Thursday, August 05, 2010

Street Vendor Pity Party: A Response

It seems that our post on the Daily News coffee peddler article this morning didn't go down well with the reporter-understandably so since we chided him about ignoring the store owner who just may have been losing considerable business to the street merchant. The reporter's comment illustrate, in our view, the mindset of many-in the political class and out-who don't believe that street vendors should be too harshly restricted from plying their wares-even if they're doing so right in front of a store that sells the same thing.

But, in the interest of being fair and balance, we'll give reporter Oren Yaniv an opportunity to respond to our commentary:

This blog post is so misinformed as to almost not merit a response. But just a few points: cart vendors do have to pay for their license, do have overhead, do pay taxes and do have to comply with myriad labyrinth of rules and regulations (from the width of the sidewalk where they're allowed to park to the dimensions of the cart). Mr. Ramadan was working in that spot legally for six years--his cart emits no smoke and was never the subject of complaints about congestion. Yet has been forced to move illegally (or so his suit alleges) thanks to this "remarkable" official.

Is that the American way to promote competition? Doesn't the hospital shop owner--located inside the air conditioned facility--have a competitive advantage already? Maybe he should offer a better product and service instead of relying on arguably illegal actions by his buddies.
The fact that Mr. Ramadan is an immigrant--though included in the article by way of some biographical background--is totally irrelevant. What's more relevant are some details left out for lack of space, like the fact he regularly gives customers credit if they're short of cash or that 300 customers have signed a petition in his support.

I find it almost perverse that this post advocates assisting small business owners by illegally blocking other small businesses from engaging in a fair competition in the marketplace and praises unlawful intimidation as standing up for the little guy.

Okay, aside from the, "misinformed," comment-undoubtedly merited in Mr. Yaniv's view because of the tone of the blog post-there is much here that deserves a response, in spite of how hurt we are to be so labeled. Please Oren, call me anything, but not misinformed-we have been advocating on behalf of small businesses-and the majority of these have been immigrant-owned.

But, to the substance of the criticism. First to the issue of vendor regulations. We have been addressing this issue for quite awhile, and the stark reality is that the lion's share of regulations are mostly observed in their absence-and we have spent hundreds of frustrating hours trying to get the police, DCA, DOH, whoever to enforce regulations that are way too often ignored by vendors with impunity.

As we commented last year: "The other problem is the diffuse nature of the oversight responsibility: "Of all the gray areas for food vendors — who are regulated by a cluster of agencies including the Department of Consumer Affairs, the Police Department and the New York State sales tax authority — permits are the murkiest." Still, the idea of increasing their number amidst all of the acknowledged chaos is simply nuts: "The Health Department set the number of full-time food vending permits at 3,100, in 1979. (In the fall, the City Council will vote on a proposal that would increase the number of permits to 25,000.)"

In our view, the current chaos offers the city an opportunity for devising a system that actually works; where the rules are laid out clearly, and enforcement is delegated to one agency. But, of course, no matter how much sympathy we may have for the street vendor concept, some sense of equity for the tax paying and rent paying retailers needs to be built right into the heart of the regulatory system."
And on enforcement: "We have complained about the fact that fruit peddlers are operating multiple carts in violation of the one man, one cart rule-along with the fact that the peddlers routinely operate carts in front of existing food stores and flout the rules on size, storage, cleanliness and location. And the problem lies with the city's archaic and lax enforcement regime that cares not one wit about the tax paying store owners who are getting ripped off."

Which gets us to Yaniv's point about competition. Whatever "overhead" a street vendor has-and the cart permit is $250 a year-it pales in comparison to the tax and regulatory regime that a small store owner is forced to endure in this city-as Steve Malanga has so incisively pointed out. And then there's the context, with small store bankruptcies and foreclosures at all time highs in the city. Let's not forget that the mayor raised the commercial real estate tax to a record high level when he first came to office; and that tax is passed on as a rent increase in every commercial lease.

So, the idea that our ranting is out of a fear of competition, elides the fact that, contrary to Yaniv's assertion, this is no level playing field-far from it. And the idea that a "lower overhead" (we didn't say that the peddler had none) competitor can, for the price of a $250 permit, simply set up shop in front of a store owner selling the same product is simply inequitable and destructive to the city's small business that are reeling in the Bloomberg economy.

As we said some time ago in regards to the issue of unfair competition: "What is really galling for store owners is the fact that these peddlers, having none of a store's significant overhead, are able to siphon business from the markets by underselling the legitimate businesses. We even have anecdotes of store customers coming in to upbraid store managers because of the store's "rip-off" prices. Supermarkets, particularly in Manhattan, pay exorbitant rents and the concomitant property taxes are astronomical. These are the taxes that the city needs to pay for all of its vital services. It is simply unconscionable for peddlers to be allowed to in essence steal the legitimate business from store owners.We are asking the administration to vigorously enforce the law and we have petitioned the City Council to examine ways to toughen enforcement. If nothing is done to interrupt this trend pretty soon the street vendors will be replicating a supermarket's entire inventory. If you think that this is far-fetched then go to 86th Street between 1st and 3rd Avenues to see the bazaars already in operation."

One last point from the misinformed. Yaniv is not satisfied to simply tout the peddler, but insists on disparaging the store owner that he never bothered to interview: "Doesn't the hospital shop owner--located inside the air conditioned facility--have a competitive advantage already? Maybe he should offer a better product and service instead of relying on arguably illegal actions by his buddies."

No, he doesn't have a competitive advantage, quite the opposite, he has been priced out of the market by the shrewed street competitor with whom he has no chance of competing with on price-in spite of all the expenses Yaniv thinks the poor peddler has. And as far as the petition, most New Yorkers would willingly buy stuff off of the back of the truck if it's only a dollar cheaper. The average citizen has no real understanding of the controversy and, liker Yaniv, has a instinctive sympathy for the guy they see on the street everyday-so unlike the big capitalist who can afford to pay rent.

But the point that we had originally tried to make was a simple one. There are two sides to this issue-and if we made that point a bit too acerbically and personally for Yaniv's taste, so be it. He should go back and interview the store owner. It's just that simple!