In Los Angeles, an Undergound Half-Billion Dollar Economy

Street vendors benefit the economy in all kinds of ways.

When it comes to underground businesses, the question of whether or not to regulate can be tricky.


According to a recent report from the Economic Roundtable, there are about 50,000 street vendors throughout the city of Los Angeles selling everything from food to clothing and cellphone cases. And since many of the vendors operate under the official radar (read: illegal), some say there is as much as $43 million a year in tax revenue that could be collected from them if they were to be regulated.

But the benefits of recognizing and regulating this unseen industry could be outweighed by hidden costs.

Unregulated, these tiny businesses are a major boon for the L.A. economy, even without tax revenue. Part of the positive influence is due to the ripple effect from all of these street vendor sales, since many of the businesses will acquire goods and spend their revenue locally. They may also attract sales for brick-and-mortar stores that they locate near.

While L.A. street vendor culture might be an entity unto itself, many other cities also have a strong host of similar vendors, particularly food vendors. Cities run the gamut from cultures that are friendly to these businesses, to those that place challenging rules and regulations on vendors.

Take Fort Collins, Colorado, for example, where food truck vendors recently voiced concerns about potential regulations that would impact how long they could park on private property. The vendors clearly felt that there are plenty of rules already governing how they operate, and they’re not too interested in seeing a new one.

In a completely opposite direction, the city of Pittsburgh has just lifted certain restrictions on food truck parking. Trucks can now use metered parking spaces for up to four hours, where before they could only legally stay in a metered spot for 30 minutes. The change comes with a few other new rules about selling hours and vendor license costs.

With the debate over regulation, it’s not quite a clear call on how L.A. street vendors would react to being more regulated. Perhaps the money they would need to pay in taxes wouldn’t come as a huge hit, but it’s also possible that new regulations could decrease overall income and have a negative impact on the flourishing subsector. Time will show how these sorts of businesses, and the regulations on them, change and grow.

Image Credit: JEWEL SAMAD / Staff via Getty Images

**

Stefani is a writer and urban planner based in Oakland, CA. She holds a master’s in City and Regional Planning from UC Berkeley and a bachelor’s in Human Biology from Stanford University. In her free time, she is often found reading diverse literature, writing stories, or enjoying the outdoors. Follow her on Twitter: @stefanicox

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Sponsored
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

What’s behind our appetite for self-destruction?

Is it "perverseness," the "death drive," or something else?

Photo by Brad Neathery on Unsplash
Mind & Brain

Each new year, people vow to put an end to self-destructive habits like smoking, overeating or overspending.

Keep reading Show less

Can the keto diet help treat depression? Here’s what the science says so far

A growing body of research shows promising signs that the keto diet might be able to improve mental health.

Photo: Public Domain
Mind & Brain
  • The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
  • Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
  • Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
Keep reading Show less

Douglas Rushkoff – It’s not the technology’s fault

It's up to us humans to re-humanize our world. An economy that prioritizes growth and profits over humanity has led to digital platforms that "strip the topsoil" of human behavior, whole industries, and the planet, giving less and less back. And only we can save us.

Think Again Podcasts
  • It's an all-hands-on-deck moment in the arc of civilization.
  • Everyone has a choice: Do you want to try to earn enough money to insulate yourself from the world you're creating— or do you want to make the world a place you don't have to insulate yourself from?
Keep reading Show less