cheap fitness + other economically irrational decisions

I've had a lot of different relationships with the Berlin fitness industry since I moved here. I started as a genuine freelance Pilates teacher : renting space from studios, finding my own clients and using my own aggregator account. At the same time, I was also working as a freelancer for other studio owners. Then I opened a tiny studio where I worked completely alone, and then I expanded into a larger space and started working with freelancers myself for about a year before converting the business to an employment model.

So I've been the freelancer, the studio owner working with freelancers and the employer. I've depended on aggregators for my own income as an independent teacher and as a significant part of the economics of my business. I've benefited from this system and I've been fucked by it. Sometimes simultaneously. And after seeing it from pretty much every angle available to me, I think the biggest problem in the Berlin fitness industry is the aggregator economy we've built around it.

Third party aggregators in Berlin offer consumers unbelievable value for fitness. You pay one low monthly fee and get access to Pilates studios, yoga studios, gyms, climbing halls, swimming pools and countless other businesses across the city. When I first moved to Berlin and used an aggregator as a consumer, I kept thinking it was too good to be true. When I started depending on it for my income as a fitness instructor, I got confirmation that it was!

I don't think it's a coincidence that the aggregator economy has grown inside an industry that runs largely on freelancers. A cheap product or service depends on keeping the cost of labor flexible. A freelancer gets paid for the class they teach and often based on attendance. The studio doesn't pay them when they're sick or on holiday, doesn't make employer social insurance contributions on their behalf and can remove classes from their schedule when demand changes. That makes it much easier for a studio to accept a low reimbursement from an aggregator because a large part of the financial risk can be passed directly onto the teacher.

The problem is that a lot of this work doesn't really feel or look like genuine freelance work. I know the difference because I've done both. Renting a room, finding my own clients, setting my own prices and carrying the financial risk myself was genuine freelancing. Turning up at another business at the same time every Tuesday to teach its clients at a rate it determined was a very different relationship, regardless of the fact that I sent an invoice afterwards. Teachers work the same weekly classes, often for years, inside someone else's business, using someone else's equipment, teaching clients they didn't acquire themselves and accepting rates they have very little ability to negotiate. If all of those teachers were treated as employees and the real cost of their labor had to be reflected in the cost of providing a class, the economics of cheap fitness would start looking very different. The aggregator model doesn't technically require fake freelancing to function, but the version of it we've built in Berlin benefits enormously from it.

To solve this problem in the current state would require everyone involved to voluntarily act against their immediate economic interests.  I'll explain the issue with each of these options in more detail shortly, but the quick summary is this : You can't fix a system by depending on individuals to make economically irrational decisions. Consumers would need to voluntarily pay more for fitness they can buy cheaply. Teachers would need to refuse available work because accepting it undermines everyone's bargaining power. Studio owners would need to voluntarily choose a more expensive, administratively difficult and legally risky employment model while receiving exactly the same reimbursement from the aggregator.

I don't blame someone for buying an aggregator membership. If somebody offers you access to almost the entire the fitness industry in Berlin for a low monthly fee, why wouldn't you take it? Consumers can't be expected to investigate the labor conditions behind everything they purchase and voluntarily pay more when a cheaper, but equally high quality alternative is available.

I don't think studio owners are going to collectively solve the aggregator problem either. The studios being hurt most by the model have the greatest incentive to fight it, but they're often the smallest and have the least leverage. The aggregator doesn't need every studio to be happy. It just needs enough of them to be making enough money that they don't leave. Some studios have become extremely good at making the aggregator economy work for them: multiple locations with high volume and low cost, flexible freelance labor. And this is part of the reason studios haven't collectively successfully pushed back against the aggregators. Their interests aren't actually aligned.

A large multi location studio can make money from a reimbursement rate that is unsustainable for a small independent studio. More locations mean more aggregator visits, administrative costs spread across a larger business and a bigger pool of teachers and classes. These are also exactly the businesses that are most valuable to an aggregator because one partnership gives its members access to multiple locations. Then there are the studios sitting on older aggregator contracts with higher reimbursement rates per participant that are actively reducing the payout to the teachers!  Because when a studio wants to make more money, reducing what teachers receive is often the easiest option. The freelancing model makes that particularly easy. If a teacher doesn't accept the new rate, the studio can find someone who will. So instead of the studio passing the pressure back up the chain to the aggregator, it passes it down.  And as long as studios can protect their own margins by pushing declining economics onto freelance teachers, there isn't much reason for the businesses with the greatest bargaining power to rock the boat.

The obvious answer would be for teachers to organize collectively and refuse to work under conditions that make low reimbursement rates possible. But the threat for freelancers is that they're easily replaceable. If twenty freelance teachers decide that €30 a class is unacceptable, the collective action only works until someone else accepts €30.

And there will almost always be someone else. A newly qualified teacher who needs experience. Someone who lost work somewhere else. Someone who simply needs the money. Someone who just moved to Berlin. On that note, a huge proportion of the fitness teachers I encounter in Berlin are foreigners, myself included. I can't find demographic data showing what percentage of Berlin fitness instructors are foreign, so I can't claim that this is true across the whole industry. But it fits a broader pattern that has actually been studied in Berlin: immigrant workers are heavily represented in parts of the gig economy, particularly among recently arrived workers. And again, I don't blame the person who needs the money or experience for taking the class. You can't fix a system by depending on individuals to continually making economically irrational decisions.

