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DiGregorio

Six Charged with Vending Violations in Sting (Also: Screw Your Bidding System)

By Sarah DiGregorio, Tuesday, Jun. 30 2009 @ 6:02PM
Comments (8)
Categories: Featured

Six people involved in street food vending were arrested and charged with fraud this morning, as a result of a city-wide sting operation targeting the black market in the vending community. The six were accused of violations such as submitting forged documents to the Department of Health, and renting out carts that would pass inspection to vendors whose own carts would have failed.

This is part of the city's two-year probe into the street vending black market, which has found that at least 500 vending licenses are held illegally, although there are probably far more than that. It's nearly impossible to get one of the 3,100 vending permits that the city allows, and only a handful become legally available each year.

Read related: Trials and Hot Dog Tribulations

Incredibly, Rose Gill Hearn, the commissioner of the Department of Investigation, is quoted in the Times' Diner's Journal saying that the city should respond to the black market by instituting a bidding system for the limited number of permits.

"Under the current system, the permits are so inexpensive and the inspection process is so loose that it creates an opportunity for fraud," she said in an interview. "The city of New York should get the money that's on the table, not black marketeers."

This is an astounding thing to say. Instead of promoting the vending bill that is currently in front of the City Council, which would increase the vending permit cap from 3,100 to 25,000, and thus give more people a chance to vend legally (and net the city more money), Hearn would rather save those 3,100 permits for the highest bidders, essentially excluding the people who have always formed the backbone of the vending community: recent immigrants. Under a bidding system, you could say goodbye to your favorite little taco stand.

No one goes into vending because they're going to make a fortune--a study by the Street Vendor Project showed that most people do it because they feel they have no other choice. Even if you don't speak English well, and don't have an education, you can sell goods on the street to support your family. It's an honorable profession, one that's always been performed by immigrants, but one that's always been the target of anti-immigrant bias.

New York's street vending has been pushed into its current state of chaos and disrepair by unchecked bureaucracy--vendors are regulated by as many as seven city agencies--and unreasonably low permit limits, which were set in 1979 by then Commissioner of Consumer Affairs Bruce Ratner, always a friend to the common man. Instead of cracking down on a broken system that's full of people who are just trying to make a living, why don't we pass the increase on vendor permit caps and give folks a chance to sell legally? If more vendors were within the legal system, it would be easier to conduct health inspections, and other necessary bureaucracy.

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Comments (8)

Danny says:

the bidding system works. The vendors in the NYC Parks and Recreation systems do just that. If you are against it, rail on that one first.

And in the food cart mecca of the world, Singapore, that's exactly how they do it too. So your argument that people a bidding system somehow suggests vendors need to make a fortune to win a bid is not correct.

The main thing is whether you're for bidding or not for bidding. You can create rules in a bidding system that allows for fairness for everyone. For example I could say no single individual or company can have more than 5 vending permits. And we restrict each permit to a spot. This way no scoundrel in the black market can just come in and snatch up all the permits and then resell it somewhere in Queens which is what they do now.

Seriously, what are the downsides to a bidding system and why haven't the Singaporeans figured it out yet?

Posted On: Wednesday, Jul. 1 2009 @ 9:28AM
Sarah DiGregorioAuthor Profile Page says:

Hey Danny,

Well for one thing, Singapore has something like 15,000 licensed hawkers as opposed to our 3,000, despite having a population that's about half that of New York City's. You can imagine that, right there, more fairness is built into the system--instead of the 3,000 highest bidders getting a permit, the top 15,000 highest bidders do. In a population of about 4 million, that's a relative bounty of permits to go around, with more room at the bottom of the bidding scale.

Sure, you could say that no one can have more than five permits, but my question remains this: if we decide to go to a bidding-only system, how will the people who make about 7,000 dollars a year (that's the median reported vendor income--in reality it may be more, but even if it was as much as 10K more...you're still living in poverty) compete with upscale vendors, like the ones that have been popping up so often recently? Surely with only 3,000 permits to go around, most small, immigrant street businesses won't be able to compete. You could say that's fine, that's capitalism, but I think something fundamental about street food culture would be lost.

You're right that the black market needs fixing, but going bidding only seems like a mistake to me.

Posted On: Wednesday, Jul. 1 2009 @ 12:19PM
Sarah DiGregorioAuthor Profile Page says:

Just thinking about this some more... also, the system in Singapore is so different, I'm not sure it works to compare ours with theirs. The hawkers are not permitted to sell on the street, but are located in specially built hawker centers that are actually owned by the government--most real estate in Singapore is owned by the goverment, and something like 80 percent of Singaporeans live in public, government subsidized housing.

