Hamilton City Council is debating whether to allow mobile shops, such as food caravans, to operate in the central city.

Businesses who "put everything on the line" building a vibrant city centre could be negatively impacted if mobile shops get the green light in central Hamilton.

City councillors are divided on the merits of allowing up to three mobile shops to operate in the CBD, with some warning the initiative could undermine existing businesses.

The mobile shops proposal has been included in the city's draft Public Places Policy which goes out for public consultation in December.

The Public Places Policy provides guidance for a wide range of activities in public places, including outdoor dining, signs and busking.

Its overall purpose is to minimise public nuisance and protect public safety.

Hamilton Mayor Julie Hardaker said there were differing views among elected members about the merits of having mobile shops in the central city.

However, she was keen to canvas the public on their opinion.

"From time to time people talk to me about the vibrancy and the kind of carnival atmosphere that can occur when you've got mobile shops around and this is our opportunity to speak to that," Hardaker said.

"The [draft] policy does contain quite tight provisions about the operations of mobile shops; it's not a free for all. It's limited in number and specific to locations and limited as to the amount of time you might be able to operate."

Councillor Rob Pascoe said he took comfort in the fact other cities had successfully introduced mobile shops to their city centre by making them pay appropriate market rates.

Kelvin Powell, council's city safe manager, said ideally mobile shops should sell something currently not on offer and not be in direct competition with nearby businesses.

Hamilton currently has 44 mobile shops.

Councillor Andrew King and deputy mayor Gordon Chesterman opposed the idea of allowing mobile shops in the central city.

King said businesses "put everything on the line" when operating a shop in the CBD but would be undermined by mobile shops with lower overheads.

"Why would you rent one of the empty shops and move in when you can park a trailer outside for $120 every six months in fees, with no urban design," he said.

Similarly, Chesterman said the council had a responsibility to protect CBD outlets.

"If we pass a resolution to allow mobile shops in the CBD we're effectively granting them a free ride," he said.

In reply, councillor Garry Mallett said the council should not be picking winners between businesses and shouldn't be protecting one form of service delivery.

"If we are going to have mobile shops they should be paying for their share of costs. But if there is an innovative way of delivering a service or delivering a product and it happens to be from a mobile shop and it happens to be a better way of delivering it than going to a normal shop, then so be it," Mallett said.

Public engagement on the council's draft Public Places Policy runs from December 2 to January 15, 2016.