The ‘Potomac rate’: A penalty for doing well?

John Kelly
Columnist September 26, 2012

“Your mileage may vary.”

We all accept that, right? But what if the saying was, “Your bill may vary”? What if the price you pay for a service varied depending on where you lived?

John Kelly writes "John Kelly's Washington," a daily look at Washington's less-famous side. Born in Washington, John started at The Post in 1989 as deputy editor in the Weekend section. View Archive

The shorthand I’ve been using for this phenomenon is “the Potomac rate,” i.e., the way some service providers base their fees on your Zip code, not the work you need done. On Wednesday I let customers vent about their experiences. Today, it’s the contractors’ turn. As I promised them, I’m not using their full names.

Felicity lives in Bethesda. She graduated from college with a healthy student debt and started babysitting to supplement her day job.

“When I started, I was only charging $10 an hour for one child, with an extra dollar or two for additional kids,” she wrote. “I quickly realized that babysitters in Montgomery County and the posher parts of D.C. can make $15 to $18 an hour easily. So, now I have two rates. New families who can afford it get my $15 base rate. However, if I know the parents work for a 501(c)[3], they get my $10 rate. Price gouging? Most definitely. But it paid for grad school.”

Michael is similarly charitable. He runs a computer service business and confesses to charging different clients different amounts for what may seem like the same work. “But this is not a matter of jacking up a price,” he wrote.

He says he has a standard price structure. Folks who can afford it pay it. “But when I drive up to a third-floor walk-up to service an eight-year-old computer for a person who is nearly blind, and who has asked if she can pay for the $100 service call over time, I’ll make sure that service doesn’t go any higher,” Michael wrote. “If it takes two hours, she’ll probably get a bill for a half-hour. Or I may ‘forget’ the travel charge or to bill for one of the parts.”

A licensed electrician named Ron put it even more bluntly: “The price I charge in Potomac is my REGULAR full price,” he wrote. “I give DISCOUNTS to hard-working, Joe Six-Pack types who live in modest neighborhoods who are trying hard to make ends meet. Maybe I just have a soft spot for the 47% who don’t have nannies, don’t shop at Whole Foods and don’t have a lot of extra disposable income.”

Ron said he doubts that his high-end customers would mind that he does the same work for 20 percent less for some clients. “For my high-end demographic, it is about quality of work and respect for their time (i.e. showing up on time, doing the job in the time estimated, not having to come back). To them, time is much more important than money.”

Ed, a painter who works in our area, echoed Ron’s observations: “Folks who can afford to pay full fare often would rather pay even more if it makes it more convenient for them or takes less of their time or winds up with a result that is more efficient for them. So even if some other contractors may charge a ‘Potomac price,’ there may be ‘Potomac service’ that goes along with it.”

Ed went further, insisting that not only is the service different, but also that the customer is different — and not necessarily in a good way. Wrote Ed: “In the Palisades of N.W. D.C., I might have to build a platform over a prized rosebush to assuage their fears about me crushing it, while a less uptight Herndon client is not burning energy worrying about it, having gauged us to be folks who aren’t negligent in ladder placement.”

His point isn’t necessarily that less-wealthy customers have lower expectations, but that some wealthy customers are needlessly picky:

“Painting a house in D.C. is the same as painting a house in Herndon, but I’m much more likely, statistically, to be called back to the D.C. house and be asked for something not in our scope than I am in Herndon.

“Profit is profit, and we need it to survive, but I honestly tend to have the best profit come from jobs not in the McLean ‘zone.’ For some folks, dealing with a contractor is a sport, like eating a restaurant meal and seeing if your feigned dissatisfaction can get that meal for free. We can’t always spot those folks coming, but there are more of them, percentage-wise, in the Potomac/McLean zones than in the rest of Fairfax County.”

I’m not sure I buy these various arguments — it’s a thin line between not getting the poor man’s discount and getting ripped off — but I appreciate the candor.

For previous columns, go to washingtonpost.com/johnkelly.

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