This essay is a classic reference point for the early-twentieth-century critique of rationalization and modernity, and it exists in close dialog with work of Max Weber and Georg Lukács on the same topic. Lukács cited Simmel's Philosophie des Geldes in his titanic essay on reification in Geschichte und Klassenbewußtsein, and the influence of this work on his thinking is immediately obvious.
Simmel argues that in order to function, large cities must rationalize their social interactions to make them predictable and orderly. In one telling example, he points to the pocket watches that everyone carries, in order to coordinate themselves in terms of a superordinate, regulating conception of time.
The standardization that results from this rationalization, he argues, tends to drain experience of its individual color, and here one detects distant echoes of Hegel and Marx.
Simmel also calls out the pace of modern life as placing novel demands on our attention, and describes the characteristic mode of life in the city as blasiert, or blasé. In his view, the high frequency of inputs, along with constant changes and demands for our attention, cause people to rebound into a kind of studied indifference, and he sees this as especially impactful on our social interactions. People in modern cities, he reports, barely have the mental capacity to acknowledge their neighbors with a smile or even a glance, and when they do form groups, they tend to maintain strict boundaries, so they have space and security to allow their peculiar personalities to unfold with one another.
Having lived in Berlin for the last six years, I will tell you with 100% certainty that what he is describing here is not typical of modernity as a whole, but is completely typical of this city. Simmel was born in Berlin, went to school at Humboldt University in the heart of the city, and as far as I know, lived here until shortly before his death. The frosty standoffishness he describes and the tendency to socialize in little groups is completely typical of Berlin, but not at all typical of Paris, London, San Francisco, or New York, or probably even Munich or Cologne.
On this basis, I think Simmel somewhat overgeneralizes from his own experience and mis-diagnoses the social malaise he experiences as stemming from various features of modern life, when some of them would seem to me to be clearly rooted in peculiarities of local culture.