Upwardly Mobile

Executive Summary

As old as the country itself, American street vending has never been more prominent.

It’s the subject of television shows, think pieces and—less happily—burdensome regulations in cities coast to coast. Despite vending’s popularity both with the public and as a target for regulation, data about vendors and their economic contributions have been hard to come by. Until now.

To help remedy this dearth of information, the Institute for Justice surveyed 763 licensed vendors in the 50 largest cities in the United States. This report presents the findings of that survey as well as an in-depth economic case study of New York City’s vending industry. It also tells the stories of a diverse group of vendors and their struggles to make a living and grow their businesses. These are real-life examples of how city regulations can get in the way of budding entrepreneurs.

Key findings include:

Vending offers an accessible avenue to entrepreneurship, especially for immigrants, minorities and those with less formal education.

• 96% of vendors own their own businesses.
• 51% of vendors are immigrants, and the average immigrant vendor has been in the United States 22 years.
• Like the cities they serve, vendors are diverse: 62% are persons of color, including 35% who are Hispanic.
• 28% of vendors didn’t complete high school, and 63% completed no specialized training before becoming vendors.

Vendors are hard-working business owners and job creators—just the people cities should welcome with open arms.

• Full-time vendors work, on average, more than 11 hours a day, five and a half days a week, and three out of four part-time vendors hold a second job.
• 39% of vendors are employers, averaging 2.3 full-time and 2.7 part-time workers.
• One out of three vending business owners plans to expand.

Through their economic activity, vending businesses can make sizable contributions to their local economy.

• In 2012, vendors’ contributions to the New York City economy totaled an estimated 17,960 jobs, $192.3 million in wages and $292.7 million in value added.
• New York City vendors contributed an estimated $71.2 million to local, state and federal tax coffers.

New York’s vending industry generates considerable economic activity—but it could do even more if not for the city’s artificial cap on licenses and permits. This cap has kept countless would-be vendors out of business and forced others to operate illegally. Many other cities, including Los Angeles, Miami and Chicago, likewise dampen vending’s economic potential through outright bans and arbitrary limits on when, where and how vendors may work.

Not only do such regulations cost cities economic activity, jobs and taxes, but they also close off an otherwise viable path to entrepreneurship and upward mobility. Cities would do better to open their streets and sidewalks to hard-working vendors who are just trying to build their American Dream.

Introduction

After hundreds of years on America’s urban streets, vending is an “overnight” success—most especially street food. Suddenly, multiple television shows feature food trucks and their innovative fare. ¹

 In 2010, New York Times food columnist John T. Edge declared, “Street food is hip,” ² and a 2009 Washington Post story observed, “Street carts are the year’s hottest food trend.” ³

And the trend shows no signs of slowing down: Celebrity chef and street food aficionado Anthony Bourdain announced plans in 2014 for a New York City market hall that will feature “a dream list of chefs, operators, street food and hawker legends from around the world.” ⁴

Since 2008, the sector has grown an average of 8.4% a year, and revenue, which in 2012 reached $650 million, is expected to quadruple to $2.7 billion by 2017. ⁵

For much of our nation’s history, street vending—or “peddling”—has been a way for lower-income workers, particularly new immigrants, to make a living and climb the economic ladder. ⁶

The industry still holds the same economic promise, but it now attracts a more diverse crop of workers: immigrants, yes, but also ex-professionals, retirees and young entrepreneurs. ⁷

In cities around the country, vendors sell a dizzying array of goods—both food and merchandise—from trucks, carts, tables, stands and kiosks. ⁸

The allure of street vending lies in its low startup and overhead costs. Vending provides an accessible avenue into entrepreneurship—a way to be one’s own boss and to start something that can grow into a bigger enterprise. Among food vendors, for example, it’s common to find young, creative chefs using a cart or truck to test-market ideas, build a customer base and capital and take the first steps toward opening a restaurant. ⁹

Particularly during the recent recession, street vending has also been seen as an escape from unemployment. Michael Wells, co-director of New York City’s Street Vendor Project, reported a surge of calls from people trying to find a new way to make a living after losing their jobs. ¹⁰ Asociación de Vendedores Ambulantes, a vendor association in Chicago, also works with aspiring vendors who wish to start new businesses after struggling to find work elsewhere. ¹¹

This report provides a first-of-its-kind look at the people making a living as entrepreneurs on America’s streets and sidewalks. The Institute for Justice surveyed licensed vendors in the 50 largest U.S. cities. By far the broadest survey ever done of the industry, it reveals that today’s street vendors are bootstraps entrepreneurs: Despite having little formal training, they have built long-lasting businesses and created jobs, often through long hours and hard work. And an in-depth case study of vendors in New York City shows the economic benefits—including jobs and taxes—street vendors can bring to a city.

To date, hard data about street vendors have been scarce, but facts about the industry are increasingly important as cities across the country consider how to regulate vending—and as vendors push back against onerous rules. New York City, despite its storied history of vending, arbitrarily caps food permits and vending licenses, keeping would-be vendors out of work or forcing them to operate illegally ¹² —and fostering a flourishing black market for permits. ¹³

Although home to a thriving food-truck scene, Los Angeles completely bans sidewalk vending, exposing the thousands of Angelenos who vend anyway to citations, fines and even jail time. ¹⁴

Chicago won’t allow food trucks to sell within 200 feet of any brick-and-mortar establishment that serves food, effectively making much of its downtown off-limits. ¹⁵

Miami bans vendors from public parking lots and street parking spaces and forbids them from staying in one place any longer than it takes to make a sale. ¹⁶

Many cities are simply imposing old, ill-fitting regulations on a rejuvenated industry, while others are bending to pressure from businesses in traditional store-fronts that fear upstart competition. ¹⁷

Either way, a better understanding of who vendors are, what they do and how they contribute to local economies is crucial to dispel myths and lead to better policymaking. This report sheds light on the industry not only through survey and economic data but also through stories of men and women in the business and their struggles to survive and thrive.

