Say Goodbye to the ‘Millennial Lifestyle Subsidy’

The era of cheap, on-demand services is coming to a close as unprofitable startups face the realities of capitalism.

2 minute read

June 14, 2022, 11:00 AM PDT

By Diana Ionescu @aworkoffiction


Writing in The Atlantic, Derek Thompson warns of the “end of the millennial lifestyle subsidy,” that blissful era when Uber rides across town cost a few dollars and you could have a meal delivered from any restaurant for a nominal extra fee. “Almost each time you or I ordered a pizza or hailed a taxi, the company behind that app lost money. In effect, these start-ups, backed by venture capital, were paying us, the consumers, to buy their products.”

Yet investors continued to support companies that grew their user bases while losing money. “As long as money was cheap and Silicon Valley told itself the next world-conquering consumer-tech firm was one funding round away, the best way for a start-up to make money from venture capitalists was to lose money acquiring a gazillion customers.”

Now, those companies are facing a reckoning. “These start-ups weren’t nonprofits, charities, or state-run socialist enterprises. Eventually, they had to do a capitalism and turn a profit.” By 2022, “Rising interest rates turned off the spigot for money-losing start-ups, which, combined with energy inflation and rising wages for low-income workers, has forced Uber, Lyft, and all the rest to make their services more expensive.”

Meanwhile, improved labor market conditions mean that workers have more leverage over employers. “Today, job openings are historically plentiful and nominal wages are rising fastest for low-income workers.”

It turns out, Thompson concludes, “The golden age of bougie on-demand urban-tech discounting has come to a close.” We may now have to go back to paying the real cost of products and services.

Monday, June 13, 2022 in The Atlantic

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

White and purple sign for Slow Street in San Francisco, California with people crossing crosswalk.

San Francisco Suspends Traffic Calming Amidst Record Deaths

Citing “a challenging fiscal landscape,” the city will cease the program on the heels of 42 traffic deaths, including 24 pedestrians.

July 1, 2025 - KQED

Google street view image of strip mall in suburban Duncanville, Texas.

Adaptive Reuse Will Create Housing in a Suburban Texas Strip Mall

A developer is reimagining a strip mall property as a mixed-use complex with housing and retail.

5 hours ago - Parking Reform Network

Blue tarps covering tents set up by unhoused people along chain link fence on concrete sidewalk.

Study: Anti-Homelessness Laws Don’t Work

Research shows that punitive measures that criminalized unhoused people don’t help reduce homelessness.

7 hours ago - Next City

Aerial tram moving along cable in hilly area in Medellin, Colombia.

In U.S., Urban Gondolas Face Uphill Battle

Cities in Latin America and Europe have embraced aerial transitways — AKA gondolas — as sustainable, convenient urban transport, especially in tricky geographies. American cities have yet to catch up.

July 6 - InTransition Magazine