Cities Shouldn’t Create Barriers to Entry for Food Carts

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I usually save local politics for my personal blog, but I figure this kind of thing – cities creating barriers to entry in response to whining from incumbent businesses – is probably happening all over the state. This post is about food carts, but the underlying point can be applied universally:

Lynn Olanoff says Bethlehem city council may be about to make the city’s anti-competitive food vendor ordinance even worse, which is pretty amazing given how awful it already is.

The changes would restrict mobile vendors to operating between 10am and 6pm on Monday – Saturday, and 12am – 3am on Thursday – Saturday. Food vendors will not be allowed to move their carts to a different location to reach potential customers:

Morales, a city resident who has run a hot dog cart in Bethlehem since July 2010, told city officials he was unsure about his permitted hours and had kept late night hours every day of the week except Sunday. He is only permitted late night hours Thursdays, Fridays and Saturdays.

Morales also has moved his cart to locations other than his permitted spot outside the former First United Church of Christ, city officials said. He had wanted the city’s permission to operate his cart outside the Tally-Ho Tavern on Monday and Wednesday nights but city officials turned down his request Thursday night.

This is really insane. 6 pm? How can you take away the whole dinner hour from a food business? What could possibly be the reason for doing that?

“I think operating from 12 until 3 o’clock those three nights are wrong,” said Tina Kowalski, who owns the Funhouse bar on East Fourth Street. “The whole evening is about the vendor … and I don’t see any compromise with the merchants.”

The merchants! Yes, even though the Funhouse doesn’t sell hotdogs, and Chris Morales doesn’t sell booze, somehow he is…stealing business from them. Personally I think beer and hotdogs go great together, but to each his own.

Look, this is just rent-seeking. Even if Chris Morales was directly competing with the Funhouse, selling exactly the same things as them, right out in front of their bar, there’s no case for the government to step in and reduce competition. Some day another bar might open next door to the Funhouse and directly compete with them. Should the city step in and stop that? Of course not. Competition is great, and there is not a legitimate public interest in making the bar and restaurant market less competitive.

The original food vendor ordinance is bad, and these changes are even worse. Vendors should be allowed to sell food at whatever times they think they can make money, and they should be allowed to set up wherever they want and go to where the customers are. It is not in the public interest to restrict their hours, or create barriers to entry, just because some business owners don’t like competition. I can’t imagine the government agreeing to blatantly restrict competition between brick-and-mortar businesses in this way.

It’s perfectly sensible to require mobile food vendors to get a business license and a health permit, and pay the same business privilege taxes as brick and mortar businesses, but that’s it.

People should be allowed to open a food vendor business as-of-right. They shouldn’t have to get approval from city council or property owners. They should definitely be allowed to move their carts to wherever the customers are. If Chris Morales can make more money operating in front of the Tally Ho some nights, and the Funhouse on other nights, the city shouldn’t stop him from moving. Allentown gets this part of their food vendor ordinance right, only requiring vendors to leave 5 feet of sidewalk clear for pedestrians at all times. No approval from property owners is required.

That’s not to say Allentown’s ordinance is great. It has its own protectionist problem, where vendors offering a similar product as an existing brick-and-mortar business aren’t allowed to set up within a 2-block radius. Just like with the proposed 6 pm cut-off proposed in Bethlehem, this is purely for the benefit of rent-seeking incumbent businesses and serves no legitimate public interest.

Instead of making the law stricter, Bethlehem city council should take this opportunity to streamline the process, and get rid of the anti-competitive restrictions on hours, mobility and the number of vendors.

This entry was posted in Economy.

2 Responses to Cities Shouldn’t Create Barriers to Entry for Food Carts

  1. You are absolutely right, governments should not erect barriers in order to protect brick and mortar businesses from competition. We at the Institute for Justice's National Street Vending Initiative have been fighting against anti-competitive laws like this across the country. For more about IJ and its National Street Vending Initiative, please take a look at http://www.ij.org/about/3939

  2. Pingback: 2/28 Morning Buzz | PoliticsPA