Laura Pekarik

Chicago

Laura Pekarik is probably not who most people envision when they hear “street vendor.” She is nevertheless exemplary of today’s new class of vendors. With an associate’s degree in business, she is among the 24% of vendors with some college (see Figure 4). And like most vendors (see Figure 6), she had a working life before vending: a successful management career in marketing. Then came an announcement from her sister—cancer.

Diagnosed in 2010, Kathryn Pekarik, Laura’s sister, is one of more than 330,000 Americans ²⁰ with non-Hodgkin lymphoma, a type of blood cancer. Laura and her mother quit their jobs to take care of her. During a benefit to help defray the costs of Kathryn’s medical care, Laura hosted a bake sale, selling 250 of her homemade cupcakes. Friends and family couldn’t get enough of the sweet treats and requested more.

After Kathryn recovered, Laura considered returning to her job but chose instead to go into business for herself. Like many new entrepreneurs, Laura lacked money for a storefront, so she used her entire savings to open the Cupcakes for Courage food truck in 2011. Now, at 3:30 a.m. every weekday and many weekends, Laura begins a long workday that includes not only baking 200 cupcakes to sell from her truck but also overseeing a growing business, ²¹ from which she donates 10 percent of sales to cancer charities. ²²

Like many vendors (see Figure 2), Laura is an employer: Her business employs a dozen staff members. Laura has also branched out to other baked goods and now offers catering and pre-ordering, which requires her to bake up to 500 cupcakes at a time. ²³ In addition, she purchased another truck and opened a brick-and-mortar location in 2012. The store, Courageous Bakery, also serves as a new home for Laura’s food trucks, which continue to operate in Chicago—though not in all of Chicago.

City laws make it illegal for Laura and other food-truck operators to vend within 200 feet of any fixed business that serves food. Because restaurants tend to cluster together on streets and blocks, this “proximity restriction” has made entire swaths of Chicago inaccessible to food trucks. The fine for violating the 200-foot rule goes up to $2,000—10 times greater than the fine for blocking a fire hydrant. To enforce this rule, the city is forcing food trucks to install GPS tracking devices that broadcast their every move.

Seeing the regulations as unjust, Laura joined with the Institute for Justice to sue the city of Chicago in late 2012. IJ argues that in existing primarily to protect restaurants—and not the public at large—the 200-foot rule violates Laura’s and other vendors’ right to earn an honest living under the Illinois Constitution. ²⁴

IJ also argues that the Windy City’s use of GPS devices for enforcement violates the state Constitution because of its anticompetitive purpose and the lack of limitations on the access or use of any data collected. ²⁵

Greg Burke

Chicago

Laura’s company has survived despite the city’s intrusions, but Chicago has managed to destroy other businesses, like Greg Burke’s. An engineer by training, Greg built a flourishing career in the construction industry. And then came the Great Recession. Along with millions of other Americans, Greg found himself unemployed in 2010. As the recession lingered, he struggled to find work in an industry hard hit and slow to recover. With few prospects, Greg took matters into his own hands.

For years at Chicago Bears games, Greg had been frying schnitzel (a hand-breaded and fried pork or chicken cutlet), putting it between two pieces of bread and topping it with grilled onions and peppers. People loved Greg’s sandwiches and told him he should sell them for a living. In 2011, he started to do just that. He bought a vintage 1970s Jeep with his life savings, converted it into a food truck and became the Chicago Schnitzel King. In so doing, he joined the ranks of tens of thousands of street vendors, most of whom sell food (see Wide Variety of Food & Merchandise).

Greg and his wife, Kristin, built a popular business, but the city’s draconian laws drove them away. “We had a strong, loyal following,” Kristin said. “Unfortunately, because of the restrictive food-truck laws we couldn’t make enough money to survive and support our growing family.” ²⁶ The Burkes moved to North Dakota in 2014— the Chicago Schnitzel King is no more.

Yvonne Castaneda

El Paso, Texas

A similar fate almost befell Yvonne Castaneda of El Paso, Texas.

On a typical day, Yvonne awakens at 5:00 a.m. to begin preparing food for her business. She buys ingredients from a local supplier and then takes them to a commercial kitchen where she prepares delicious, low-cost burritos greatly in demand by her regular customers. From there, she loads the burritos into her food truck and begins her route. Yvonne’s business, like most vendors’ (see Figure 12), is mobile. Most days, she will stop at parks, construction sites and a local plasma center. Before the end of the day, she’ll sell more than 50 burritos and an assortment of soda, candy, potato chips and other prepackaged items. ²⁷ Mexican food is a staple among food vendors in the United States, though today’s vendors offer a variety of foods and other goods (see Wide Variety of Food & Merchandise).

Although Yvonne stops vending at around 4:00 p.m., her workday won’t end until about 6:00 p.m., when she has finished unloading and cleaning her truck and preparing for the next day. On weekends, she orders food and supplies for her business and completes hours of paperwork and accounting. Yvonne’s workdays and weeks are long, but such commitment is typical among vendors (see Figure 9).

Like most vendors (see Figure 5), Yvonne has had no formal training in the industry, other than a food handling course required by the city and an optional business management course offered by the health department, but she learned quickly and her business grew steadily. She is proud of the business that she started in 1996, proud that on 50 burritos a day she can cover all of her expenses and still support herself, her husband, Hector, who was put out of work by a severe on-the-job injury, and their daughter, Destiny. As it has for countless other mobile vendors across the country, owning a food truck has offered Yvonne a gateway to self-sufficiency and entrepreneurship. ²⁸ But this path was very nearly closed to her and other El Pasoans.

