This limit dates back to 1981, when then-mayor Ed Koch cracked down on food vendors and imposed a 3,000-permit cap. The city has a separate cap on “green carts,” or those that sell fresh produce, and forbids vendors from simultaneously holding a conventional permit and green cart permit. Non-food-based mobile businesses are also subject to caps.
Consequently, vendors deal with a black market, similar to the one that once existed for the city’s heavily capped taxi permits. While the price of a food cart permit in New York is $200, cap-induced scarcity drives operators to purchase them from intermediaries, whose markups can reach $25,000. Going the legal route means delay: in 2018, NPR reported the backlog of permits was 1,600 registrations long, including some applicants who had been waiting over 10 years.
One rationale for this crackdown is public health. Dan Biederman, president of the 34th Street Partnership, has advocated stricter regulation on food carts, claiming they violate health codes and calling for as few as one vendor allowed per block. There have been some cases of food carts failing to meet safety standards, but it’s rare: a study in Boston by the Institute for Justice found that they outperformed restaurants in meeting safety criteria.
Another rationale is just plain anti-competitive. Local restaurant associations have criticized any lifting of the cap as dangerous for restaurant jobs. There are studies from multiple U.S. cities suggesting that food carts provide minimal competition to brick-and-mortar restaurants, because they locate in different areas and serve different clientele. That aside, protectionism should not drive public policy; consumers should have the right to buy cheaper food and faster service wherever they want.
But a third argument against food carts — especially in crowded cities like New York — is that they hinder pedestrian access on sidewalks. This is where the city can get more creative in how it uses curb space. Rather than allocating the space for free parking— a common practice even in New York — the city could charge a rental price for any commercial use, be it outdoor dining, bike-share storage and dropoff zones, and yes, food carts. If carts can be set up along curbsides, their spillover traffic is less likely to block sidewalks. Fees that cart owners pay for using the space can be in lieu of their permit fees, and would be a cash generator for the city.
Food carts provide economic opportunity for lower-income residents, as cart costs tend to be in the five figures, much cheaper than leasing a storefront. As Baylen Linneken of the Reason Foundation concluded, “the cap on permits means thousands of New Yorkers who want to sell street food legally — including those with valid licenses — cannot do so for no reason other than that the city refuses to sell them the permits it requires.”
(David Kidd/Governing)
But to realize food carts’ full potential to encourage entrepreneurship, stimulate the economy, and enhance street activity, New York and other cities will need to think bigger. This begins with eliminating the idea that such businesses should be “capped” at all — cities don’t cap their restaurants and grocery stores, after all. It ends with creating more of a market-based pricing system for curbs.
Right now, sidewalks and curbs have lots of uses that don’t produce revenue and aren’t particularly needed. Cities should let food entrepreneurs pay for the right to operate in these spaces, to finally level the playing field with restaurants.
This article featured additional reporting from Market Urbanism Report content staffer Ethan Finlan.
Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
