The Wall St Journal recently investigated the shadowy world of food cart permits, and (surprise, surprise) found a thriving black market where prices to “rent” permits are rapidly escalating due to the burgeoning popularity of street food.
They cite a hot dog vendor in the Bronx whose “rent” paid to the actual permit owner has doubled to $14,000 for a 2-year period. They also spoke with our friend, Mohammed Rahman of Kwik Meal, who says he pays $15,000 every two years for his permit. “The city charges only $200, why should I have to pay $15,000? All the profits go to someone else.” says Mohammed.
That’s what happens when the city only issues 3,100 year-round permits plus an additional 1,000 seasonal permits—not nearly enough to satisfy demand. Even though many thousands of people enjoy street food every day, the city will not increase the number of permits. Chances are any attempt to increase the number of permits will run into fierce opposition from existing business owners.
Transferring or renting these permits to another vendor is illegal but everyone, including the city’s Health Department, acknowledges that it happens, and they seem to turn a blind eye.
Two years ago, the city’s Department of Investigation did an undercover probe of improper permit transfers, which led to six arrests. The department recommended, among other things, that the Health Department move to a competitive sealed-bidding process to help “eliminate the criminal conduct found in the investigation.” Of course, this hasn’t happened.
Obtaining a food cart or truck permit in one’s own name can take a decade or more, according to vendors, with 2,080 people currently on the citywide waiting list for a two-year permit.
Sean Basinski, director of the Street Vendor Project, an advocacy group that is part of the Urban Justice Center, estimates that 60% or more of vendors rent their permits. “There’s no sign that the Department of Health is willing to do anything about this,” he said. “This is about economic justice within the vendor community between former vendors and current vendors.” He supports issuing more permits.
Some in the business industry say the popularity of street food could reap the city big money if it put food permits up for auction like taxi medallions, an idea one man is currently pitching to city officials. “This is a no-brainer for the city,” said Andrew Murstein, president of Medallion Financial Corp., the largest taxi medallion lender. He notes that the first medallions were issued in 1937 for $10 apiece. Their prices have risen ever since, and one recently sold for $900,000.
The city’s Parks and Recreation Department awards permits for the couple hundred mobile food units on its property—including highly coveted spots fronting the Metropolitan Museum of Art and Museum of Natural History— through a competitive solicitation process. In fiscal year 2010 the highest amount paid for a permit was about $144,000 for a cart at the south entrance to the Central Park Zoo. [WSJ]
