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What is Sharing Space Economy?
Space, as we know it today is being reinvented to be given a whole new meaning. Under the present sharing culture, it is being recognized as a profitable commodity in itself.
Space as a Service
Tiny cramped cubicles are a thing of the past. What we traditionally know as ‘private’ and ‘public’ space are disintegrating under the influence of the sharing space economy and technological advancement.
The need for fixed spaces has become obsolete. Shared spaces give you the option of choosing the kind of office you want, at a time that is convenient for you.
In the era of sharing economy, why should space be left behind? Companies are therefore capitalizing on the profitability of renting space as a commodity keeping in view the escalating costs of real estate.
Companies like WeWork, which leases and sublets more than 3 million square feet of space as a service, have assumed a property management role. They lease space wholesale from landlords and then sublets it, at a margin, in small blocks of floorspace.
They provide employees with facilities like high-speed Internet, snacks, printers and more. The “space as a service” model is even extending to residential space, which accounts for more than 20% of WeWork’s revenue in 2018 thus creating a niche sharing space economy.
This model is working out great for millennials, who tend to be less interested in settling down in one place and are inclined to move frequently in both their home lives and careers.
Employees are invited to complete their tasks in the space they are most comfortable in. Instead of assigning an employee a dedicated workstation where they sit all day, an organization provides them access to a variety of work areas that are reserved for specific activities.
When people are given the freedom to choose where they sit, they organize their schedule in a more efficient way. An activity-based workplace is more appealing to both introverts and extroverts since it provides open and closed spaces.
This involves sharing a workplace and that coworking is usually not employed by the same organization. Freelancers, work-at-home professionals who face problems of isolation (and distractions) at home find this a great option.
The synergy of people who value working in the same place alongside each other is all-encompassing.
A shared workspace differs in that they usually cater to and house more established businesses. They often provide more traditional amenities to meet the needs of their clientele.
Boost in Productivity
The open, harmonious work area fosters a better interaction among individuals. Cafes and common areas become a breeding ground for networking and sharing information.
It creates an opportunity to interact with people from varying professional backgrounds which can also easily be converted into generating leads and partnership opportunities.
Micro-rental is the hottest trend in residential real estate. Put simply: a company rents a large multi-room unit creates communal spaces and sublets individual bedrooms out to people on a short-term basis.
Co-living companies don’t own the property themselves but instead act as property managers. Living covers rent, cleaning, laundry, and more.
The startup company, ‘Common’ has recently raised $7.5 million in Series A funding and has announced the opening of a 51-bedroom residence in Williamsburg, NYC. This is the company’s 3rd building in the NYC borough of Brooklyn and the first ground-up development.
Airbnb is one of the most successful startups in the world. Launched in 2008, the company’s website and app connects hosts and travelers and facilitates the process of renting without owning any rooms itself. This builds a sharing-space economy by allowing property owners to rent out private flats.
Airbnb operates as a transaction facilitator between hosts and travelers who are looking for comfortable accommodation at a cheap price. the platform builds trust within the community of users and lowers transaction costs by providing host protection insurance, as well as a rating and review system. Profiles and user reviews help to create reputation and trust among participants of the marketplace.
Entry into the homebuilding business
Recently the D.C. Council unanimously gave preliminary approval for curbs on short-term rentals that puts limits on Airbnb and similar home-sharing services. This has spurred the company to expand into residential real estate and shared living space. model new ways to share and build homes
Airbnb’s 2019 is in the ‘Backyard’
Airbnb’s product development team, Samara, announced the project ‘Backyard’ in November. This initiative will prototype ways in which homes can be designed and built to accommodate flexible and shared living arrangements, while still being sustainable and adaptable.
Airbnb hasn’t released any specific details but its working at creating spaces that evolve and even reconfigure to the occupants’ changing needs.
The first wave of prototype buildings is slated for public release in 2019.
This is a significant opportunity for Airbnb to diversify its business. The company is a digital product, and always vulnerable to being replaced by an eager competitor.
Buildings are physical entities and the world’s infrastructure. This would be an excellent way of future-proofing itself by investing in real estate.