In 2015, jet-setting from Manhattan to Miami was a no-brainer for Samantha Chin, 31. It cost just $82 a night to rent a room on Airbnb in a luxury apartment she had all to herself. Palm trees were the backdrop for selfies on her private balcony with bay views, and poolside access was just an elevator ride away.
“People thought I was living in Miami because I was going so often and posting about it. They had no idea I was just finding these cheap Airbnb rooms that were way more affordable than hotels,” Chin recalled. She paid $113 in 2017 for a similar downtown Miami apartment — a subtle price hike, but still worth it.
“The views were amazing and I was so close to all of the restaurants and bars I wanted to try,” Chin recalled. Today, comparable one-room Airbnb stays in downtown Miami are priced at upward of $184 per night on a weekend, and Chin can only afford getaways once or twice a year.
“I long for the days that I could stay in Miami for the price of a sushi dinner,” she lamented.
For much of the past decade, millennials like Chin lived Kardashian lifestyles on Kmart budgets. Startups like Airbnb, Uber, ClassPass and MoviePass had venture capital to blow and were eager to gain subscribers quickly and eliminate the competition. They kept prices unbelievably low, profitability be damned. Silicon Valley was happy to subsidize things — until now. The avocado toast generation, known for complaining about guac costing extra, is having to pay up or downgrade their once lavish lifestyles. And they’re not happy about it.
“It was so cheap,” said Tegan Nelson, a 29-year-old who mourns the 2019 passing of MoviePass. “It allowed us to do fun things for a low price; we didn’t have to worry about not being able to afford actual expenses otherwise.”
The Omaha, Nebraska, administrative assistant fondly remembered the good ol’ days of paying just $9.95 a month to see dozens of movies in theaters with the subscription service. She joined the platform in May 2018 and said, at the time, she was seeing at least four movies per month. It was a refreshing change from her college days in The Bronx when she’d spend upward of $15 to see movies in Manhattan. She knew it was too good to be true.
“I remember when we got it we said, ‘There’s no way this is sustainable for them but we’re going to use it while we can,’” Nelson said.
Nelson realized it was the beginning of the end in July 2018 when MoviePass implemented a “peak pricing” feature that had users paying additional fees during high-demand times. Then, a month later, she got an e-mail from MoviePass notifying her that she and fellow users would be capped at seeing just three movies per month for the same $9.95. After the service shut down in 2019, she started seeing fewer movies in theaters.
Peter Boatwright, a professor of marketing at Carnegie Mellon University’s Tepper School of Business, said the underpriced services many of these companies offered in their early startups days were bound to go up with time.
“It’s more expensive to acquire customers than retain them. These early startups are going to spend big on customer acquisitions in hopes that retention costs would be a lot lower in the long run,” Boatwright said, explaining that the gradual price hikes are even more apparent now. “With inflation, these costs have already gone up and people are paying attention because they’re sensitive to the drain on their wallets. If we remember how little we were paying, this increase is all the more noticeable.”
Adem Selita, a 31-year-old from Staten Island, has certainly noticed how much more he’s paying on the food delivery app Seamless. He fondly recalled getting a promotional e-mail in December 2016 advertising in big bold letters: “$8 off your next Seamless order of $10+ when you pay with PayPal.” He ordered two cheesesteaks and fries for around $14 and paid just $6. Such deals allowed him to order food nearly five times a week.
“They would hit you with promotions as soon as you’d open the app. When they onboarded new restaurants, the restaurants would give discounts too,” Selita recalled.
Now, he’s paying $14 for a single cheesesteak, plus taxes, fees and gratuity.
Selita also recalled the cheap glory days of Uber. In 2013, when he was a student at NYU, he would take Ubers — often town cars or massive SUVs — all around the city for just $5 or $10, thanks to heavy promotions and discounts. He felt like he had a private driver.
“I would take [Ubers] all the time. Nicer cars were given way more frequently, and I don’t think I ever paid extra for the larger vehicles, That’s not something I’d usually do today unless I was with a big group of people,” Selita said.
These days, he has to limit his food delivery to just once or twice per week and rarely uses Uber.
Meanwhile, Chin said she’s having to work harder and bring larger clients in to the hospitality company she works for in order to keep up with her expenses. And, even then, she’s cut back. Since blowouts now cost upward of $60, not a mere $29 as they once did with the defunct subscription service Glam + Go, they’re not something she does as regularly.
“I used to go before dates just because it was such a great deal,” she said. The same goes for pedicures, which are now a special occasion, not regular maintenance.
With various beauty and grooming things, she said, “I’ve learned to either do them myself or do them way less often.”
Even though she’s making more than she used to, she’s not living as large as she once did.
“Obviously everything added up, but I was like, ‘This is such a good deal I can’t say, “No,”‘” she said. “My lifestyle was aspirational in many ways, [but] from the outside looking in, it looked glamorous.”