In 2009, city leaders effectively turned El Paso into a no-vending zone with the adoption of a new food-truck law. ³¹

The core of the law was a proximity restriction prohibiting mobile food vendors from selling food within 1,000 feet of a brick-and-mortar restaurant. Making matters worse, the law also prohibited mobile vendors from stopping and waiting for customers, meaning they weren’t allowed to park in one spot during the lunch hour and serve food steadily to customers. Instead, vendors had to keep driving constantly unless a customer happened to see them and flag them down; once finished with a transaction, vendors had to get back on the move immediately. ³²

For any vendor, but particularly for a food vendor, successfully operating under these kinds of parking restrictions is utterly unrealistic. Even with prepreparation completed prior to driving a route, serving food from a truck or cart requires equipment setup, last-minute food preparation and packaging, cleanup and other related activities that make a constant motion model of vending impossible. This logic was, however, lost on city inspectors, who enforced the new law with hefty fines. ³³

As a result, Yvonne was pushed out of locations where she had vended for years. As it is for many business owners, particularly retailers, location is a key factor in a vendor’s success. Vendors like Yvonne typically choose to operate in business districts (see Figure 13)—the very spot in El Paso that was now off-limits. Yvonne sought solutions, like paying to park in a private lot, but nothing she tried effectively attracted customers. ³⁴ Her sales, previously enough to support her family, deflated to half their normal volume. Before the new law, Yvonne’s daily take was approximately $450, which left her with about $300 after expenses. Slashing that in half left her struggling to make ends meet. ³⁵

For almost two years, Yvonne tried to work within the new law, but, facing the real prospect of losing the ability to provide for her family, she partnered with IJ to sue the city of El Paso in early 2011. Just a few months later, city officials voted unanimously to lift most of the 2009 restrictions on mobile food vendors, including the 1,000-foot proximity restriction. ³⁶

Fortunately for Yvonne, attempts at economic protectionism by city leaders did not cast her out of work, but Atlanta vendors would not be so lucky.

Larry Miller

Atlanta

For almost 30 years, Larry Miller had been a fixture at Atlanta Braves games, not as a player or a spectator but as a vendor selling shirts, hats, jerseys and snacks to fans. On Opening Day 2013, however, Larry and other vendors arrived only to be run off by police with threats of fines or arrest, ³⁸ all thanks to Mayor Kasim Reed.

Larry began vending in 1985, selling T-shirts at the old Atlanta Stadium. He expanded with a table and additional merchandise—all the while paying the required fees and taxes. ³⁹

Larry’s 30-year tenure is more than triple the average of eight years in the vending business (see Longevity & Future Plans).

Game days are long for Larry—usually about 14 hours. He arrives at the stadium four hours before game time and stays until everyone has left, usually three hours after the game has ended. Preparations add several more hours: The truck must be loaded, ice and water picked up from a wholesaler and peanuts cooked the night before. Post-game, he cleans and restocks.

Larry’s small business allowed him to purchase a home, raise a family and create employment opportunities for others. ⁴⁰ As he put it, “For generations, street vending has been a way for people in Atlanta to work hard and climb the economic ladder.” ⁴¹

Unfortunately, city officials seemed intent on cutting off this path to upward mobility.

The dust-up leading to Larry’s banishment from Turner Field began in 2009, when the city gave a street vending monopoly to a multi-billion-dollar Chicago-based company, General Growth Properties. GGP’s plan included building metal kiosks adorned with paid advertising throughout Atlanta, evicting vendors who already worked at those locations, and then renting the kiosks to vendors for up to $20,000 per year. ⁴²

This is a vast sum, especially given that the average full-time, year-round street vending business generates a modest $35,000 in annual profits (see Table 1).

Arguing that Atlanta’s actions violated the Georgia Constitution, Larry worked with IJ to sue the city. The court agreed with Larry in a December 2012 decision, ⁴³ but victory was short-lived. The following spring, Mayor Reed cracked down on most of the city’s vendors, refusing to let them operate. ⁴⁴

Dozens of thriving businesses were shuttered overnight.

Although Larry was able to find a private lot near Turner Field from which to vend, the location was terrible. “Where I normally saw thousands at my old location, I saw only a few hundred,” Larry recalls. “I lost 90 percent of my business. I could not make my house payments, and my house went into foreclosure.” ⁴⁷

Larry and IJ sued again to force Atlanta to let people work under the city’s original vending law, which the court’s earlier decision had restored. They won again, with the judge ordering Reed to fulfill his duties, ⁴⁸

but the mayor still refused. Within minutes of a 2013 contempt hearing prompted by IJ’s requests, the City Council approved a new vending law. It was not until early 2015, however, that the city adopted an ordinance enabling Turner Field vendors to return to work. In 2017, vendors’ livelihoods will again be disrupted as the Braves move to a new stadium in nearby Cobb County. ⁴⁹

It remains unknown whether vending will be permitted at the new stadium and, if so, under what conditions.

Now aged 65—a senior member of an industry that already skews older than the general workforce (see Figure 17)—Larry could retire, but he has other ideas. Like many vendors who own their businesses, Larry is planning for his business’s future (see Figure 3).

Given the coming changes to Turner Field, Larry may opt to spend summers at Falcon Stadium, where a new professional soccer team will be kicking off in 2017. ⁵⁰

“I will have to get creative. I don’t know anything about soccer,” he laughs, “but I am learning. They are probably going to have one famous player that will mean good jersey sales.”

Jeri Wingo

Los Angeles

Atlanta’s tumultuous history of regulatory fits and starts and capricious enforcement is not unique. More than 2,000 miles west, Los Angeles, too, has been the scene of a decades-long struggle over the freedom to work in public spaces, a struggle Jeri Wingo has witnessed first-hand.