So freelancers have very little security if they organize. A studio doesn't necessarily have to fire them. It can simply stop giving them classes. While employments doesn't eliminate exploitation, it does give workers considerably more security from which to fight it. German constitutional law protects the right to organize to safeguard and improve working and economic conditions. Employment also makes it much harder to simply remove someone from the schedule in retaliation than it is with a freelancer, although the specific level of dismissal protection depends on the circumstances.

Maybe that's actually one of the strongest arguments for employment in this industry. Not that employment automatically creates a fair relationship. It doesn't. But employment can give workers enough security to organize against an unfair one.

If the industry converts to employment and the teacher gets paid at the end of the month regardless of how many students were in each class, but the aggregator reimbursement is too low to cover the real cost of providing the service, then the pressure moves to the studio. This is where the interests of teachers and studio owners might actually start to align. The teacher wants decent wages and working conditions and the studio needs enough revenue to provide them. Neither ultimately benefits from an aggregator becoming powerful enough to dictate the price of the service they collectively provide.

That doesn't mean teachers and studio owners suddenly have identical interests. Studios still decide how revenue is divided and some will always protect their own margins at the expense of workers. And that's why I don't think organizing studio by studio is enough. A Pilates teacher at one studio and a yoga teacher somewhere else may have different employers, but increasingly they're working underneath the same aggregator economy.

The logical sequence would then be: teachers become employees, teachers organize across studios, and eventually they have enough collective power to challenge the economic conditions being imposed on the industry by the aggregators.

The fight isn't ultimately about whether one studio pays €2 more per class. It's about who gets to determine what the service is worth. If consumers are getting an unbelievable amount of fitness for very little money, somebody has to absorb the difference between what the service costs to provide and what the consumer is paying. Until now, freelance teachers absorbed most of it. Employment can move some of that cost onto studios. In an employment model, teachers still have to be paid when demand fluctuates. The studio can no longer pass every quiet class directly onto a freelancer. Sick leave, paid holidays and social never contributions become real costs.  holidays become real studio costs.  And if employment spreads, the aggregator will eventually have to respond to fixed and fair labor costs.

But how can teachers get the studios to voluntarily employ them? An employment model is also, in many ways, an economically irrational choice for a studio owner. It's significantly less profitable once you add employer contributions, paid holidays and sick leave while the aggregator reimbursement stays exactly the same. And it's logistically harder because fitness requires consistent teachers across mornings, evenings and weekends rather than the rotating schedules that make employment work in many other seven day businesses. When an employee is sick or on holiday, you're paying them while also paying someone else to teach their classes. Then there's the administration and legal liability. I spent a year defending an employment lawsuit that created enormous financial, emotional and time pressure and nearly made me close my business. Employment protections are important, but from the employer's perspective they also create very real costs and risks that don't exist to the same extent with freelancers.

I have much less sympathy for high volume, multi location studios making the same argument. Scale solves a lot of these problems. A larger teaching pool makes sickness, holidays and scheduling easier to absorb. Payroll, HR, administration and legal costs can be spread across multiple locations. If anyone in this industry has the resources to manage the higher cost, logistic difficulty and administrative burden of employment, it's them. Employment would still significantly reduce their profit margins, though, and I suspect that's the main reason many don't do it.

Without studios voluntarily adopting an employment model, the teachers would have to collectively organize to gain it. But workers shouldn't need extraordinary levels of solidarity and risk already precarious financial security just to obtain employment protections when the reality of their work already meets the legal test for employment. The state simply needs to enforce the distinction it already created. Until that happens, I don't know how anything will meaningfully change. While Germany isn't technically ignoring the fake freelancing and gig economy problem, it doesn't feel like it is proactively dealing with it either. Following court decisions that are supposed to clarify the distinction between freelancing and dependent employment for teachers, the government created a transition period for teaching work that can postpone social benefit liability from employment until 2028 under certain conditions. That transition was originally supposed to end in 2026 and has already been extended once. Germany is also in the process of implementing the EU Platform Work Directive, which is specifically concerned with employment status and working conditions in the aggregator economy, including situations involving intermediaries between platforms and workers. The current transition period actually allows arrangements that may ultimately be classified as employment to continue being treated as freelancing for social benefit purposes until the end of 2027 if the legal requirements are met. The immediate concern for the state doesn't seem to be working conditions or fair wages so much as employment status and social benefit liability. But maybe the motivation doesn't matter as much as the outcome. If enforcement pushes the industry toward employment, teachers gain more security and more protection to organize. And if employment forces studios to absorb costs that were previously passed onto freelancers, studios have a much stronger reason to push back against the aggregators too. That doesn't solve the problem, but it might finally put the people providing the service in a better position to challenge the companies determining what it's worth.

Because eventually something has to change. Aggregators pay more. Consumers pay more. Studios close. Or teachers continue subsidizing cheap fitness through lower wages and worse conditions. There isn't another option as long as the product remains irrationally cheap.