WHAT ARE THE DIFFERENCES AND SIMILARITIES IN REGULATION OF STREET VENDING IN THE TWO CITIES?
What is the Informal Sector?
The informal sector includes all workers and economic units which are not part of the regulated economic activities and protected employment relations. Certain features of the informal sector make it easier for certain groups of people to earn a living. For instance most of the jobs in the informal economy do not require many skills, thus they are labor intensive. Since workers with little or no education are unlikely to find a specialized job in the formal economy, they tend to seek employment in the informal sector. As working in the informal sector requires low skills level, starting a business there is comparatively easy and requires significantly less capital. For instance, a person with little or no education, low skill level and little savings can start street vending. However, it is highly unlikely that they would be able to own a business in the formal sector. (Bhowmik 3)
Developing countries tend to have a larger informal sector. Where the governments and the formal sector fail to satisfy the needs of the population, the informal sector emerges and provides the community with goods in short supply. It was originally believed that the informal sector is a transitory sector, which will be eventually absorbed into the formal sector as countries develop. However, today we can observe that the informal sector is growing tremendously in all countries, including developed ones (Bhowmik 4). Formal and informal economies are interdependent; the informal sector is not subject to laws binding the formal sector, and for this reason informal sector often manufactures cheaper components which are later used in the formal sector. On the other side, the informal sector relies on the formal sector for its sustenance (Bhowmik 6).
Poverty and Street Vending in “World Class Cities”
While the informal sector is unlikely to disappear, certain branches of the sector are becoming more regulated and prosecuted. This is the case with street vending. As cities grow and develop, the poor seeking employment through street vending are pushed out and denied an equal share of the city. Their businesses and their existences are criminalized. Their contributions to the city and their local communities have been ignored. In the “World Class Cities” there is no place for the poor nor their businesses. They are said to block traffic and sidewalks. They are perceived as eyesores of the urban development by the urban elites (Jhabvala 13). The poor are in every city, their informal businesses serve the local communities, as well as contribute to the development, vitality and the liveliness of the cities. Local governments of some cities have recognized the importance of their services, thus their businesses have been licensed and decriminalized. However, the situations is far from perfect.
Regulation and Licensing of Street Vending in NYC
It can not be denied that street vendors contribute to the economy of New York City. A 2012 report estimates that around 17, 960 jobs were provided through street vending, as well as 71.2 million dollars in taxes and 192.3 million dollars in wages (Carpenter, 29). However, the majority of the vendors are unlicensed, meaning that their businesses are illegal. An official NYC street vending fact sheet states that “ a person must obtain a license from the Department of Consumer Affairs. Unfortunately, with a legislative cap of only 853 licenses, and a waiting list of thousands, the chance of obtaining a license at this time is unlikely” (NYC Government 1). For food vending, one must obtain both the food vending license and a permit for the Food Unit (Cart or Vehicle) from the Department of Health. To simplify the process of obtaining the license the Department of Consumer Affairs and the Department of Health have established a combined office.
Vendors Have a Voice!
Even though vendors know where and how to obtain their licenses, the number of licences given out is unsatisfactory (NYC Government, 2). The Street Vending Project (SVP) is a membership based project that aims to gather street vendors across the city and familiarize them with their rights and responsibilities, so that their voice is heard and their needs are met (About SVP). At the moment, SVP is running three campaigns. First, they are working with the local government on raising the number of distributed vending licenses. Second, they have established a fund which will loan out money to vendors in need. Vendors with licences are often fined 1000 dollar for trivial mistakes such as being a couple of inches too close to the sidewalk or having their licence in their pocket while setting up the stand. To them, this is a huge sum of money, and prevents some from renewing their licenses because they are unable to pay the fine. “The Pushcart Fund” is meant to provide a temporary monetary help, so that vendors in need can continue with their businesses. Third, SVP helps vendors build a case, when they are unjustly fined or denied a licence renewal (About SVP).
