New York City Drives Street Vendors to Operate Illegally—Century After Century

Officials have a century-plus history of making life difficult for people trying to make a buck.

Dirty water dogs bought from a cart aren't just a gut-busting lunchtime treat—they're a living for the vendor slapping on the mustard and onions and taking your cash. Pushcarts are a traditional entry-level business in the United States, as elsewhere. They have relatively low startup costs and allow sellers to go to where the customers are, rather than counting on buyers to seek them out. But it's a tough business, and long hours, sparring over locations, and dragging a cart from place to place are only half the story. Places like New York City have created their own cottage industries out of lassoing entrepreneurs—often immigrants—with obstructionist rules that make it ever-harder to make a buck while driving cart operators underground and into the clutches of illegal facilitators who can navigate through a sea of red tape.

Last month, Crain's New York Business detailed how mobile food vending permits have become barriers to entry for people trying to earn a living, with the law breeding an illegal market for pieces of city-issued plastic that grant permission to do business.

"A generation ago, after a few years of hard work and saving, Zamir could have become his own boss. Sidewalk vending was long an option for immigrants eager to improve their lives," reported Jeff Koyen. "That's no longer the case. Today's mobile food vending business is one of day laborers and shift workers who, despite hustling all week long, may not earn minimum wage."

Zamir's boss, a cart operator named Sharif, has been working the same corner for 17 years, owns a cart that he built himself, but rents the use of his permit from its official holder. Permits aren't supposed to be transferrable, but the number available is capped at 3,000 in the cold season, plus 1,000 more from April to October, and there's a waiting list to get one. That creates a market for the permits, dominated by savvy underground permit holders who rent them out to the actual vendors—the going rate was $15,000-$20,000 for a two-year lease, according to a 2013 New York Times piece by Adam Davidson. The official price charged by the city for the permits is $200, but since "an estimated 70% to 80% of permits are illegally in use by someone other than the permit holder," according to Koyen, most vendors are paying a bit more.

The reason for the cap and the underground market it creates is snobbery, pure and simple. People who have already made it don't like the sight of those who are scrambling to climb the economic ladder.

"This is not supposed to look like a souk," then-Mayor Ed Koch complained in 1988 about the lines of carts and customers on midtown streets. He ordered a strict crackdown on pushcart vendors that inconvenienced hungry customers but economically crippled struggling entrepreneurs, some of whose carts were confiscated. "Souk" is just a word for marketplace, which is where people buy and sell goods and create prosperity. If a city isn't supposed to look like a souk, it's hard to visualize how it should look.

The limits Koch put in place are still in effect. But he was hardly the first offender—or the first person to express contempt for the sight of largely immigrant vendors working hard to feed their families.

"[T]he practical disadvantages from the undue congestion of peddlers in certain localities are so great as to lead to a demand in many quarters for the entire abolition of this industry, if it may be dignified by the term," sniffed the Report of the Mayor's Push-Cart Commission in 1906.

Back then, the immigrant vendors were mostly Jewish and Italian, rather than Middle Eastern, so the term "souk" wasn't yet in wide circulation. For a hint of the foreign, the report instead turned to the "padrone" system "by which one man has control of a number of push-carts and also a number of licenses, hires persons to operate them for him, paying them daily or weekly wages, and makes material profits from their operation."

That sounds awfully familiar.

Licenses weren't capped in 1906—6,747 pushcarts operated as of 2004 in a city of roughly 4.7 million people compared to the 4,000 serving today's 8.2 million. But licenses were restricted to vendors who could prove they were citizens, and a great many entry-level entrepreneurs were not. Licenses also came laden with rules, such as a requirement to move every 30 minutes, which vendors eased by bribing police. Then as now, restrictions created fertile ground for an underground economy.

Today, too, permitting rules aren't the only red tape strangling street vendors, Koyen reveals. "At the center of this underground economy sits a loose network of garages known as licensed commissaries where, by law, every food cart must be cleaned and stored each night." The commissaries are often wholesalers of marked-up supplies, too, as well as brokers connecting permit owners with cart operators.

The people Koyen speaks with tell him that, since the 1980s, red tape has made operating a cart much more difficult and expensive. Writing about both food trucks and carts, Davidson agreed in his Times piece. "There are numerous (and sometimes conflicting) regulations required by the departments of Health, Sanitation, Transportation and Consumer Affairs. These rules are enforced, with varying consistency, by the New York Police Department. As a result, according to City Councilman Dan Garodnick, it's nearly impossible (even if you fill out the right paperwork) to operate a truck without breaking some law."

Escalating costs mandated by law, ever-tightening restrictions that lawmakers say are impossible to obey, and rules that drive operators to illegally rent permits—this is an intolerable situation in any context. But imagine trying to navigate this overregulated minefield with an imperfect command of the English language, uncertain status in the country, and a lack of familiarity with a bureaucracy that even native-born Americans find daunting—that is, imagine being the sort of new arrival in this country who is the typical street vendor.

"Regulatory impediments on entry and contract enforcement can be particularly burdensome for migrants" pointed out a 2010 Organization for Economic Cooperation and Development report on entrepreneurship and migrants.

"Immigrants often face language and cultural barriers that prevent them from taking advantage of programs intended to help business owners, or navigate compliance with regulatory agencies," New York's Fiscal Policy Institute remarked in 2014. "When immigrants are blocked by obstacles such as language barriers or unfamiliarity with how to navigate licensing, these limit expansion of businesses."

The 1906 report actually recommended tightening restrictions. These measures "appear to have been unsuccessful," according to the Visualizing Nineteenth-Century New York exhibit assembled by the New York Public Library and the Bard Graduate Center. "In 1913 the Gaynor Committee was called to address these same issues, and in 1917 a letter to the city was written, again addressing the same problems as before."

What eased the situation for pushcarts vendors appears to have been benign relative neglect—interrupted by Mayor Fiorello La Guardia's crusade against street vendors in the 1930s, and then by Mayor Koch in the 1980s. That is, New York City has a century-plus history of making life difficult for people trying to climb the economic ladder via the traditional means of street vending, but has only ever eased their plight when it lost interest in tormenting them.

Given the enormous demand in New York City, as in so many places, for carts vending hot dogs, pretzels, falafel, Jamaican meat patties and so much more, and the opportunity those carts provide for people trying to make a living and get established in this country, maybe it's time for officials to change course. They should admit that a dynamic city should look like a souk, and that any attempt to rein in that vital street life just enables the padrones while kneecapping those trying to get ahead.

Recognizing those facts, and avoiding the mistakes of the past, can make the future both more prosperous and as tasty as an old-fashioned dirty-water dog.