Taxi Driver Does Pay What You Want... And It Works

from the funny-that... dept

Wed, Aug 5th 2009 9:50pm — Mike Masnick

We recently wrote about successful taxi cab operators offering free service in Tampa, Florida (pissing off existing cab companies), and it appears that the idea is spreading somewhat. Matt Cruse alerts us to a story in Essex, Vermont, involving a guy offering "pay what you want" taxi rides, and finding that people are always willing to pay a reasonable rate. Now, I'll admit that I'm not a huge fan of "pay what you want" models, which seem more like give it away and pray, rather than having a real business model worked out (which makes me wonder if it's sustainable long term). But, in the meantime, it's certainly yet another example that "free," can be a useful tool as a part of a business model.

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Filed Under: business models, free, pay what you want, taxi

24 Comments

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Chucklebutte (profile), 6 Aug 2009 @ 12:08am

id bet with human guilt, pay what you think is fair model would result in people actually paying more than it would cost normally.

think about taking a "pay what you think" taxi cab with a date, im sure you would shell out more than than the actual cost of a normal taxi ride just not to look like a shmuck.

not to mention how many of us know the exact distance traveled? if you take a taxi the meter is running and you can see it, you know what you need to pay based on the cabs fares. so not knowing this information coupled with guilt, i bet that taxi cab driver does alright.
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- Matt, 6 Aug 2009 @ 5:50am
  
  Re:
  I'm Actually From Essex, Vermont, and they had this guy on the radio here. He said that he usually does make more money on the "pay what you want" ride than a normal ride, but realize it is only pay what you want on the sixth ride, even at that its like a coffee shop stamp card, He is probably making enough on the other 5 rides to cover the costs / risks of pay what you want.
  
  Guilt definitely plays a large role in it as well, Our town is small enough that you can probably at least recognize if not know by name half the people you see driving through town.
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Anonymous Coward, 6 Aug 2009 @ 1:03am

It's much easier to anonymously take advantage of "pay what you want" schemes online than it is in person. This should be obvious to everyone.
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Ha - Progress, 6 Aug 2009 @ 4:45am

I hop this guy drives the other cabbies out of business. I live in a resort community taht is nearly 2 hours from the major airport. Resort owners have been trying, with the town, to get a high speed rail installed for the last 10 years. They figured it is a better option than widening the highway, which will NEED to happen, to accommodate the ever increasing tourists, Who's fighting it? The A****** cab companies, who are afraid they will become irrelevant. They need to ADAPT, or get out of the way, not block a project that will create employment, and benefit both the airport, and the resorts.
Lead, follow, or get the F*** out of the way.
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Another AC, 6 Aug 2009 @ 4:58am

In Boston Near Fenway Park
There are Bicycle Chariot Drivers that do this for the people that dont want to pay $50+ for parking. They dont charge anything but gladly accept tips, they have been there everytime I have gone to a game and from what they have said they do pretty well. I tipped them 10 bucks for about 10 minutes worth of work when my dad did not want to walk the 5-10 blocks. They are very nice and try to get you excited for the game too.
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- Anonymous Coward, 6 Aug 2009 @ 6:54am
  
  Re: In Boston Near Fenway Park
  That's a great idea, but where are you paying $50 to park? $25 underneath the bestbuy, about 1 block away with (more-or-less) direct access to fast roads out of the city.
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  - Another AC, 6 Aug 2009 @ 7:09am
    
    Re: Re: In Boston Near Fenway Park
    Thanks for the tip, I don't know Boston all that well, usually when I see parking right near Fenway it is 40-50-60 dollars, so I park at the prudential for $15 with game ticket and walk.
    
    I was pretty surprised when I asked how much those bicycle guys charge and they said they just work for tips. I have seen them with quite a bit of weight in the back of one of those. hell they could keep a small scale and charge per pound
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    - Spaceman Spiff (profile), 6 Aug 2009 @ 8:18am
      
      Re: In Boston Near Fenway Park
      When I lived near Bean Town I'd park at the Alewife T garage (used to be $5 / day), and take the T to Fenway. That way I wouldn't have to risk my car's suspension on Boston's pet potholes... :-)
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Anonymous Coward, 6 Aug 2009 @ 5:44am

That's right! And it would't work with the bigger taxis !!!
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Kim, 6 Aug 2009 @ 5:58am

I'm pretty sure Le Bec Fin (Restaurant in Philly) was doing something like this for the summer. A pay what you want meal.
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Anonymous Coward, 6 Aug 2009 @ 6:06am

"it appears that the idea is spreading somewhat"

If you think one additional case in a year is "spreading"...
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Javarod (profile), 6 Aug 2009 @ 7:49am

Pedicabs here in Phoenix do that, but its actually because of the law, they're not allowed to charge for their service, though i'm not sure why. Obviously they can't be metered like a taxi, but livery cars charge on a non-metered basis and that's legal.
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hegemon13, 6 Aug 2009 @ 7:59am

Depends on the availability
This seems like a great idea in a city where cabs are plentiful and cab drivers frequently find themselves with empty seats. However, in many cities, cabs are a scarcity, so the "pay what you want" model does not make a lot of sense to me. This is an example where the operator is already selling a scarcity, so why give it away?
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Spaceman Spiff (profile), 6 Aug 2009 @ 8:15am

Lost wallet, gotta get home...
If I provided such a service, I'd also have some business cards with information how to send $$ for the poor schmuck who lost their wallet (or whatever) and cannot get home otherwise.
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NIck, 6 Aug 2009 @ 8:26am

Kids car wash
In middle school some friends and I commandeered a cul-de-sac to do a 'car wash' day. We put up a sign "Car wash" and we said, pay what you want to pay. 5 here, 10 there, even got a 20 from some-body. Most people would have just driven by if we said "car wash - $5"
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Anonymous Coward, 6 Aug 2009 @ 8:37am

Damn Mike, my local coffee shop has been doing "buy 5, the next one is free" for ages. Are they on the cusp of the "FREE!" revolution too?

