Original Blog Entry: Man Opens Taxi Service Pay What You Want

truesee — Mon, 03 Aug 2009 11:06:09 GMT

Vermont man opens Recession Taxi

By Joel Banner Baird

Free Press Staff Writer

August 2, 2009

ESSEX You read it right the first time: the message on the taxi s back window really reads, Pay What You Want!

Eric Hagen, 46, an Essex resident and the SUV s owner (and sole proprietor of Recession Ride Taxi) smiles a lot, but he isn t joking. He s making a profit.

Nobody has shortchanged me yet, he said Saturday. Nobody s stiffed me. I ve decided to empower the customer; they like the fact they can decide.

Hagen, who still works full time at the American Red Cross in Burlington, hatched his improbable business model in June.

I hadn t thought about it before, he said. I was watching CNBC the financial station and it suddenly hit me: Everybody s always hearing, This is what your mortgage is going to be; this is what your car payment s going to be. People want to get away from that.

Low start-up costs and low overhead prompted Hagen to get a cabbie s license and insurance.

He printed up some business cards with his cell phone number, and waited.

The first half of July, Hagen took far more questions than fares: People were coming up to me in parking lots and asking, Is this for real? I d tell them, This is for real. And I d give them a card.

After two weeks, business really started picking up, he continued. That s the way consumers are: they re curious at first, and then they gain trust. And I m trusting that the consumer is going to be fair. Maybe that s what people need right now.

The New York Stock Exchange, where Hagen worked in the 1990s, shaped Hagen s take on what he liked and didn t like in the world of finance.

Stints at Putnam Investments and Bombardier Capital (now GE Commercial Finance) sharpened his search for a different way to do business.

It caused me to be more empathetic: You d see millions of dollars in losses. You d see corruption, and then you d talk to people who ve lost their entire savings, lost their retirement, he said. It made me think there s got to be a different approach.

Hagen offers Recession Ride customers an expanding selection of what he terms the fringe benefits of his service.

Repeat customers get their business cards punched; every seventh ride is free as long as it s within Chittenden County.

He keeps a cooler in the Durango loaded with pay-what-you-can iced bottles of water, Gatorade and soft drinks.

Other benefits of membership are still in the development stage.

Hagen s city of Burlington permit is still in the works, but he s taking people s numbers for future rides. He keeps his cell phone on, day and night.

So far, he s taken no heat from cabbies who follow more traditional codes of commerce just a few phone calls to satisfy a growing curiosity: Is Recession Ride legit?

He tells them business is good, and growing.

Like other cabbies, Hagen keeps a detailed log. He s earned about $600 in two weeks, working Thursday nights through Sunday evenings.

Most, but not all of his transactions are in cash. One fare, a musician, gave him a newly minted CD. Another proffered a Hannaford s Supermarket card.

It had $10 on it. It was a fair trade, he said.

I believed from the start that this would work, he continued. I believed that people are going to be generous enough to make it worth my while, and I m going to be generous enough to let them decide.

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