Regulation and Licensing of Street Vending in Shanghai
The district government is responsible for determining the territorial boundaries in which street vendors will be permitted to sell their goods. While the existence of street vending businesses is closely tied to demands of the community, the relationship between vendors and the community is not that simple. Community residents do not only enjoy the services provided by the vendors, but they also demand a clean and quiet living space. The role of the government is to decide upon areas which will be most suited for street vending, while keeping in mind the demands and the needs of the local communities.
According to the 2014 statute, different departments hold jurisdictions over different aspects of street vending regulations. For instance, “the Department of Supervising Food and Drugs” is responsible for supervising the management of the vendors’ business, “the Department of City Afforest and Amenities” supervises disposal of food waste and the cleanliness of the utilized space, and “the Department of City Management” is in charge of overseeing vendors’ use of the public space and obedience to laws and regulations by which they are bound. Lastly, “ the Community Service Department” is responsible for issuing designated vending areas and vending licences, as well as the construction of necessary infrastructure objects in vending areas.
What is the Disadvantage of the 2014 Statute?
The 2014 statute lists detailed requirements which vendors are to meet before they can legally vend. The vending license is issued to vendors who can provide information about their goods, their residence permit or Shanghai Hukou, Health examination documents, and signed contracts which specifies their vending time and location.
Obtaining a vending license in Shanghai is quite hard and the number of licences distributed in specific areas and in the city as a whole is limited. Even if the vendors are able to provide the required materials, they have no chance of obtaining the licence if the licence limit is reached. This is only one of the obstacles standing in the way of vendors who wish to legally earn their living.
Licensed vendors are obligated to be in line with the government regulations. This means that they will be using tableware which meets food safety standards. They are not to drain water as they wish and they are to collect all of the food waste into a closed container. Although licensed vendors were familiarized with the requirements through a mandatory food safety and street vending course, it continues to be difficult to meet all of the requirements for some. Poor hygiene, relatively high costs of maintaining cleanness on streets, and no proper food storage are only some of the challenges facing licensed vendors and their businesses.
How Pragmatic are the 2014 Statute Street Vending Regulations? How do They Apply in Practice?
In order to get a clearer picture of the implementation of street vending regulations in Shanghai, we interviewed a government official of the Jinyang Community. He did not allow us to film his face, but he provided us with insightful information. While the statute states the laws and regulations, the government official gave us insights into the actual implementation of regulations. He elaborated on the current vending situation in Jinyang.
Meeting with an official in the government of Jinyang Community
How Did the Vending Areas Come About?
The official claimed that there are two reasons why licensed vending areas exist. The first is to provide a source of income for unemployed local Shanghainese; one of the methods used by the government to reduce unemployment. Shanghainese vendors are mostly licensed and they are to sell their goods in assigned areas at the specific time. The second reason is the Changguan’s (City Management) intent to regulate persistent street vendors. The official confessed that it’s quite challenging, if not impossible, to eliminate all street vendors in the community. The government’s new approach to dealing with persistent vendors is to allow them to sell their food in regulated vending areas. Most of the vendors in the community are non-local residents, which was emphasized multiple times throughout the interview.
Types of Vendors in the Regulated Vending Areas
There are two types of vendors in regulated vending areas. The first type are the local Shanghainese vendors, while the second type are non-local vendors. These two groups are not held to the same standard and the regulation of these two types is quite different. Local Shanghainese vendors are obligated to gather the documents required by the 2014 Statute, as well as register at the community government. After a vendor has been registered, he/she receives a standardized vending cart which was designed and manufactured by the government. Registered local vendors are also expected to comply with the rules and requests of the government. For instance, during the 2010 Shanghai Expo the vendors were asked to stop vending, so that that the city could be cleaner.
When it comes to non-local vendors, they are for the most part not registered or licensed. They have their own vending carts and they decide their own vending time and destination. The official argued that they are really persistent and hard to eliminate. Unable to successfully deal with persistent non-local vendors, the Chengguan asked them to vend in specified vending areas. The Chengguan and the government are working together to incorporate non-local vendors into the regulation system, so they will be able to control cleanliness and other aspects of street vending which might affect residential communities. The vending areas are chosen because they are unlikely to intervene with the quality of life of local residents.
