food truck is definitely more expensive.

And there are ongoing operational costs. Many food truck operators rent out a kitchen to prep their food before hitting the road. In a major city, these so-called commissary kitchens can cost more than $1,000 a month.  Then you have to pay to park your food trucks somewhere overnight. You need gasoline to drive the truck, and propane or diesel to run the generator that powers everything inside of it. There’s labor, maintenance, commercial auto insurance, liability insurance — and, of course, the food itself.

GELLER: When McDonald’s buys beef, they’re buying it in a bulk that we could never imagine. When Aramark, Sodexo or Compass — the three largest food service providers — are managing a cafeteria in a hospital or a office park, they’re buying bulk. When a food truck buys short rib, they’re going to go buy 12 pounds for the day.

But starting and running a food truck is still much cheaper than a brick and mortar restaurant. And the business attracts a certain type of intrepid entrepreneur.

KIDERA: My name is Evan Kidera. I’m the C.E.O. and co-owner of Señor Sisig.

Kidera was born in San Francisco and grew up in the kitchen at his father’s sushi restaurant. He was always interested in the food business. In 2008, he saw the beginnings of the burgeoning gourmet food truck scene.

KIDERA: I was a rapper at the time and outside of my full time job, I was able to go on tour here and there with some of my friends and do shows. We were doing a show in LA and passed by a food truck and there was a line of 40 people at 3 in the afternoon, which at that time for me was pretty mind-blowing.

Kidera returned to San Francisco and started brainstorming ideas for a food truck with his friend Gil Payumo, then a chef at a hotel chain. The duo came up with a distinctive concept — a fusion of Filipino and Mexican cuisine. It centered around a traditional Filipino dish called sisig.

KIDERA: Sisig traditionally is made out of pork’s head, using the snout, the ears, the cheeks. And it’s marinated — soy sauce, vinegar, sugar — very tangy, spicy, sweet, very flavorful.  And so we tested that recipe out in a taco.

Once they had the food down, they started looking for a truck.

KIDERA: We spent hours and hours researching food trucks and going to visit every single one that was on Craigslist for a matter of 6 to 9 months. And we found this Chinese food truck that was going out of business, that was selling for $30,000.

It took another $25,000 to retrofit the truck with new equipment, paint it, and commission a logo — an angry-looking pig surrounded by flames. In total, it was nearly a year and a half of work before Señor Sisig made its debut at a roller derby in San Francisco. The payoff was worth the wait.

KIDERA: Immediately upon opening the windows, there was a line. And that line just went on and on and on, and it never stopped until the end of the event. We sold out of every single thing that we had on the truck. It was that wow moment of, “Oh, it’s real now. We can’t go back.”

Today, Señor Sisig is one of the most recognizable food truck brands around San Francisco. The business has 3 trucks, and it deploys them to various locations across the Bay Area every day. Food trucks have a few ways of making money. For starters, they can do private events — like weddings, birthday parties, and corporate luncheons.

KIDERA: That cake can be cut in many different ways. You can charge a flat fee just based on the amount of people that want to be served. It’s like, “We’re going to feed all of our employees and their families” — so that’s just more of a buyout. Whereas maybe for a school they want to just have the food truck there, but they want the attendees to pay, sometimes we’ll set minimums just because we don’t know if it’s going to be a good event or not.

But private gigs only make up around 20 percent of Señor Sisig’s business. The rest of their revenue has to be hard-won on the streets. Some food truck operators use data tools to analyze things like historical foot traffic and neighborhood demographics to try to determine worthwhile intersections. Kidera’s process was a bit more trial and error.

KIDERA: I would go out to the locations downtown and sit there from 11 to 2 and one, do some just visual observation. But I also would have a clicker, and we kind of just get a feel of what the flow of traffic was for each individual location.

Finding a good location to set up your truck is perhaps the most important part of the business. But it can also be a bureaucratic nightmare.

GELLER: So if you’re parking next to a building, everybody in that building, you know, 3D vertically, gets a say in whether you get that parking space. 

That’s coming up.

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For Señor Sisig, the courtyard outside of the Salesforce Tower in downtown San Francisco is a prime location.

EDWARDS: There’s always people here. There’s always meetings happening here in the middle of all the Salesforce buildings. The transit center is right there.

That’s Mariel Edwards, the operations manager for Señor Sisig. She says the staff’s day begins long before the customers start lining up. The meats are cooked daily, starting at 4 or 5 in the morning. By 7, the truck staff is in the commissary kitchen, chopping onions, prepping beans, and blending fresh cilantro cream sauce.

EDWARDS: They prep the meats, you know, get it all packaged up.  And then the truck lead, who today is Andrea, she comes in around 8 and gets the truck ready to drive off. So make sure the things are loaded, nothing is going to fall off. She’s got gas, she’s got propane.

Orchestrating the operations of a mobile restaurant comes with some challenges.

EDWARDS: We’ve had a deep fryer fire happen. Yeah. And they actually had to pull the extinguisher and put it out. I was driving to a location one day, and then the suspension just went out, and I had to  guide the truck off of the freeway.

And in urban centers, parking is always an issue.

EDWARDS: Yeah, we still have to pay the meter — and some meter-maids are cool about it but some will ticket us! Sometimes I’ll just tell the staff, “It’s really not worth you guys stopping what you’re doing — you know, like, we’ll pay the ticket.”

But the biggest hurdle is securing operational permits. On permit applications in San Francisco, you need to identify every location where you want to park.

EDWARDS: You can’t just apply for a permit in the city and park your truck. There’s a lot of things that go into it. 

