Meteoric Growth of New York City’s Mobile Food Vending Industry Sparks Legislative Action
Mobile food vending is now a billion dollar industry. The hospitality subset has experienced a major boom since the economic downturn of 2008. Food trucks nationwide are expected to bring in $2.7 billion in revenue this year alone according to Priceonomics. This meteoric growth is attributable to a confluence of changing consumer demands and a relatively easy start-up process.
In New York City, home to an estimated 12,000 mobile food vendors, legislators are struggling to find balance between regulation and sustained growth. The issues are many and range from permitting to parking to health and safety concerns. Here’s a closer look.
For that estimated 12,000 mobile food vendors, there are only 5,100 valid food vendor permits currently allotted by the city’s Department of Health. That number has not increased since the 1980s. The lack of permits has created a black market whereby permit owners can attain as much as $20,000 per permit as reported in the New York Times.
In addition, more vendors equates to more competition for brick and mortar restaurants. Having a large number of vendors operating illegally has restaurant proponents fuming about unfair competition, lost profits, and inadequate regulation.
Further, unpermitted vendors may put consumers’ health at risk. City health inspectors cannot inspect nor regulate what they do not know exists.
Proposed Legislative Solutions
The New York City council has proposed the Street Vending Modernization Act (“SVMA”) to expand the number of available permits to 8,000 by the year 2023. Proponents of the SVMA see mobile food vending as a legitimate industry and want the city to cultivate an environment where these businesses can flourish. In addition to increasing the number of permits, the SVMA intends to improve mobile food vendor compliance with local regulations and create an independent office of street vendor enforcement.
Despite the apparent benefits, the SVMA has been met with opposition from brick and mortar restaurant proponents. Restaurateurs are concerned with the effect an increased number of permits will have on their businesses, and concerned consumers detest the idea of further congesting already overcrowded New York City streets and sidewalks with more food trucks and carts. The SVMA has yet to pass.
On another front, mobile food vendors may face increased regulations regarding where they can conduct business. Today, New York City has fairly lax regulations addressing where a mobile food vendor may park. Vendors are only banned from occupying areas in and around crosswalks, fire hydrants, bus stops, building entrances, and the like. The New York City council has received pressure from local restaurant owners to further restrict the location of food trucks to address what they see as unfair competition. As an example of the conflict, some point to the area around the Second Avenue subway station. When the station was under construction, several restaurants in the vicinity suffered a decline in sales. Now that the subway has opened, mobile food vendors are setting up directly outside the subway entrance and in front of brick and mortar restaurants. Currently there is no pending legislation that restricts the proximity to which a mobile food vendor may park from a brick and mortar restaurant.
New York legislators have also struggled with the regulation of health and safety for mobile food vendors. Until just recently, there was no requirement for displaying food inspection grades for mobile food vendors. In May 2017, Mayor de Blasio signed into law a bill that requires mobile food vendors to display health inspection grades. A similar bill is currently active in the New York State Senate which would require inspection grades to be displayed and also require vendors to submit their routes to the health commission for tracking purposes. This bill is viewed as a win-win for both brick and mortar restaurants and mobile food vendors. The bill holds mobile food vendors to the same health and sanitation standards as brick and mortar restaurants, while those vendors displaying satisfactory food grades can attract more business by assuring consumers of a sanitary product.
Given that the mobile food vending industry now accounts for close to 18,000 jobs in New York City and it has become a part of the city’s fabric, we do not expect to see city or state legislators significantly curtail such business. However, with increased pressure from consumers, food vendors and brick and mortar restaurants, we do believe that legislators will act on the issues discussed above.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.