Jeri creates and sells custom buttons. Around her community, buttons are worn widely to make political and cultural statements and facilitate conversation about current events. Using her skills as a graphic artist, Jeri designs buttons tied to significant people or incidents, community celebrations or vigils held in the park where she most commonly vends. She also creates buttons for regular customers by special request. “When I see someone wearing a button, I know instantly if it’s mine,” she says. “No one makes buttons like I do.”

Every Sunday, Jeri wakes early to load her car with her wares and drive to Leimert Plaza Park, where she sets up a table and canopy to serve the plaza’s many visitors. A major hub of black culture in Los Angeles, the Leimert Park neighborhood attracts artists and performers with its galleries, museums, performance venues and other arts-related establishments. The plaza itself serves as a place for people to meet up, play chess, participate in drum circles and watch children play Double Dutch. ⁵¹

Its iconic status draws visitors from all over the country and even the world—it’s the perfect setting for a vendor like Jeri to sell her products.

Jeri also vends at special events, holiday celebrations, vigils and other gatherings, but she works part time so she can also pursue acting—the reason she originally moved from Grand Rapids, Mich., to Los Angeles with her two daughters in 1985. When show business prevented her from fulfilling her family responsibilities, Jeri put acting on hold. In the meantime, she worked other jobs and took some graphic arts classes, which she used to begin making and selling buttons in 1990.

Jeri’s vending was intermittent until 2010, when she began working weekends regularly. By then, her daughters were grown and she could refocus her efforts on acting. Regular vending enables her to support herself while also providing the flexibility to take auditions and accept jobs. Although most vendors work full time, Jeri is one of about a third who vend part time. Of these, many work other jobs (see Figure 7).

Acting is a difficult business to break into, but vending is not without challenges of its own. As Jeri notes, “I would vend more often, but it’s so much trouble. I set up somewhere and police come and shut me down. Business owners run me of because they don’t want me in front of their building.” She has not been arrested, but not every vendor is so fortunate.

Los Angeles is home to thousands of sidewalk vendors selling fruit, pupusas (tortillas stuffed with cheese, pork and beans), bacon-wrapped hot dogs and goods like cell phone accessories and T-shirts. ⁵⁴

One city report estimates that 50,000 vendors work on city sidewalks, with 10,000 of them selling food. ⁵⁵

Altogether, they generate an estimated $504 million in annual sales. ⁵⁶ Yet, and somewhat surprisingly given Los Angeles’ exemplary food-truck laws, ⁵⁷ vending on city sidewalks is illegal, punishable by misdemeanor charges and $1,000 penalties—and the L.A. City Council voted in July 2015 to reinstate a ban on park and beach vending. ⁵⁸

In 2013, more than 1,200 vendors were arrested and close to 300 citations were issued by the Los Angeles Police Department and Bureau of Street Services. ⁵⁹

City officials have tried many times over the years to legalize and regulate sidewalk vending, never with any success, ⁶⁰

In 2014, however, a new effort began following a motion by City Council members Curren Price and José Huizar ⁶¹ and with support from the Los Angeles Street Vendor Campaign. ⁶² Early plans included permitting scheme requiring training devised by the city’s Economic and Workforce Development Department; a food vendor certification offered by the county Department of Public Health; city business tax registration; an EWDD assessment; and location and time assignments from the departments of Public Works and Recreation and Parks. ⁶³

Committee meetings at which early plan versions have been discussed have drawn hundreds of people—vendors, including Jeri, community members and interest group leaders—all asking questions, making arguments for or against and monitoring the progress of the effort. ⁶⁴ Whereas the pro-street vending camp argues that vendors’ rights are being infringed, reform opponents protest that vendors pose unfair competition to brick-and-mortar shops and restaurants and predict enforcement problems for any legal vending program. ⁶⁵

As of this writing, no ordinance has been adopted, and so the ubiquitous yet often illegal vending continues. But in Leimert Plaza Park, for now at least, Jeri and other vendors work with little interference. Jeri continues to sell her buttons each weekend—paying local homeless men to set up her table and canopy—and interact with the scores of visitors who crowd the plaza. “Vending is fun to do,” Jeri says. “I like to talk to people, and from the money I make from visitors I buy food from other vendors to give to the homeless in the area. The money kind of circulates around the park.”

Silvio Membreno

Hialeah, Fla.

Although the statistics in this report come from America’s 50 largest cities, many findings likely apply also to vendors in other cities. For example, Hialeah, Fla., a city in Miami-Dade County, is home to a robust vendor community offering goods including churros (fried dough pastries), produce, bottled water, guarapo (a sugarcane drink) and—Silvio Membreno’s specialty for the past 16 years—flowers. Silvio prepares bouquets of flowers and sells them from the back of his van in a private parking lot. He specializes in roses but also sells sunflowers, orchids and other varieties. ⁶⁶

He has built up a clientele that values the quality flowers he provides at reasonable prices.

Like countless immigrants before him, Silvio came to the United States in search of better opportunities for his young family. Silvio, who arrived from Nicaragua in 1998 at the age of 36, never imagined he would abandon his native country, but after years of war, corruption, dictatorship and economic turmoil, ⁶⁷ he knew he could not raise his family there. Silvio’s immigrant status means he is in the majority of vendors (see Figure 16); his Hispanic ethnicity puts him in the second largest racial or ethnic group among vendors (see Figure 15).

After arriving in Hialeah, Silvio worked in construction but found it difficult to balance work against his children’s needs. He saw in Hialeah’s active street vending scene a way to provide for his family while enjoying the flexibility he needed as a single father. He also identified a gap in the market for quick-service, fresh-cut flowers. Soon, he began vending on the side, and eventually he left construction altogether.