1975 called, and wants their innovation back.
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HrilL, 6 Aug 2009 @ 10:36am

Local Cab almost doing that
They guy owns his own car. Said it cost him $40 a day for gas and insurance. He charges like $10 bucks for a ride that a normal cab would charge $25-30. So I gave him $15. First time I met the guy he is like anywhere you want to go for $5. I gave him $10 because I felt like I was ripping him off.
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Alan Gerow (profile), 6 Aug 2009 @ 11:33am

More than likely this is a method to skirt Florida's taxi laws.

There was a story about a year ago about an old man who gave a ride to a young lady at a super market. At the end of the ride, the lady asked how much the man wanted for the ride. The man protested, and the lady insisted. He tossed a number, $5. She paid him, and he was then promptly arrested for running an illegal taxi service.

It appears if the guy in this articles charges ANYTHING, even the exact cost of gas consumed in giving someone a ride, then he would qualify as a taxi service with all the legal hoops that go along with entering that market.

Now, by not asking for any money at any time, and functioning entirely off of the donation of riders, he can possibly sidestep any licensing requirements for taxi services, keeping his bottom line down & not having to bow to regulatory forces.

So, more than likely, it's not so much a "pray" situation ... but a situation to avoid becoming government "prey".
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The Anti Mike, 6 Aug 2009 @ 11:48am

"he would qualify as a taxi service with all the legal hoops that go along with entering that market."

Yeah, you know, those pesky things like actual liablity insurance, vehicle inspections, safety requirements, things like that. Damn those would all suck, wouldn't they?
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- Alan Gerow (profile), 6 Aug 2009 @ 12:10pm
  
  Re:
  I refer more to licensing requirements that limit the number of taxi cabs to an artificial supply cap, government-mandated rate charges to limit competitive advantages, and legal requirements that specifically apply to running a taxi service.
  
  What you mention, liability insurance, vehicle inspection, safety requirements, etc, and those go along with vehicle registration. Not taxi service licensing requirements, so you're taking my argument against taxi licensing and applying an argument against vehicle registration.
  
  You've obviously taken debate classes designed for politicians:
  
  (1) find a sentence in your opponents argument (any sentence will do, as you aren't going to actually talk to it)
  (2) misinterpret every aspect of what the person is saying
  (3) argue a completely different point than your opponent was even talk about (bonus points if you work in reference to morality or children)
  (4) ???
  (5) profits!
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  - Anonymous Coward, 6 Aug 2009 @ 1:20pm
    
    Re: Re:
    Wow,the things you don't know.
    
    Did you know that in many states, taxis are just ordinary street cars without special licenses or other requirements to be on the road, but do require a special "permit license" from the city/ county / state / whatever to operate?
    
    Did you know that in many places, taxis are subject to much stricter mandatory inspections than street cars?
    
    Did you know that normal liablity insurance isn't enough to cover liablity for operating a taxi?
    
    So, 1, who cares, 2, don't have to, you missed the point, 3, your momma!, 4, !!! and 5, no profits, it's free.
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    - Alan Gerow (profile), 6 Aug 2009 @ 3:28pm
      
      Re: Re: Re:
      "Did you know that in many states, taxis are just ordinary street cars without special licenses or other requirements to be on the road, but do require a special "permit license" from the city/ county / state / whatever to operate?"
      
      But I mentioned specifically FLORIDA's taxi licensing requirements which is reference to the first link with the free taxi, which I cross-referenced with another story involving someone being arrested for giving someone a ride and asking for $5 when pressed. Which has nothing to do with any of those other states. So, talk all you want about other places, because that's the point ... I wasn't.
      
      If you want to get back to the point instead of trying to talk me into a corner by arguing about other places than the one I was speaking to, feel free to go on, but since I've been addressing a single state, I will continue to do so and ignore all your other irrelevant chatter about other places.
      
      "Did you know that in many places, taxis are subject to much stricter mandatory inspections than street cars?"
      
      Those states don't matter, because I was talking about Florida, where one of the people mentioned in the article was running a free taxi service. And it seems irrelevant anyway, as the regular motor vehicle will need to pass inspections to be street legal ... why would greater inspections be required for a passenger that gives the driver a couple dollars over a friend sitting in the back-seat?
      
      "Did you know that normal liablity insurance isn't enough to cover liablity for operating a taxi?"
      
      While Florida does have increased insurance requirements for taxis, I don't necessarily think it's a good thing. So, insurance is still required to operate a motor vehicle that would cover liability for operating a car ... it's less than if specified as a taxi, which I don't think is a bad thing. So, I see it as a big deal as insurance is still required ... it's just not as high. If my friend in back-seat is going to be covered by insurance in case of an accident, I don't see why anything different needs to be applied to a passenger giving the driver a couple bucks voluntarily.
      
      So those "pesky things" still exist whether or not this person has a taxi license.
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      - Anonymous Coward, 6 Aug 2009 @ 3:39pm
        
        Re: Re: Re: Re:
        Except the guy in this article isn't in Florida. Pesky, isn't it?
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Anonymous Coward, 6 Aug 2009 @ 12:27pm

There are a lot of laws that go into cab driving and getting a permit/medallion that make it artificially costly and hence expensive for no good reason.

http://www.answerbag.com/q_view/6053
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