The government makes a clear distinction between the two types of vendors. The licences issued to local vendors can not be rented or transferred to non-local vendors. This is because a legal licence can only be issued to unemployed local Shanghainese vendors. In addition, the maximum number of licences is limited, there are only 60 licensed vendors in the community, while the number of non-local vendors is unknown. While non-local vendors themselves decide on the food which they will be selling, local Shanghainese vendors are often assigned a kind of food which they are to sell. This is so that the food offered in the community is balanced and varying in kind. Judging based on what we were told by the Jinyang government official, there is little deviation from the rules stated in the 2014 statute, at least in Jinyang community. However, complete execution of statute rules and regulations is unlikely to be accomplished, especially given the persistence of non-local vendors and the issues with their regulation.
Mapping the Vending Areas in the Jinyang Community
The official of Jinyang community government provided us with 6 out of 11 vending areas in the community. We visited those areas in an attempt to examine the condition of the areas and their compliance with the 2014 Statute.
[MAP]
What are the Jinyang community vending areas like?
After visiting the Jinyang community vending areas, we were surprised to see how different each area is. The one on Jinyang Road is clearly marked by a sign. The sign also contains a phone number which can be called if there is any issues connected to street vending. The vending area on Qishan Road is not clearly marked. Vendors in the area are not familiar with its status of a regulated vending area, however they say that Chengguan does not bother them there, at least not too often. All of the night vendors in this area have been vending there for several years.
The vending area on Deping Road is slightly different from the previous two. At night, there are no moving vendors, however, small restaurants by the road have their own outdoor tables and chairs set up. The vending area at the crossing of East Boshan Road and Yunshan Road, shows no signs of street vendors nor it is marked as a vending area. This makes us doubt if the government records are up to date. According to the 2014 statute, the government has the responsibility to mark the area and its vending time. Among the six vending areas which we have visited, the Jinyang road vending area is the only properly marked area. We expected the vending areas to be alike, however the only obvious vending area is that on the Jinyang Road.
The hygiene in the vending areas
Most of the vendors in Jinyang Road area and Qishan Road area do not know what the vending area is. Most of them also do not know they need to show the license and health examination card on the cart. This is definitely against the 11th rule of the 2014 statute.
Furthermore, vendors in vending areas are required to deposit all of their food waste into a dust bin with a lid. While vendors do deposit all of their waste in the bins, most of them are not covered with the lid. From what we have seen in these vending areas, one can say that the government is not strictly imposing the regulations from the 2014 statute.
Conclusion
As we have discussed, the formal and informal sectors are interdependent. While it was expected that the informal sector will disappear as countries develop, today we see quite the opposite. The informal sector is growing in size and complexity. One could argue that Street Vendors are the most visible and obvious fraction of the informal economy, however, their needs and contributions are largely ignored.
Because street vending is unlikely to disappear, large cities such as Shanghai and NYC have started the process of legalizing and incorporating street vendors into the formal sector. Both NYC and Shanghai have a set number of licences issued to street vendors and, in both cases, the number of licences is too low. In the case of Shanghai, licencing discriminates against non-local vendors. While NYC originally had two offices (the Department of Consumer Affairs and the Department of Health) that dealt with street vending regulations, the process of obtaining a licence has been simplified by establishment of a combined office. The same cannot be said about Shanghai, where multiple offices deal with street vending regulations. Common overlap of the office jurisdictions causes confusion and inefficiency. The main difference between the two cities pertains to the vendor unions. While vendors in NYC are somewhat organized and unified through organizations such as “The Street Vendor Project,” vendors in Shanghai have no such union. Without organizations that are able to represent and fight for the needs of street vendors, the progress initiated by the local governments will be minimal and unsatisfactory. Thus, we argue that vendors should be more organized and represented by organizations which are not only going to operate on a local or state level, but also on an international level.
Works Cited
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