Seven days a week, Silvio is up at 5:00 a.m., arranging flowers in bundles of six or 12. The half-dozen bouquet goes for $5, the dozen for $10. By 7:00 a.m., he is selling flowers to drivers who wave him over while stopped at a red light or to customers who pull into the parking lot. He remains until 10:00 p.m., except for short trips to purchase flowers for the next day.

Street vending has been the path to success for Silvio, but Hialeah, like other cities in South Florida, including Miami, has continually erected road blocks to slow him and other entrepreneurs down. In 1994, Hialeah adopted a vending ordinance, later amending it to protect brick-and-mortar businesses from competition. The centerpiece of these regulations was a proximity restriction that made it illegal for vendors to work within 300 feet of any store selling “the same or similar” merchandise. ⁶⁸ In other words, street vendors like Silvio had to stay a football field away from any store with which they might compete—not to protect public health or safety, but to shield entrenched businesses from entrepreneurs who might offer consumers lower prices or better products.

The ordinance also prohibited vendors from standing still: Except during a transaction, street vendors had to keep moving. It banned vendors from displaying their goods anywhere on public or private property. And the ordinance forbade vendors from placing merchandise, supplies or equipment on the ground—even when vending on private property with the owner’s permission. Violating the ordinance could mean fines of $500 per infraction per day. ⁷²

Although he believes in the rule of law, Silvio saw the city’s ordinance as not only onerous but also unjust. So in 2011, he joined with IJ to sue Hialeah for violating his right to earn a living free from unnecessary government intrusion.

Eager to see the lawsuit go away, the City Council changed its statutes in early 2013, ⁷³ but these alterations accomplished little. The proximity restriction was eliminated, but all other rules were left in place. The council also added regulations prohibiting remaining in one place while selling prepared foods, effectively banning food trucks and carts.

Silvio persisted, but 18 months later Miami-Dade civil court Judge Jorge Cueto upheld the city’s regulations. ⁷⁴ Undeterred, Silvio appealed to the Third District Court of Appeals in Florida. As he awaits the court’s decision, Silvio stands seven days a week on the corner of 49th and 4th, West, in sunny Hialeah, selling roses to passersby, just as he has for 16 years.

Twelve hundred miles away, in New York City, another immigrant keeps the same hours as Silvio and sells similarly priced products. Her plans for her business may mean people in Hialeah and elsewhere will be able to enjoy her food without having to visit the Big Apple.

Doris Yao

New York City

In some ways, Doris Yao, the owner of A-Pou’s Taste, a New York City food vending business, defies generalizations. Most of her competitors sell halal chicken on rice; Doris sells Taiwanese pot stickers. ⁷⁵ She’s a woman in a mostly male industry (see Figure 18). Her educational attainment—she’s a college graduate—outpaces that of most vendors (see Figure 4).

In other ways, Doris is the quintessential street vendor. To run her successful fleet of food carts, Doris works grueling 15-hour days, typically beginning at 6:00 a.m. at a commissary where she loads the carts, moving them out by 6:30 a.m. to beat the snarl of Manhattan traffic. At 9:00 a.m., her three carts stationed around Manhattan, Doris and her employees start cooking, propping open the cart windows at 11:00 a.m. to begin lunch service. They keep at it until 5:00 p.m., when they pack up for the return trip. Back at the commissary by 8:00 p.m., the carts are cleaned and food is prepped for the following day, a process that lasts past 10:00 p.m.

Like most vendors, Doris is an immigrant and has prior non-vending work experience (see Figure 6). She came to the United States from Taiwan in 1981. ⁷⁶ Her 30-odd years in the United States put her above the average for immigrant vendors (see Immigrant Entrepreneurs). In Taiwan she worked in fashion. ⁷⁷ Upon arriving in the United States, she worked in a garment factory, but after a few years she started her own line of accessories, eventually building a thriving business. Although lucrative, it was stressful, eventually causing Doris health problems that led to her returning to Taiwan in 2006 to recover and care for family.

In 2010, Doris returned to America and bought an existing food cart that served dishes based on ones from her native Taiwan. ⁷⁸ Before she bought it, the cart was a finalist at the Vendy Awards, ⁷⁹ unofficially known as the “Oscars of Street Food.” ⁸⁰

But when taking over the business, she improved the recipes by eliminating artificial flavoring and MSG, substituting natural ingredients and making everything by hand. ⁸¹ Doris’ improvements were a hit.

A-Pou’s Taste has since expanded into three locations throughout Manhattan, and Doris now employs a dozen people. She insists that they all have vendor and food preparation licenses. She also pushes employees to strike out on their own, which some have done. As survey data indicate, this is not uncommon (see Longevity & Future Plans).

Like that of any small business owner, Doris’ success is a testament to her perseverance through adversity. Working outdoors puts vendors like Doris at the mercy of the weather, but perhaps more daunting are the manmade challenges they face. After completing sanitation training and obtaining the paperwork necessary to serve food, would-be New York City street vendors can apply for permits to work in a park, on private property or at a street fair or market. ⁸²

Getting permission to sell on public property like sidewalks, however, is nearly impossible, as the city has capped the number of unrestricted, year-round, citywide mobile food vending unit (MFV) permits at just 2,800. ⁸³

Last raised in 1981, ⁸⁴ this artificially and arbitrarily low cap fuels a booming black-market trade in permits, as individuals lucky enough to have once received permits continually renew and then illegally rent them out to desperate entrepreneurs. MFV permits, which cost just $200 to renew every two years, ⁸⁵ can fetch up to $25,000 on the black market. ⁸⁶

Not surprisingly, permit holders rarely give them up. And although the city keeps waiting lists for its various MFV permit categories, it can take a while to get through them. The lists, which themselves have caps, ⁸⁷ were last opened in 2007. ⁸⁸

Buying a black-market permit, or chancing it without any permit at all, is many New York City vendors’ only option.

