Mobile pushcart catering business booming in major American cities

Food vendors and their pushcarts have become ubiquitous in American cities of Washington D.C., New York, Los Angeles and economists believe wide use of smartphones and social media has played a vital role in advancing the mobile catering business.

"We argue that the introduction and proliferation of new mobile communication technologies (e.g. smartphones and social media) have relaxed an information friction complicating the entire food truck business model," Elliot Anenberg, an economist at the Federal Reserve Board, and Edward Kung, an assistant professor of economics at the University of California, Los Angeles, wrote in a recent paper to explain the growing presence of food trucks in major U.S. cities.

Progress of technology and relevant application allow food trucks to broadcast their location information to consumers in real-time, which reduces consumer uncertainty and increases demand for and profitability of food trucks, the economists argued, adding that the growth in food trucks has been associated with increasing interests in smartphones and social media.

Food trucks began growing rapidly in the same year that the iPhone was first released in 2007, and the industry revenues increased 50 percent over five years, reaching 1.5 billion U.S. dollars in 2012, the paper said.

The economists analyzed the Twitter feeds for all individual food trucks operating in Washington D.C. from 2010 to 2013 and found that most trucks posted about their locations on Twitter every day, making them more accessible to customers.

"Many of these location related tweets are used to indicate a change of location due to unforeseen circumstances such as parking and traffic difficulties," they said in the paper.

The Washington D.C. metro area is one of the largest markets for food trucks in the U.S. relative to population, and there are about 367 active food trucks operating here, according to FoodTruckFiesta.com, a real-time automated D.C. food truck tracker.

Anenberg and Kung also noted that mobility has become an advantage for food trucks over brick-and-mortar restaurants as they can serve different consumers each day by switching locations.

"The benefit to being able to serve different locations is that consumers have a taste-for-variety in their day-to-day food consumption and so the food truck can avoid customers which have already been served recently," they said. "With this preference structure, the introduction of mobile technology can make it more profitable to operate as a food truck than a brick-and-mortar, even if the costs of operating are the same." Endite