Restaurants, Food Trucks in Turf War

Lori Eanes for The Wall Street Journal Adelina Wong and Michael Hong ate lunch Tuesday from JapaCurry, a food truck some downtown San Francisco restaurant owners have contended is luring away their customers.


Lori Eanes for The Wall Street Journal Adelina Wong and Michael Hong ate lunch Tuesday from JapaCurry, a food truck some downtown San Francisco restaurant owners have contended is luring away their customers.

A food fight is breaking out in downtown San Francisco, with a group of restaurants squaring off against an incursion of food trucks that they say pose unfair competition.

The rift broke out a month ago after a food-truck vendor called JapaCurry began parking in front of restaurants in a South of Market neighborhood, selling to-go meals during the busy lunch hour. “They just showed up right in front of us, and didn’t even ask,” said Jasmine Tran, a clerk at Tart to Tart, a bakery café on Mission Street. “It hurt our business, definitely.”

A dozen other nearby restaurants in the Mission and Second Street area signed a Jan. 21 complaint to San Francisco police asking to keep the vendor from parking so close to them. The complaint prompted the police to revoke JapaCurry owner Jay Hamada’s permit for that street. Mr. Hamada disputes that he posed a business threat because his menu of mostly Japanese curry dishes isn’t offered at any of the area’s restaurants.

“I feel sorry, but I don’t think I’m taking their customers,” said the 40-year-old Mr. Hamada, who started his mobile curry business in November with a $100,000 investment.

Meanwhile, restaurateurs have expressed concern about a possible onslaught of food trucks under a new city ordinance designed to promote their growth. Some 65 to 70 currently ply the streets, according to a city official.

“The food trucks are a threat to us,” said Diane Tran, owner of Muffins, Muffins, a pastry and sandwich shop on Second Street and one of the restaurants that signed the police complaint against JapaCurry. “They park in front of us, take our customers and leave the truck running so we get the smell of gas and smoke in our shop. We wish they weren’t around here, because we don’t do well when they are.”

Ms. Tran said her establishment lost on average 10% to 20% of its lunchtime business when the JapaCurry truck was around—and sometimes more, as evidenced, she said, by as many as 30 sandwiches being left on a shelf after lunch when normally it sells all 60 it prepares.

Officials at San Francisco’s Department of Public Works say they will try to minimize any conflicts when they begin processing food-truck applications under the new rules in March. A city-sponsored workshop on the issue is set for Friday.

“We’re very supportive of small businesses and will work with all the stakeholders,” said Gloria Chan, a spokeswoman for the agency.

In 2010, then-San Francisco Supervisor Bevan Dufty introduced legislation to cut some of the red tape food trucks face on public property and put the Department of Public Works, rather than the police, in charge of regulating them.

The measure, which was debated in public hearings, was passed after Mr. Dufty and other supporters argued it would help promote food options and small businesses in the city. Among the changes, the new rules allow a family to apply for up to seven mobile food permits compared with only one before.

The number of food trucks has shot up since many vendors began offering gourmet selections over the past few years. Three years ago, there was only one such truck in the city but now there are about 40, said Matt Cohen, a mobile food consultant in San Francisco. But he plays down their threat to restaurants.

“If it’s fast food, then there’s some overlap, but if there’s a restaurant that does china and linen it will have a very different customer than someone who goes out for pizza,” Mr. Cohen said.

And some brick-and-mortar restaurants support the trucks. “We do [phoned-in] deliveries, so they don’t bother us,” said Alexandra DeFaria, manager of a North Beach Pizza outlet in the Haight-Ashbury, which sits across the street from a weekly gathering of food trucks called Off the Grid. “As a matter of fact, we walk over there almost every week to see what they have.”

But the restaurateurs on Second Street say that the mobile vendors—which have low fixed costs and few employees—can undercut the prices of traditional restaurants. And they say the number of trucks stands to grow under the new rules.

Although he has received only complaints against JapaCurry so far, San Francisco Police Officer Alfreddie Steward, whose department is handling permits until oversight moves to the Department of Public Works next month, said there could be more conflicts. Restaurants “are going to be a lot more upset because the rules have changed,” Mr. Steward said.

JapaCurry, meanwhile, still has permits for two other streets a few blocks from where it was drawing complaints. A restaurant on Second Street—Sammy’s on 2nd—says the curry truck draws away business on the one day a week when it parks around the corner. “Whenever they are in the neighborhood, I can tell my sales are soft,” said Sammy Zughayer, owner of the convenience store and delicatessen who also signed the police complaint.

Mr. Hamada said he doesn’t plan to return to Second Street. “I know I can’t make everybody happy,” he said. “But I don’t want to make much trouble.”