Other city decisions can dramatically affect vendors’ day-to-day operations. In 2013, bike racks sprang up around New York City as part of a new bike-sharing program, forcing businesses like Doris’ out of their familiar vending locations. At her new spot, Doris saw her daily patrons dwindle from 100 to 30, ⁸⁹ resulting in losses of hundreds of dollars a day. ⁹⁰ Most vendors won’t get rich from their businesses (see Table 1), so such seemingly small decisions by city officials can have oversized implications for these hard-working individuals.

Unbowed, Doris plans to expand her business into a line of frozen foods based on her food-cart menu, while maintaining the carts for advertising. When her frozen food business gets off the ground, it will be yet another example of how street vending is a launching pad to expanded opportunities, all to the benefit of the local economy and beyond. Yet, all by itself, New York City’s street vending industry makes a significant contribution to the Empire City.

Street Vending and the Local Economy:

A Case Study of New York City

Walking the streets of New York City, it is easy to see signs of the economic activity generated by vendors like Doris Yao. Doris’ delicious and convenient dishes are the visible results of her carefully honed recipes and culinary techniques—and the long hours she and her employees put in every day. In turn, Doris’ grateful customers provide incomes for her and her employees. Harder to see, but no less important, are the businesses that supply fresh food, paper products and more to A-Pou’s Taste. Also less evident are the grocery stores, clothing shops and other outlets that Doris and her employees, as well as her suppliers’ employees, patronize with their hard-earned wages. Yet all this economic activity starts with Doris. And it is multiplied many times over by New York City’s thousands of vendors.

The direct and secondary “ripple” effects that vendors have on a local economy can be estimated using what is known as economic contribution analysis. New York City makes a good case study because it has by far the largest list of licensed vendors among large cities, providing ample data for such an analysis. ⁹² (Some estimate as many as 10,000 vendors work in the city, though not all are required to be licensed. ⁹³ ) IJ started by asking a random sample of 209 food and non-food vendors for their business expenses for one year—2012. These figures were extrapolated to all the city’s vendors and used to estimate the industry’s local economic effects with IMPLAN, specialized software and datasets used for economic contribution analysis (see Appendix for details).

The economic contributions of street vendors to New York City’s economy in 2012 are illustrated above. First are direct effects, the most visible fruits of vending businesses, which account for the people they hire and the products and services they offer. In one year, New York City’s vendors employed an estimated 16,332 full-and part-time people, including proprietors, and generated more than $78.5 million in wages. ⁹⁴ And vending businesses produced an estimated $82 million in unique value—or “value added.” Value added, similar to gross domestic product, measures the value businesses create beyond the raw or intermediate goods they purchase.

For example, Doris’ value added is everything that goes into transforming pork, cabbage, spices and other ingredients—as well as a host of other intermediate goods—into a hot lunch served up where hungry office workers can easily buy it. That includes the labor of Doris and her employees to buy, transport and prepare ingredients, sell finished dishes and clean up after a day’s work; the recipes and techniques she has developed; and the fees and taxes (like sales taxes) she pays on the business. All that adds up to the unique, visible and edible value Doris’ business directly offers New York City consumers.

Street vendors also contribute to New York City’s economy in less obvious ways, such as by purchasing supplies. An industry’s spending on intermediate goods and services generates indirect effects: Doris’ purchases of food, fuel, cleaning supplies and other things, like rented storage space, she needs to run her business have a ripple effect, supporting jobs and production at her suppliers. In 2012, suppliers employed an estimated 1,150 people and paid $80.3 million in wages to provide goods and services to the city’s vendors. Those goods and services contributed an estimated $155 million in value added to the local economy.

Finally, the vending industry contributes to New York City’s economy through induced effects. Another kind of unseen ripple effect, induced effects come from household spending by employees—both those of the vending industry and those of its suppliers. ⁹⁵ Doris’ business enables her and her employees, as well as her suppliers’ employees, to pay for housing, food, entertainment and more. Their spending in turn supports more jobs and economic activity at the retail outlets and other businesses they patronize. ⁹⁶ Personal spending by New York City vendors’ employees and suppliers’ employees supported an estimated 478 jobs, $33.5 million in wages and $55.7 million in added value in 2012.

Altogether, in 2012, the seen and unseen economic contributions of street vendors to New York City’s economy totaled an estimated 17,960 jobs, $192.3 million in wages and $292.7 million in value added. And through their economic activity, vendors contributed an estimated $71.2 million to local, state and federal tax coffers.

Tax Contributions From Vending

Conclusion

New York’s vending industry makes sizable contributions to the city’s economy, but it could contribute more if the city lifted or eliminated its permit caps to allow more vendors on its streets legally. Thousands of New Yorkers languish on waiting lists. Others would like to join a waiting list, if only it were open.

Meanwhile, tired of paying black-market prices for bootleg permits and despairing of ever obtaining legal ones of their own, some vendors are closing up shop. Adam Sobel, the chef-owner of Cinnamon Snail, one of New York’s most celebrated food trucks, announced in February 2015 that he would stop vending in the city because of permitting problems. ⁹⁷

New York City’s destructive permit caps frustrate the efforts of energetic, entrepreneurial people like Adam and funnel huge sums of money away from value-creating activities, like business expansion and job creation, and into a black market that enriches a few.

Other cities can learn from New York City’s example, both good and bad. Although the Big Apple’s vending population, like its economy and overall population, is far larger than that of most other cities, the New York City case study illustrates how economic effects from one industry can ripple through a community, supporting jobs and economic activity that, while unseen, are nonetheless real. For cities looking to expand economic opportunities, facilitate job growth and realize greater tax revenue, welcoming street vendors is a low-cost and potentially high-reward option. Yet too often, in New York City and elsewhere, burdensome regulation remains the rule.

