At first, tiny urban folk had it tough. Increased industrialization meant their environment got polluted with chemicals and trash and their old ways were being destroyed. However, soon they realized that one man's trash is another man's treasure and began to adapt.

First, they managed to find sources of clean water and build their own trash recycling facility. This allowed them to get access to food leftovers and lots and lots of building materials. That, in turn, allowed for all sorts of crafting. Thus, the crazy fashion and the transportation mods have emerged.

Nowadays, with the abundance of resources the tiny folk have decently comfortable lives. Normal people are too busy with their phones or shenanigans to notice them. Their only natural predators remain rats, but they manage to fight them off with tools they have build or found.