As L.A.’s sidewalk vendors cut corners, restaurants pay the price

FEATURED: LOS ANGELES TIMES | OP-ED
JOT CONDIE, PRESIDENT & CEO CRA
July 29, 2026
Questions Contact: Haiden Emmett ▪ 916.431.2729 ▪ [email protected]

When gubernatorial candidate Xavier Becerra casually advised the National Assn. of Latino Elected and Appointed Officials to bypass California's traditional brick-and-mortar restaurants - arguing that you don't get "real street tacos" from a long-standing establishment, but from the guy who makes them "in his little cart" - he likely thought he was delivering a charming, populist nod to local culinary culture. Instead, his comment touched a raw nerve across the state's food service industry.

The issue isn't tacos or the street food culture. The real crisis brought to light by Becerra's remark is a fundamental breakdown in economic fairness: an expanding state-sanctioned underground economy operating outside the health, labor and tax regulations that legitimate restaurant owners are legally required to follow.

In California, running a compliant brick-and-mortar restaurant is a punishing enterprise. Owners must navigate rising commercial rents, local permitting fees, mandatory health inspections, workers' compensation requirements and strict labor standards. These local entrepreneurs, many of them first- and second-generation immigrants, invest their life savings into building legitimate, law-abiding businesses.

Yet, under the current regulatory landscape, these business owners feel routinely undercut by sidewalk operations that face much less operational overhead and almost no regulatory enforcement.

This is largely the unintended byproduct of Senate Bill 946, the Safe Sidewalk Vending Act passed in 2018. Intended to decriminalize sidewalk vending and foster grassroots entrepreneurship, the law restricted how local governments could regulate street vendors. In practice, however, it created a legal and enforcement vacuum.

What was envisioned as a path to legitimacy for micro-entrepreneurs has evolved in many urban centers into an unmonitored underground economy where cutting corners is not an anomaly, but a business model.

California's restaurants generate more sales tax for state and local government than any other type of business, while these sidewalk operations - of which there are an estimated 50,000 just in Los Angeles County - often deal in cash or untracked digital transfers, evading state sales tax and local business assessments. As California Atty. Gen. Rob Bonta noted during an enforcement action against underground economic operations, tax evasion is not a victimless crime: "When individuals and businesses deliberately avoid their legal responsibilities, they are shifting the burden onto honest taxpayers and depriving communities of essential funding."

While brick-and-mortar restaurants must comply with strict minimum wage laws, overtime rules and youth employment standards, unpermitted carts operate completely in the shadows. Reports across major California metros highlight wage theft, sub-minimum wage pay and the use of child labor, with young children frequently seen working late-night shifts near high-heat cooking equipment.

Permitted restaurants undergo unannounced inspections of food storage temperature, clean water access and sanitation protocols. Unlicensed vendors frequently operate without food handler certifications, proper refrigeration or access to handwashing stations. And untreated grease and wastewater have been dumped directly into storm drains, posing environmental hazards and elevating the risk of foodborne illness.

Unregulated vendors often deploy makeshift propane setups, open flames and unmaintained gas generators, engage in unlicensed alcohol sales and erect sprawling vendor setups obstructing sidewalks.

Cities such as Oakland, San Diego, Fontana and Santa Barbara, which have attempted to address the growing problem of unregulated vendors, have been challenged in the courts by civil rights groups and advocacy organizations on the grounds that they are violating the law because SB 946 preempts them from enforcement. The law bars them from shutting down operations that pose a risk to public health and safety.

Restaurant owners across the state are asking a simple question: Why must we pay tens of thousands of dollars in permits and follow every code on the books, while the vendor setup directly in front of our dining room door pays nothing and answers to no one?

Addressing this crisis does not require outlawing street vending. Indeed, street food adds cultural and culinary richness to many of California's cities. But cultural value cannot be an excuse for an enforcement double standard.

California must reestablish a single standard of lawfulness. Sidewalk vendors who obtain health permits, collect sales tax, abide by labor laws and maintain safe equipment should be welcomed as part of our vibrant food ecosystem. But those who do not must face real and consistent consequences.

When political leaders encourage consumers to bypass rule-following businesses in favor of an unregulated underground economy, they miss the bigger picture. True economic justice isn't about rewarding those who skip the rules. It's about ensuring every entrepreneur complies with the same set of standards.