DC wants to lock up street vendors

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The District of Columbia’s food trucks, farmers markets, mobile boutiques and ticket resellers all potentially face harsh new criminal penalties under amendments to the district’s vending regulations that were the subject of a hearing this morning by the District Council’s Business, Consumer and Regulatory Affairs Committee.

Perhaps most noteworthy are the changes to rules governing ticket sales on public property. Last fall, the district “accidentally” legalized so-called “scalping” by failing to reauthorize rules that banned the practice. More recently, district police have resumed enforcement of the law, and the new ordinance, introduced by Council Member Vincent Orange, would not only allow sellers to be jailed for up to 90 days, but would increase the fines people could face for selling tickets on the street to $300 from the previous $50.

Of course, as the Washington Post‘s Lydia DePillis asked when the initial regulations expired last fall:

Officials promised that the situation would be rectified promptly. But they never answered the question: Wait, why do D.C. and dozens of states still restrict scalping in the first place?

After all, scalpers just make up for market inefficiency, by capturing the difference between what the venue decides the ticket is worth and what the market thinks it’s actually worth. And shouldn’t ticket vendors be able to cut scalpers out of the process by instituting a dynamic pricing system that charges more for in-demand tickets and increases ticket prices as the event comes closer? That way, there will always be some tickets available for people without having to resort to buying them on the street, and the seller gets the most possible money for them. Airlines do it, hotels do it — heck, even Goldman Sachs does it to keep the lines down in its cafeteria.

The addition of criminal penalties to the vending code also has broader implications for street vendors generally, and come on the heels of a lengthy fight over where the district’s food trucks would be allowed to park. That battle resulted in an earlier major overhaul of vending regulations passed last June, which created limited “vending zones” within which food trucks selected via a new lottery system would be allowed to operate.

The DMV Food Truck Association has already gone on record that it does not oppose the imposition of criminal penalties for violating the vending code, but the situation is not so clear for other street vendors.

For instance, the district’s farmers’ markets were already trying to digest reams of new rules that took effect this spring season. Initially, the new rules created something of a Gordian Knot, in that they required vendors to obtain both business licenses and health inspection certificates. Alas, in a scene straight out of a Kafka story, the district’s Department of Consumer and Regulatory Affairs would not issue a business license to any firm without a valid health inspection certificate, and the D.C. Department of Health would not inspect any business without a license.

Though that catch-22 has since ostensibly been solved, there remain a number of problematic rules and fees that could threaten to curtail what has been impressive growth in the number of farmers’ markets operating in the district, which have doubled from 20 to more than 40 over the last seven years. The DOH is no longer requiring pre-operational inspections, but it is requiring vendors to verify they’ve obtained a host of licenses and certifications from state and federal authorities, and to submit to random unannounced inspections. What’s more, certain items – like eggs and oysters – may no longer be allowed for sale at all. As the Washington City Paper outlined the situation:

There are also a few other new bureaucratic requirements this year just to open a market. In the past, most market organizers dealt primarily with the Department of Transportation, which gives out public space permits. If vendors planned to cook food, the market would also need a propane permit from the Office of the Fire Marshall. If they were weighing vegetables on scales, they’d get a visit from DCRA’s Office of Weights and Measures.

The new criminal penalties also apply to the emerging market of “fashion trucks,” roving retail vans from which mobile vendors sell racks full of clothing and shoes.

While the DCRA and Department of Transportation reluctantly have allowed these fashion trucks to purchase single-day permits to operate special events on private property for $50 each, they’ve instituted stringent rules about the trucks’ size, layout and parking options which they must meet before being allowed to park. As the Institute for Justice’s Robert Frommer told the George Washington University student newspaper recently:

[M]any of the new rules for fashion trucks stem from hypothetical problems rather than actual concerns. He said the departments have claimed that customers could be injured if another vehicle hit the truck while people were inside.

“Yes, that theoretically could happen. It’s not impossible, but it could happen at any point. It’s nothing special about the fashion truck,” Frommer said.

Frommer argues that this “risk-averse” mindset prevents the district from seeing the opportunities that fashion trucks provide.

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