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Is Classpass Hurting Our Local Gyms? (Updated)

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<a href="http://rebeccadalephotography.com/">Rebecca Dale</a>
Rebecca Dale

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Maybe you're already on the Classpass grind, or maybe you've just heard everyone—including this site—talk about it. The program that charges $99 a month for access to hundreds of fitness studios across New York City (and dozens of others, too) has largely drawn praise for bringing often pricey boutique workouts to the masses. But its secret downside? Your gym-hopping way could be hurting indie studios's bottom lines.

"We've definitely lost a significant number of membership people to ClassPass," Karla Misjan, co-founder of Syncstudio, recently told the New York Times. When a Classpasser drops in for a yoga or cycling session at the Williamsburg studio, Classpass pays them less than their usual $18 single-class rate—which is relatively cheap compared to other places.

"A full class running at half the cost doesn't make you money," Ashley Lively, the other co-founder, added. "Sometimes, the economics don't make sense."

As economics professor Susan Athey previously explained to Racked, studios could be using Classpass to fill empty spots in their classes, which would mean that they're only gaining money. But "things start to change though if people stop buying through your studio and start using the platform exclusively."

"It’s more than direct competition," said Lively. "It’s fierce competition."

However, Classpass co-founder and chief executive Payal Kadikia told the paper that their latest round of funding—$40 million in venture capital—would in part assist in keeping studio payouts stable.  "It's not just about discounted pricing but making sure each of these studios is growing," she said.

Update: We recently spoke with Misjan and she adds, "While we have lost members to ClassPass, the volume of students we gain on a daily basis makes up for it! It has been sad that our former 'regulars' can now only come 3 times per month, so we are slightly losing that community feel, but the marketing we gain from ClassPass is huge. It is a mutually beneficial relationship."