So the hawkers lease their stalls within the hawker centers from the government...I'm not sure how they regulate their bidding system, but I'll do some more research into exactly how it works.

Posted On: Wednesday, Jul. 1 2009 @ 12:41PM
Sarah DiGregorioAuthor Profile Page says:

Okay, sorry to drag this along, but I found some hard and fast information about Singapore's bidding system at Singapore's NEA (National Environmental Agency) website. (http://app2.nea.gov.sg/index.aspx)

It turns out that there are two ways to rent a hawker stall in Singapore: one seems to be the bidding system, as you mentioned, but there is also a walk-in system, in which anyone can walk in and apply for any stall that is currently available, not bidding, but simply paying the 150 dollar application fee. But like all Singaporean hawkers, they're also responsible for paying the rent on the space, because it is a brick-and-mortar space owned by the government. Here are the relevant bits:

a) What is the Walk-In Scheme all about?

The Walk-In Scheme is another avenue for those who wish to rent a hawker stall. Those interested in renting a hawker stall can come to NEA's Customer Service Center at #02-00, Environment Building from 1st to 10th of every month and submit the walk-in application form along with administration fee of $157.50.

b) How is this Scheme different from the Tender scheme?

Applicant who apply for a stall under the Walk-in Scheme will be allocated the stall based on the current market rent as assessed by the Chief Valuer. In contrast, the Tender Scheme requires applicants to submit bids for a particular stall. The highest bid (above the reserved rent and subject to fulfillment of the tender conditions) will be allocated the stall.

Posted On: Wednesday, Jul. 1 2009 @ 12:56PM
Danny says:

Sarah,

You bring up some really good points about how Singapore differs from us and how they have more permits to go around. I think a bidding system is the answer in order to get rid of the black market. Like you mentioned though, the number of permits simply isn't enough. We need more. I'm all for creating more licenses for NYC. With more licenses, it will help reduce the cost of the permits. The strategy a vendor takes when there's only 3,000 licenses differs when there are 6,000, or 10,000 or even 25,000 like the proposed legislation.

The fact is that a hypothetical bidding system doesn't actually exist yet. We can create any kind of rules we want to help the little guys. For example, we could say that the guys who are vending on the street now get grandfathered into the inaugural bidding system. And we do something to make sure it's the actual vendors who get it, instead of the permit holder, who might be some shady black market dealer.

We could then increase the number of permits, and use a bidding system for all the new permits. I think one of the things people are afraid of is that all the rich people will outbid all the poor people. If a cupcake truck can sell more than a hot dog stand, that's the nature of the business. I know it's really cold hearted to say that I want to see the city fix a system that might put immigrants out of jobs... but at the end of the day the proponents of the current system seem to just be ok with the black market.. ok with the fact that vendors live in fear of retribution... all of this is not ok. We can do better.

I know that no system is perfect. And a bidding system would hurt the guy who got his license through the city, and that guy makes 7k a year can't afford to bid. So maybe we can also have a hybrid system. We could have bidding for 'dynamic' food carts and regular permits for 'healthy' food carts. We have those green food carts coming from the city, the ones that sell fruits and such. We could transition some of the current vendors into doing that so they won't get killed by the bidding system.

Deep down I just really feel like this could work. Anytime you have a market place of goods/services, there's got to be a way to introduce some fairness into it. It's not just about good ole capitalism. I'm not so naive as to believe some people won't be hurt by a system, but right now it just seems like the system is really broken.

Posted On: Wednesday, Jul. 1 2009 @ 6:19PM
mr b says:

There are already way too many street vendors.
3 on many blocks is midtown.
It is so bad pedestrians walk in the street rather than the crowded sidewalk.
NYC needs stronger inforcement of current laws and
NO MORE LICENSES!

Posted On: Tuesday, Jul. 7 2009 @ 5:15PM
Robert SietsemaAuthor Profile Page says:

Do you, perhaps, own a restaurant, mr b? Just wondering.

Posted On: Tuesday, Jul. 7 2009 @ 9:20PM
hickman says:

broken rules,
most of this fancy trucks who think canncreate 5 stars kitchen and avoid rent are breaking the rules by not joining commissary as well which they must(by the rules of DOHMH , but the dep are not enforcing this rules , as result we seeing flood of this truck who clean heir trucks by the firehydran in empty street . and thrwoing their garabege and grease in nyc streets.
over 90 % who sells lunch/taco/dinners are commissary free.and all preparation done home which not inspected.
of course most the time when you ask them they will come up with lie, becuase when you ask the commissaries owners , they will tell about this broken rules.

Posted On: Saturday, Jan. 23 2010 @ 3:25PM

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