Photo by Jen Theodore on Unsplash

Just over a week ago I published a piece on Urban Sports Club that was followed by a council of yoga teachers here in Berlin. Many teachers of different backgrounds joined in, and many more were interested to receive meeting notes, as they all found this subject extremely important.

In my first article, discussing the failed promise behind Urban Sports Club, I used information gathered primarily from studio owners in my network. Meeting with these yoga teachers has proven to be very insightful on different levels and inspired the continuation of the discussion.

Before I proceed, I would like to mention that since the first article was published, I received many emails, messages, and comments supporting my observations in one way or the other. It is thanks to the collective intelligence of these individuals that I’m able to provide new angles to this story.

A quick summary of the Yoga Teacher’s Council

1. Yoga Teachers as Partners:

  • Get much worse deals in terms of payment per attendee. Because they don’t have big businesses behind them, they are considered a partner of a lesser value, of a second grade
  • Are at the same time extremely dependant on the platform to the degree that if something happened and they were not on Urban Sports Club, they would have empty rooms to teach in
  • Do not strike me as “in love” with the service, and use it as some kind of “necessary evil”, meaning that if they had a better option, they would be happy to switch

2. Yoga Teachers are Concerned:

  • About their student’s ability to pay for their classes and sincerely like the idea that the platform offers a more affordable option to these people who cannot afford studio classes
  • To see the behaviour problems that Urban Sports Club encourages in their members, such as studio/teacher hopping, devaluing of their services, and superficial fitness expectations
  • Wether yoga studios will join the movement towards re-negotiating terms and conditions with the Urban Sports Club, or towards finding a completely new way of doing their business

3. Yoga Teachers are Ready:

  • To take an action against Urban Sports Club
  • To connect and come together as a community, not competition
  • To fight for their rights and better working conditions in regards to the platform in particular and as yoga professionals in general

In order to understand just how grave the problem with Urban Sports Club is, consider this

Urban Sports Club affects the wages of individual teachers/instructors/coaches

Wether directly (through pay-outs to the freelance partners) or indirectly (through pay-out to the studios), the teachers primarily get paid according to the number of participants in the class, and not according to their qualification, level of expertise and experience. Currently and generally speaking, the wages are not going up, they are going down.

Urban Sports Club has the power to disrupt the unregulated yoga market

There is no doubt that Urban Sports Club (or a similar service provider) is a serious player to watch out for. While the platform runs on venture capital investment (Rocket Internet, btov Partners, Holtzbrinck Ventures, and recently Partech) and is in the process of taking over the world (7 countries already), it still plays relatively nice: it offers membership deals that are too good to be true (because they want to get as many people on the platform as possible), and relatively OK payoffs and conditions to the partners (because they want to have enough attractive offers to attract the new members).

The question is, for how long will this honeymoon period continue before Urban Sports Club: 1. Gains a monopoly and starts changing the rules of the game to their advantage (creating bigger profit margins by cutting down on partner pay-outs); 2. Disrupt the industry enough to put out of business the very service providers that made the platform possible to exist in the first place (freelance teachers and partner studios); 3. Change their business model or service to the extend where they would not need their partners anymore, or worse, would need to destroy them as direct competition?

Urban Sports Club is under a lot of pressure and doesn’t seem to care about their partners

With all of these investments behind them, the platform is in a state of super aggressive expansion. It buys out smaller competition (fitengo in 2015, 99gyms and SoMuchMore in 2016, Bonofit in 2019) merges with other big players (Interfit in 2018, OneFit in 2019), and is heading towards a fierce battle against Class Pass, a US-based service on the market since 2011.

Meanwhile, Urban Sports Club still needs to prove itself as a profitable business before the founders and the investors can cash out via IPO or some major acquisition. I can imagine the team feels a lot of pressure on their shoulders and maybe that’s partially why they are not really thinking about what exactly they are doing to the yoga/fitness/wellness market in the process.

Urban Sports Club can take away the studio’s most precious asset: its members

According to one studio owner from a big city with whom I had a face-to-face chat just recently, if a studio owner needs to take out a credit from the bank, the first thing they are being asked is how many members they count among their customers. Based on these numbers, the bank makes a decision wether the studio can be used as a collateral against the loan.

Let’s pretend a happy with Urban Sports Club partner is so inspired by their experiences that they decide to open a second studio as a result. If they don’t have enough savings, rich parents or friends, they are mostly likely going to be refused the credit in case they fail to provide a substantial number of own studio members subscribed to their contracts. The bottom line: the bank doesn’t care how many USC people come in and out through your door.

Urban Sports Club possess valuable data that can directly affect their partner’s business

Again, thanks to the undisclosed studio owner I mentioned above, this information became available to me. If a studio owner, for the reasons of saving on money or out of pure convenience, decides to use Urban Sports Club studio management software FitogramPro, they basically send all of their business-sensitive data to the platform: how many customers they have and where they are coming from, which are the more popular classes and times, and how much money they make. This data can be used against the studio to: re-negotiate deals and contracts, change their partnership conditions, or simply put them out of business on a whim.

Of course if we were in the USA, this and the personal data of the platform members would be sold to third parties for profit. Luckily, here we have Data Protection Laws to keep people safe.

Urban Sports Club can dictate the content and the quality of the yoga classes

Either directly through their in-app reviews system, or indirectly through the accommodation to the needs of the hopping consumer, the partner studios are giving away their sense of agency and what is right for them and their students. For sure some studios can and use the platform to make money and to create better, or rather, commercially more successful products, but there is something important lost as a result. This something is integrity, quality, and authenticity.

