RENEE MONTAGNE, HOST:
The tough economy has forced a lot of people to get creative when it comes to finding ways to pay the bills. For some, that's led to a surprising new career, as is the case for the man we're about to meet. A few years ago, Eric Hagen was considering business ideas and it hit him that others could use some help too. And that's when Recession Ride Taxi was born, a service that's since taken off in Burlington, Vermont.
The key to this business model is trust. That's because riders set their own price. Vermont Public Radio's Kirk Carapezza recently rode along with the owner.
KIRK CARAPEZZA, BYLINE: Eric Hagen is a Wall Street banker-turned-cab-driver whose one-man pay-what-you-want taxi service has accrued dozens of faithful customers.
ERIC HAGEN: How's it going Alan, all right?
ALAN FLANDERS: No. It's not.
CARAPEZZA: It's too early on a weekday morning, and Hagen is picking up Alan Flanders outside his apartment here in Burlington's Old North End. Flanders is tired. He's heading south across town, about four miles to the country club where he works as a sous chef. Until three months ago, Flanders was unemployed so he appreciates Hagen's taxi service.
FLANDERS: I'd be walking to work this morning if it wasn't for Eric.
CARAPEZZA: In most cabs, this ride would cost more than $20. But Hagen takes whatever amount Flanders can afford. Today, it's $12 bucks.
HAGEN: Because I don't have a meter, it is pay-what-you-want. If I had a meter, it would still be operated the same way.
CARAPEZZA: In the three years he's been running this business, Hagen says he's never been stiffed. He averages about 100 rides each week, with an average fare of $10 to 15 dollars. At a time when his former colleagues on Wall Street continue to feel public scorn, Hagen says Recession Ride Taxi is running on trust.
HAGEN: People know that there is value in a service. And they're generally not going to try to get over on you. You know, people can decide for themselves.
FLANDERS: Thank you. See you later.
HAGEN: Thanks. Have a good day. Let me know if you need next Wednesday.
CARAPEZZA: Hagen drops Flanders off at the country club, then he weaves his silver Dodge Caravan back downtown. After a series of layoffs on Wall Street, he got a job with the American Red Cross in Vermont. But he says his new paycheck wasn't going far enough. By 2009, his mortgage was underwater. Hagen says that's when he got the idea for a pay-what-you-want taxi service.
HAGEN: I was in trouble. You know, I was like, look at my mortgage. Look how high this is. You know, why is everything so expensive? Why not try something that gets away from price and see what people do, how they react.
DEB CLARK: We definitely need more services like this.
CARAPEZZA: That's Deb Clark. On this afternoon, she sits in the front seat, like a friend would, as Hagen transports her between her two jobs. Clark says she depends on Recession Ride each week.
CLARK: I recently had to take a local cab company and I called them ahead of time and asked them the price on the phone. They gave me a certain price. I got in the cab, they changed the price. And I find that is very common with cabs. And Eric's always straightforward.
CARAPEZZA: Hagen has left his job at the Red Cross to operate his taxi full-time. Now, he hopes to expand by adding another car or two. Considering the economy, he thinks there will be plenty of riders.
HAGEN: I don't see those explosive economic days that we previously had. It's changed.
CARAPEZZA: And even if better days do return, Hagen says, in good times or bad, his pay-whatever-you-want business model will stay the same.
For NPR News, I'm Kirk Carapezza.
(SOUNDBITE OF MUSIC)
MONTAGNE: This is NPR News.