San Francisco is a city that is perhaps best known for two things: serving as a mecca for tech startups, and featuring sky-high real estate prices and rents. Zumper conducted a national rent report in 2016 that ranked San Francisco ranked as the city with the most expensive rental markets, with a median of $3,590 for a one-bedroom apartment. These median rent prices for a one-bedroom apartment were higher than anywhere else in the nation.
Ben Yu, however, claims that San Francisco is “one of the cheapest places in America to live.” He claims to achieve this by way of living on discounts and free trials. Yu considers himself a bargain hunter. For example, online car sharing or peer-to-peer carsharing platforms like Getaround offers the first four hours of use for free and every hour after at a rate of $5. Additionally, many food delivery companies in the city offer $10 or $20 off of referrals and first purchases. Referrals and discounts seem to be Yu’s bread and butter to saving in a very high-cost city. Yu even partially financed the purchase of a used Mini Cooper using incentives on car-rental site Getaround, and using referrals from cryptocurrency exchange Coinbase, bought bitcoin that eventually grew to $140,000 in value.
The Wall Street Journal also interviewed software engineers Elad Ossadon and Noam Szpiro, who consider themselves “referring pros.” Ossadon and Szpiro are also the creators of VC Fund My Life, a curated list of coupons that seeks out the absolute best deals for users. On top of giving consumers a catalog of free stuff and coupons, users get a referral bonus. In their interview with The Wall Street Journal, Ossadon and Szpiro said that they had earned over $10,000 in referral credits.
The Perils of the “Free Offer”
While the promises of “free stuff” brought by these incentives are tempting, problems can arise from signing up for services and apps just to receive the discount. Many consumers can attest to checking bank statements and seeing a charge that they had no recollection of. According to a recent study conducted by AARP, 35 percent of Americans have unintentionally enrolled in an automatic payment plan for a good or service. Fifty-seven percent of adults ages 53 to 62 said they had made an unexpected automatic payment after starting a free trial.
Handy Technologies, a sharing economy company for residential cleanings and home services (and one of the companies cited in The Wall Street Journal’s article), reached a settlement with the Attorney General of the District of Columbia in June 2017 for engaging in dishonest policies, such as locking customers into “plans” for recurring services. Many users thought they were only paying for a single cleaning service but were shocked when they found out the charges were recurring. Handy books cleaning for their users, even if those users intentionally postpone cleanings they don’t want, in order to keep users in a pre-set “frequency” of cleanings (such as every week, every four weeks, etc.) Handy would assess a fee if users cancelled within 24 hours of the cleaning time, and would not refund at all if the user cancelled under a two-hour window.
While all consumers are looking for a good deal, it’s important to verify that these deals don’t end up costing more in the long run.