In 2011, the Institute for Justice catalogued common vending regulations in the 50 largest U.S. cities and found that nearly all large cities had erected major impediments to street vending. ⁹⁸

Like Chicago, 19 other cities enforced blatantly anticompetitive rules barring mobile vendors from operating near brick-and-mortar establishments selling similar products. Eleven cities simply banned vending or certain types of vending on public property. Those bans included Los Angeles’ complete prohibition on sidewalk vending and Chicago regulations that forbade vendors from selling flowers or any prepared food other than ice cream from a cart. A handful of cities prohibited vendors from staying in a single spot any longer than necessary to make a sale, as in Hialeah, Miami and much of the rest of South Florida. Most common among large cities were restricted zones where vending was disallowed—often covering the very commercial, entertainment and sporting areas that are so attractive to vendors.

Large cities impose other types of restrictions, too, and countless smaller cities have regulations of their own. The city planning commission in Turlock, Calif. (pop. 70,000), for example, voted—at the request of the Turlock Downtown Property Owners Association—to ban food vendors from the downtown area. ⁹⁹

And when Noblesville, Ind. (pop. 50,000), adopted a $1,000 licensing fee for food trucks—almost 10 times what nearby Indianapolis requires—the effect was as good as a ban. A year and a half later, zero permits had been led. City planning director Christy Langley remarked, with Midwestern understatement, “It hasn’t been very popular.” ¹⁰⁰

Such hurdles to street vending can close off an otherwise accessible avenue to entrepreneurship. The survey reveals that the vast majority of vendors own their own businesses, as well as the trucks, carts, stands or other structures from which they sell, and many have grown businesses large enough to employ others. The survey results also indicate that vending provides a means of upward mobility for people who might not otherwise be able to break into business: entrepreneurs with less education, those of lesser means and others who may lack ready access to capital, including immigrants and minorities.

The survey findings also suggest that vendors are exactly the types of entrepreneurs cities should want to encourage. Vendors are hard workers and risk takers. Full-time vendors work long days and long weeks, and part-time vendors typically work a second job to make ends meet. Most vendors have other work experience yet take a chance on a new venture, often with hopes of growing a startup into something bigger. Vendors persevere through bad weather, unpredictable foot traffic and regulatory hurdles. Despite such challenges, the average vendor has so far lasted eight years in business.

Some cities have seen the potential that entrepreneurs like these hold. The East Liberty neighborhood in Pittsburgh has worked to increase the number of vendors on its streets. According to Cherrie Russell, a spokesperson for the nonprofit East Liberty Development Inc., the idea to encourage more vending came after she “noticed that there always seemed to be a lot of activity and life on the blocks where the vendors were set up.” She wasn’t alone. Tony Moquin, district manager for a clothing store in the area, observed, “We’ve noticed that a lot of customers come into our store after they’ve stopped to look at what the street vendors are selling. We definitely like having them out here.” ELDI encouraged more vending by offering grants to vendors to offset licensing fees and teaching workshops to vendors on local codes, theft prevention, basic bookkeeping and marketing. ELDI also asked vendors to operate at least three days a week. ¹⁰¹

Similarly, when Harbor Springs, Mich., invited food trucks to town, city officials discovered something quite unexpected: “Food trucks actually bring people downtown as opposed to just taking away from existing restaurants,” observed Tom Richards, Harbor Springs’ city manager. “They become an attraction and increase the number of people in your downtown.” ¹⁰²

And with more people comes increased business for brick-and-mortar establishments, as people who come downtown for the food trucks stumble upon shops and restaurants they’ve never seen before and bring friends and family back for return visits.

When Lakeland, Fla., began holding once-a-month food-truck rallies downtown, restaurant owners feared a significant loss of business. But the opposite occurred. Every time a food-truck rally kicked off, restaurants grew busier. One restaurant owner estimated the first rally produced a 30 percent increase in his business, an increase that remained even after the rally ended. ¹⁰³

Another Lakeland restaurant owner—originally a food-truck skeptic—was so impressed, he identified a gap in the local market and built his own food truck to fill it. “The concept is that it has a brick oven on the truck,” the owner, Giovanni Moriello, said. “It was custom made by a friend of mine who put [it] in the truck. Lakeland doesn’t have a brick oven pizza right now.” ¹⁰⁴

With the increase in traffic at his brick-and-mortar restaurant and the addition of his food truck, this owner will do more business with suppliers, and he may hire more employees to man his truck. His employees and his suppliers’ employees will spend their wages on goods and services in Lakeland. And perhaps in a few years, the employees hired to run the new food truck will be inspired to go into business with a truck of their own. Other cities can likewise unleash such economic potential. It’s as simple as clearing away outmoded and anticompetitive regulations and opening streets and sidewalks to vending entrepreneurs pursuing their American Dream.

Appendix

Study Methods

The study of street vendors has largely been dominated by ethnographic research, ¹⁰⁵ although at least one study of vendors has used survey methods. ¹⁰⁶

The scope of this project—a study of street vendors in the 50 largest cities in the United States—necessitated the use of survey methods, described in greater detail here.

Survey

Sample

The survey sample included 763 street vendors across all 50 cities listed in Table A1. The sample was constructed by securing a list of all licensed vendors from each city. This facilitated the creation of a population of licensed vendors. There are, of course, an unknown number of people who vend in these cities illegally. There are also certain categories of vendors that can work without government permission, therefore resulting in no lists of vendors. By definition, identifying them for inclusion in the population was impossible, which means the findings in this study can be generalized only to licensed vendors.