Urban Sports Club can create conflicts in the air, literally

Dissatisfied partners, teachers, and consumers, through for different reasons, come together in a physical space that can sometimes be either too empty (because of the lack of own members at the studio), too crowded (because of the overabundance of Urban Sports Club members), or too awkward (because of the differences in expectations between the regular yoga students and the temporary visitors). Oftentimes the atmosphere is felt as this dark cloud hanging over the place.

Urban Sports Club can destroy your premium/boutique brand

How special is it to be on a platform that is like Groupon for fitness? Many studios that have spent a lot fo time, energy, and money to build a certain quality or a brand around their location, service, teachers, or celebrity culture are now looked at from a totally different angle. Even if these brands put themselves on L/XL membership only, the fact still remains: they are not confident enough to stand alone, they too had to bend the knee.

Urban Sports Club doesn’t allow their partners to speak up

Being a partner on the platform, you are bound by contracts, NDAs, or subtle psychological pressures not to speak up openly, not to come together and share with others, not to discuss or argue, and depending on your “social standing” and partner status, most likely you’re not going to be heard by the platform itself. Many people have tried to speak to them in a nice way, to enter into a dialogue, but Urban Sports Club seems to be too busy taking over the world to see what is happening in their own backyard.

Urban Sports Club may gives their partners a fake sense of confidence

Wether the partner studio loses or gains financially from being on the platform in a short run is actually irrelevant, because in the long run, the way things are going now, partners seems to lose by: seeing the average teacher wages going down, over-relying on the platform for filling up their classes, not being able to take out a credit to expand on their businesses, over-sharing sensitive business data that could be used against them, giving up on their integrity and lowering their class quality to accommodate the new consumer attitudes, seeing their premium brand become worthless, seeing their loyal members convert to become platform members, watching their best teachers leave due to worsening working conditions, this and other things are already happening and there is more to come. Fun times on the way!

Urban Sports Club is not so much a cause of the disease, it’s a symptom

To be fair, I should mention that Urban Sports Club is not this evil conspiracy whose sole purpose is to kill off the yoga industry in Berlin, Germany, or the rest of the world. Urban Sports Club is more like an example of the blind leading the blind. And sadly, there are not the only platform out there that is doing this. They may have started with this great idea and a positive intention (aside from the fact that it is a startup and the people behind it do want to get rich), it’s just in the process things started to go wrong and it seems that the team behind Urban Sports Club are not willing to face this crisis. 

Photo by James Pond on Unsplash

Working towards the solution: what can be done at this point

The problem is that the partners are on the contract, some for the next 2-3 years, some have became so dependant that they cannot imagine their life differently, even if they do not like what they see and experience. This means the range of possibilities is limited, but there are a few options:

1. Moving the yoga offer towards L-membership

The freelance yoga teachers of Berlin propose to move the whole set of yoga offers from M (59€/month) to L (99€/month) membership. This would result in the bigger partner pay-outs and consumers valuing yoga as something that is special and to be taken seriously.

2. Making the pay-outs standardised and transparent

Some teachers would like to have a standardised way of processing pay-out that is based on a set of criteria or variables, that is transparent and not case specific, listed on the platform openly and available for everyone to look up, from other partners to the end consumers themselves.

3. Educating the end-consumer about the negative effects of USC on yoga businesses

Some teachers proposed to speak to their USC member students directly, others wish to spread the word of mouth via the network of teachers and students here in the city. I personally think that the media has to get involved, and ideally an independent research institution should be hired.

4. Asking for support from BDY

Maybe now it the time that the Professional association of yoga teachers in Germany e.V. gets involved and uses this chance to become a relevant modern-day institution that can represent the rights of the yoga teachers on the national level. Teachers would become members as a result.

5. Creating a legal lobby to represent yoga teachers

This option is a little more complicated, but something like this needs to happen as the industry has matured enough to get an official recognition on the government level. Many teachers are interested in this option because they understand that the market has to be regulated.

6. Creating a yoga teacher’s union

Some people lean towards this option, but I’m not convinced by it myself. It sounds like a lot of work and organisation and I’m not going to take on this work alone. I’m happy to stay an independent observer and a facilitator of exchange in the community, but that’s about it.

7. Switching to a better platform

There is nothing wrong with middle men services or aggregator platforms in the principle. Yet, how these platforms make their money, how they are treating their partners and how much power they are given as a result has to be carefully managed. These platforms are there to serve us, not to destroy us!

8. Creating our own network

For these studios and teachers who are not Urban Sports Club partners, this is what we can do: we can come together as a community, not a competition, collaborate and create some kind of a network or establish a partnership program that enables our students to travel to different cities or just different studios in the same city and enjoy all of our classes or discounts on them in some kind of well-though out way that benefits everyone, the service providers and the end consumers.

9. Creating our own platform

That’s taking point #8 a step further. I’m sure in our community there are all kinds of talented people who could come together to make a better aggregator platform solutions for all the yoga offers out there in the market. Why not dream big? I would be in!

10. Joining in forces

In any case, this is a necessary condition for any action to stand up for our rights!

Sources:

I base my opinions and predictions on the research I did online in regards to ClassPass (USA equivalent of Urban Sports Club), talking to studio owners in my network (Berlin, Germany, UK, and Poland), as well as talking with freelance yoga teachers in person and online.

Further readings:

Fast Company: Is ClassPass Model Sustainable?

Business Insider: Boutique Fitness Market Facing Pressures

Medium.com: An In Depth Startup Analysis – Is ClassPass the Next Unicorn or the Next Bust?

Is ClassPass® Right for Your Studio?