Heating Help

Ray Kottner had driven a cab on New York City's streets for more than 60 years when he decided to stop charging people. Ray drove a Checker Marathon cab, one of those classic New York vehicles that are but a memory now. When I was a boy, my biggest thrill was to be able to sit in one of the jump seats that folded up and down. We rarely took cabs, but I can remember every ride that we did take. Five or six people fit in the back seat of those beauties.

            In 2006, Ray removed the meter from his cab but kept prowling the streets of New York. When someone flagged him down and asked where the meter was, Ray would tell them that the ride was free. He'd take them anywhere they wanted to go. No charge. People could tip, of course, and they did, often for much more than what the normal fare would have been. People can be that way sometimes, especially when confronted with an unusual situation.

            I read this story in the newspaper back then and I cut it out and carried it in my wallet for a few years. It made me think about what things are really worth.

            Early last spring, The Lovely Marianne and I were traveling off on some seminar trip. When we returned to the Isle of Long, we saw the results of a huge Nor'easter that had blown through two days before. A bunch of shingles that used to be on our roof were now laying on our lawn. Not good.

            Now, I'm of an age where I've gained the wisdom to know that men of a certain age do not belong on the top of tall houses that have steep roofs. This is a job for younger men who see themselves as being both bulletproof and immortal.

            I looked up at my roof for a while and then decided how much it was probably going to cost me to have it all made right. I arrived at this figure by thinking about what the job was worth to me. It was all about how much I was willing to pay not to have water dripping through the ceilings, and not to have to ride in an ambulance. I also didn't want The Lovely Marianne giving me that look. You know the one.

            So I called a couple of guys I know who do this sort of work. They're a father-and-son team and they get by okay on their small business.  I don't think they'll ever be rich, or ever be able to retire comfortably. They go from job to job, just making it. They do wonderful work but the problem is that they base their prices on what their competitors charge. And those competitors are just like them. These guys all walk warily around each. They create this condition called, What The Market Will Bear. And then I think they see the market as each other. If they can't afford it, nobody can.

            Anyway, the father and the son arrived right on time and the son gamboled up the extension ladder and onto my injured roof. I stayed on the ground and drank coffee with the father. Every now and then, we looked up at the son. The father was also wise. Let the kid do the tough stuff.

            When they were finished, I asked them what I owned them and they looked at each other for a while, and then at me, and then they decided on a price that was exactly one third of the number that I had arrived at in my head, and all on my own, when I had first seen the damage.

            You know why? They were charging me based on how easy it was for them (the son, actually) to do the work. It was just shingles and labor. It wasn't like they were ever going to have to replace their truck or their tools or retire someday. It was just a couple of hours work and some shingles. How could they possibly charge a lot for that?

            But here's the thing: I was willing to pay based on what it meant for me to have the work done. I didn't want to do it myself, but even if they had understood what the work was worth to me, I think they still would have charged the lower price because, in their minds, that's what the market will bear.

            I paid them what I thought it was worth. I gave them three times what they had asked for. They looked at me like I was nuts, but they took the cash. Then they looked at each other and I could see something in the son's eyes that was not in the father's eyes. That was good.

            Ray Kottner drove his free cab around New York City for a year and a half and got lots of press for what he was doing. The guy was a delight to see on the TV. He was great at the chat and he was smiling his way down every street, giving it all away, and doing better than he had ever done when he used to charge for the rides. Go figure.

            Then, in July, 2007, an investigator from the Taxi and Limousine Commission spotted Ray taking a $10 tip from a grateful passenger. They pulled him over, seized his cab, and made him to post a $1,500 bond to get it out of impound. They also hit him with $585 in fines because they said that he was no better than a thief for giving away rides for which other cab drivers were charging. He was allowing his customers to decide what his services were worth, and in New York, that's apparently against the law.

            In May, 2010, Panera Bread opened a new store in Clayton, Missouri, just outside of St. Louis. Everything in that new store is free. There are no prices on the menu, but customers are encouraged to pay what they feel the food is worth. A nonprofit foundation is running the program, and if it's successful, Panera says they will expand the program.

            So far, most of the customers (a mix of well-to-do and lower-income folks) have paid full price for the food, or they've taken a couple of bucks off what would be the full price. A few have paid half-price, but most have come up the cash for what they think the food and drinks are worth. Some even pay more, and everyone seems to like having the choice.

            So here's a question for you: If you didn't post prices, and someone came into your place of business, would they pay what you think is the correct full price for what you have to offer? Would they pay more? Or perhaps less?

            What's it worth?

            And the products that you sell, if you could name the price to own those products, not for resale, but for your own personal use, would you pay what you're charging others? And if not, why not?

            What's it worth?

            An interesting way of looking at things, isn't it?

            What is something worth? And if you had the opportunity to decide the price, where would you place it? Give it some thought.

            Would you make the price What The Market Will Bear, whatever that means, or would you make the price representative of what that product or service does for you, and means to you?

            I didn't want to go up on my roof to fix those shingles. I'm too old for that sort of adventure. I knew what the job was worth to me. Trouble was, the guys doing the work didn't know the true valve of what they were selling, and that's often the problem. It's also the reason why we all beat each other over the head in our never-ending quest toward the lowest common denominator and the lowest possible price.

            We're not spending nearly enough time thinking about what things are really worth to our customers. Given a free choice, most customers will pay more than you think they will pay, and even in New York.

            On a lovely June evening in 2008, Ray Kottner was sitting in his taxicab, waiting to give someone a free ride, when his heart stopped beating.

            I like to think he was smiling.