Studies of informal street vending in the Global South often investigate grassroots resistance to formal and informal power as a collective and organised phenomenon. In our case study in the megacity of Dhaka, we show collective resistance is not possible due to an overwhelming threat from a coercive state. Informal vendors must resort to other tactics to appropriate public space to preserve their livelihoods. This is achieved by street vendors entering into locally embedded social and economic relations with agents of the state working informally to extort regular payments from them in return for access to public space. These local relations work in opposition to the neoliberalising ambitions of the state to clear and sanitise public space. Vendors look to local police and petty criminals for livelihood security rather than each other. This atomisation, reinforced by the culture of suspicion and kinship insularity, prevents vendors from organising across local boundaries to press claims for greater protection from the state. We argue that in cases where formal power is acting informally, this need to be taken into account to understand the social and economic realities of informal trade and the subsequent obstacles to collective action by the poor in cities such as Dhaka.