Permit laws vary from city to city. But in order to operate, a food truck generally needs a business permit, a health permit, and a fire permit. Some places require operators to get a set of permits for every county they operate in. And in a region like the San Francisco Bay Area, where there are a lot of counties close together, permit fees can run to thousands of dollars per year. Again, Señor Sisig’s owner, Evan Kidera:

KIDERA: At one time, each food truck can be holding five health permits, five fire permits — right? — and so on and so on and so on. So it gets pretty ridiculous on the permit fees.

Matthew Geller, of the National Food Truck Association, says these permits are necessary to ensure public safety.

GELLER: You want the build to be safe. As in, you want to make sure that the serving window is out, you know, onto the sidewalk and not out on the street. You want to make sure they’re cleaning up their trash. You want to make sure they’re not blocking sightlines.

But he also sometimes questions who all these regulations are serving.

GELLER: The problem that we have in many locations is that people have decided that protecting public health and protecting public safety is secondary to protecting other businesses’ profits. 

Some cities have made it illegal to park a food truck too close to a brick and mortar restaurant. In San Francisco, Señor Sisig has to be at least 75 feet away — and they have to put a notice to every restaurant in the area before getting a permit approved.

GELLER: Clearly that is 100 percent protectionist and has nothing to do with public safety.

Headaches like this have led to an alternate system for food trucks. In many cities, dedicated food truck parks have emerged. The park operator takes over the hassle of finding land and getting permits from the city, and in exchange, the food trucks pay a fee — typically a small fixed amount plus around 10 percent of their revenue.

GELLER: From an economic standpoint, it’s a better choice for them a lot of times.

Food truck operators, like Evan Kidera have to walk a fine line when it comes to balancing all of these costs. Because customers are only willing to pay so much for food that comes out of a truck.

KIDERA: Yeah, I think that there’s some price sensitivity there. Some people expect tacos to come out for a dollar out of a food truck. 

There’s also a limited tolerance for waiting in line — especially on a work day. Turning a profit depends on quick turnaround. Señor Sisig staff members are trained to serve each customer in around 1 to 2 minutes.

EDWARDS: Where the order starts is with the cashier, taking the order, making sure it gets the order correct, passes the ticket over to our expediting window. And here they’re communicating to the grill cook what’s coming up next. He starts the base of the burrito, then passes it over to the line cook whether it’s, you know, extra guac, no guac, any special mods. She’s also kind of listening to what the expeditor’s saying, so she knows what’s coming up to her line next. Verifies it with the grill and then passes it over to the expediter. One last confirmation from her on what that item is  — it’s pork and chicken, whatever it is — sticks that label on there and then passes it to the customer.

KIDERA: It’s really just go, go, go. It probably compares to a really, really busy kitchen. But working out of a closet-sized space. What we learned is the menu has to be pretty simple so that you can get it out quickly. 

Geller says the true masters of this system are the older food trucks that cater to construction sites and immigrant communities.

GELLER: We call them a route truck. They have the grill top at the back and it’s just easier for one person to do all the cooking, one person to be the window person. And a lot of times the route truck doesn’t have any branding on it. will stop for 30 minutes, feed people at a construction site, go to another spot — maybe hit ten spots for lunch. Their cuisine is assembled, not made. And their ability to serve a quality product with the speed necessary to hit all the locations is unparalleled. They know how to make money from food.

Kidera has a rough standard for how many orders he wants to sell each shift.

KIDERA: Between 100 to 200 would be a pretty good service. We really look for where, you know, hopefully where we’re doing at least say 30 orders an hour.

But he can’t count on hitting that bar every day.

KIDERA: If it’s raining, you’re going to do probably half of what you would do on a sunny day. So it’s very weather dependent, day of the week dependent. Is there a conference in town, is there not? It’s really hard to kind of predict what you’re going to sell when you go out. But there is a bottom line threshold of what we know.

On that Thursday afternoon at the Salesforce Tower in San Francisco, the Señor Sisig truck had 177 orders during the 3-hour lunch shift. That was good for just over $3,100 in revenue. After paying for labor, ingredients, gas, propane, upkeep on the truck, permits from the county, and maybe a parking ticket, that might work out to $300 in profit.

KIDERA: I think most would try to land anywhere between 10 to 20 percent margin. 10 percent’s probably pretty standard. 

Food trucks are a tough business. Geller says that around 65 percent of them shut down within 5 years. Some never quite figure out the mobile business model. Others end up using a food truck as a stepping stone to opening a traditional restaurant.

GELLER: The ones that become really, really successful — a lot of times they go brick and mortar and they leave their truck, or they’ll keep the truck for a little bit for catering. And then they realize they don’t want to do it anymore because it’s too expensive. Some of them just get tired of it.

Evan Kidera opened the first brick and mortar Señor Sisig restaurant in 2019. Today, he has 3 stationary locations.

KIDERA: We didn’t have the capital to start a restaurant in 2010. And we really didn’t have the risk tolerance at that point either to sign a ten year lease on a place that we probably couldn’t afford, right. And so the food trucks are an entry to a business that you can start to grow your brand.

But Kidera says there’s still no feeling like being out on the street, feeding a new crowd of people in a different spot every day. For him, the food truck is a way of life.

KIDERA: We’re always going to continue to be a food truck business. We’re still hungry and we’re still humble.

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For The Economics of Everyday Things, I’m Zachary Crockett. This episode was produced by me and Sarah Lilley and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rabson.

GELLER: God, I love food trucks.