The sample was constructed as a stratified random sample. The number of participants in the sample from each city was proportional to each city’s percentage of vendors in the 50-city (licensed) vendor population. After proportional quota frequencies were set for each city, vendors from the respective city lists were called randomly until quotas were filled.

Table A1: 50 Largest Cities in The U.S.

Data Collection

Survey data collection by Technometrica, a New Jersey-based polling company, occurred over a three-month period during the fall of 2013. All surveys were completed by telephone. Because of the comparably greater representation of immigrants in the vendor industry, survey questions were translated into multiple languages, and multilingual speakers were used in data collection. Prior to data collection, the survey was pre-tested on a small sample of vendors. Results from the pre-test were used to refine questions for the sake of clarity and precision. The full survey, including basic results, can be found online at https://ijstaging.wpengine.com/wp-content/uploads/2015/10/survey-for-report.1.pdf.

Analyses

The analysis of all closed-ended variables, except expenditure variables among New York City vendors, was completed using descriptive statistics. All analyses were completed using probability and sample weights to reflect the unequal probabilities of participants to end up in the sample and the over- or underrepresentation of vendors in certain cities due to response biases.

Economic Contribution

The economic contribution analysis of vendors in New York City was completed using input-output analysis. The purpose of this type of analysis is to estimate the broader economic benefits an area receives ¹⁰⁷ from a given event or industry by measuring patterns of spending and re-spending within an economy. ¹⁰⁸

It does so by tracing linkages (i.e., the amount of spending and re-spending) among sectors of an economy and calculating the total business activity resulting from a particular sector or industry.

Most often, this type of analysis is used to measure the impact of a new industry, business, product or event in a region. For example, it can be used to predict the amount of production, labor income and taxes generated and the number of new jobs created as a result of building a new factory in a community. However, it is also used in economic significance or economic contribution analysis, ¹⁰⁹ which measures the significance or contribution of a project, program or industry within a local economy. ¹¹⁰ Examples include studies of the economic contributions of sun flower farms, ¹¹¹ petroleum production, ¹¹² agriculture ¹¹³ and others. ¹¹⁴

Like these and other studies, ¹¹⁵ this analysis of the vending industry in New York City was completed using the IMPLAN system. ¹¹⁶ This widely used and nationally recognized tool enables one to input various economic data for an industry or event. Using the linkages between the particular industry and more than 500 other sectors in a region’s economy, it determines the resulting total output, income, jobs, taxes and other effects.

Estimating these metrics requires identifying primary activities involved in the industry and estimating expenditures for those activities. ¹¹⁷ One of the most common methods for doing so is to survey consumers or business owners ¹¹⁸ and ask participants to identify expenditures across various categories. Business owners, for example, would list expenditures for supplies, advertising, payroll and benefits, maintenance and other expenses. ¹¹⁹

In this expenditure-based approach, the “ripple effect” of an industry’s spending patterns is then calculated as the spending and re-spending works its way through the economy of a study area. ¹²⁰

In the present study, vendors in New York City were asked to identify their expenditures across 16 different sectors: office, storage and kitchen rental, vending unit rental/mortgage, vending unit maintenance, gas/diesel, propane/kerosene, employee wages, employee benefits, proprietor income, insurance, permits/fees, food and non-food supplies and merchandise, advertising, accounting services, legal services and communications technology. These categories were identified from prior research and through consultation with working vendors.

New York City was used as the study area for several reasons. First, it has a long tradition of street vendors. Second, among the 50 cities used for the survey, it has the largest population of licensed vendors. Third, the geographic borders of the city are easily defined. Fourth, the area approximates a self-contained local trade area (i.e., local residents typically fulfill most of their routine household needs within the area). ¹²¹ Finally, the study area includes the locations where most of the spending associated with the industry occurs. ¹²² The use of cities as study areas is quite common, as is the use of metropolitan statistical areas ¹²³ and states. ¹²⁴

The specific sample used for the analysis included 209 food and non-food vendors. ¹²⁵ New York City has three general categories of licensed vendors—general merchandise vendors, food vendors and those who are licensed but lack certain permits. The sample was proportionally stratified by these categories and quotas met through random selection. For the economic contribution analyses, participant responses were weighted so that all expenditure totals were inferred to represent the population of 10,000 vendors in the city.

The economic impact or contribution results of this type of analysis are usually reported in several categories: employment, value added, labor income and taxes. ¹²⁶ Employment measures the number of jobs in New York City due to the vending industry. Value added measures the value of goods and services less the intermediary goods required to create products sold to consumers. Labor income is payroll paid to employees plus proprietors’ income. Taxes include federal, state and local tax revenues associated with the industry. ¹²⁷

Each of the categories, except for taxes, is a summation of direct, indirect and induced contributions or impacts. Direct is the value of goods and services purchased by consumers in the industry, typically measured through sales. Indirect measures the jobs and production needed to manufacture the goods and services vendors sell to consumers. These supplier industries purchase additional supplies to meet vendors’ needs, with this cycle continuing until all additional indirect effects are purchased from outside the region under study. ¹²⁸

Payments for goods and services produced outside the study area (i.e., outside New York City) are excluded because these effects impact businesses located in other regions. ¹²⁹ Induced includes spending of local households due to income received through their work in vending and with its suppliers. ¹³⁰

Ordinarily, economic contributions or impacts are determined through the use of sales data modeled as direct effects, from which secondary effects are calculated. Unfortunately, sales data gathered on the survey were not deemed reliable enough for use in the analysis, although another type of direct effect—wages and income ¹³¹ —was reliable and included in the analysis as such. Instead, the results reported above were derived by using the aforementioned vendor expenditures in an “analysis by parts.” ¹³² In this type of analysis, vendor expenditures were modeled as indirect effects and other effects (induced, taxes, etc.) were estimated from there.