After the Mexican-style taco joint opened in 2013, it quickly became a critic’s pick in the city’s paper of record, drawing long lines and a devoted lunchtime crowd. As word spread about its juicy al pastor and handmade tortillas, it expanded to nine locations. Then, this September, bad news struck: Los Tacos No 1 had received an undisclosed amount of funding from private equity firm TSG Consumer.
According to a press release, this cash would help Los Tacos pursue “thoughtful, founder-led growth”. Customers were not so sure. Social media posts quickly declared “the beginning of the end” for the chain, half-jokingly anticipating tiny portions of bad food.
Faced with such eulogies, the co-founders promised: “No, we’re not going to start charging extra for guac. We’re not switching to horse meat. And no, we’re definitely not messing with the tacos.” This, too, was met with skepticism and ire.
Critics bemoaning the “same-ification” of New York – the idea that a once lively and creative city has devolved into a suburban strip mall – often blame the same villainous force: private equity. The business model involves firms investing in privately owned companies to grow and restructure them, in hopes of making a profit. Across the country, private equity has hooks in an ever-increasing variance of industries, from hospitals and veterinary clinics to clothing lines and cutlery brands.
Now, some New Yorkers are ringing the death knell for one of their favorite activities, eating out. Baked goods, too, according to the worker-owned food publication Ravenous, which last week examined “the curious case of the soulless private equity cookie”. (See: Crumbl, Levain Bakery.) According to Jaya Saxena, a writer and worker-owner at Ravenous, attractive concepts for private equity investment tend to be restaurants serving food that can be made easily and on the cheap. Plus, customers will literally line up for these eats, as they did this summer in the West Village for Myka’s Greek yogurt or last week at Blank Street Coffee’s new shop in Philadelphia. (Both franchises have received private equity funding.) But other diners stay far away from the queue, believing that restaurants funded or owned by private equity are destined to cut costs, sling slop and adhere to an aesthetic devoid of personality.
You know them when you see them. Sleek but sterile, and lacking any cultural cohesion with its neighborhood. Cashiers replaced by touchscreen ordering stations.
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