This Israeli App May Help Solve Coworking Spaces' Coronavirus Problem

As clients flee to work from home, the shared office space industry is trying to adjust its model ■ A new service allows employers to compare prices and rent offices by the hour

Amitai Ziv
Gili Melnitcki
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A Mindspace shared office in Tel Aviv, February 12, 2020.
A Mindspace shared office in Tel Aviv, February 12, 2020.Credit: Moti Milrod
Amitai Ziv
Gili Melnitcki

It’s not just the office market that has taken a beating from the coronavirus pandemic. Shared office space companies – not long ago regarded as the wave of the future – have seen their clients flee, to work at home.

Operators are looking for creative solutions to lure them back, for instance, by offering to rent them offices by the hour instead of by the month, with no obligation.

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Eyeing the changing market, Spacing, an Israeli shared-office price comparison service, will be launching an app called Spacing Pass that lets users choose between different locations in Tel Aviv and Rishon Letzion. Employers will be able to use the app to reserve work hours for their employees to use as they need. A monthly subscription can be used to access conference rooms, lounges and the executive floors at hotels.

The Spacing Pass app.
The Spacing Pass app.Credit: Screenshot

Eitan Singer, Spacing’s cofounder, said he hopes to become the AirBnB of office space.

“Shared workspaces were among the first to be hurt by and have experienced a sharp drop in demand,” said Singer, who previously led the Zap price-comparison site and remains president of the Madlan property site. “The decline in Israel still hasn’t been reversed, so operators are looking for ways to bring back renters, even if it’s on a day-to-day basis. They’re willing to break the old rule requiring a monthly commitment.”

The office isn’t dead, just changing, he said. Workers have discovered during Israel’s two lockdowns that they are happy to and save hours of commuting time going to and from their offices, but many still prefer to go to the office at least part of the week.

Spacing co-founder Eitan Singer, April 3, 2019.
Spacing co-founder Eitan Singer, April 3, 2019.Credit: Tomer Appelbaum

The changes taking place in the labor market have caused employers like Google and the Israeli tech companies Wix and Fiverr to let their staff work where they choose, he said. So have many small and medium-sized employers. “It’s reducing the value of fixed office space,” he said.

The shift was already underway before the onset of the coronavirus, but the pandemic has accelerated it, promoting change now that Singer said he previously thought would take a decade.

Nir Kelner, head of The Brain Embassy, the global coworking unit at Adgar Investments & Development, has put his Tel Aviv properties on the app.

“The coronavirus period has been challenging, but people still want to feel part of something and look for human encounters,” he said. “One of the prevailing views in the office market now is that the hybrid work model – a combination of work at home and office – is the one that will become common after the coronavirus.”

Still, the model of workers coming and going, using shared space when they please, undercuts the model that shared-workplace companies had been marketing over the years: the concept of community as a product.

Among the shared-workspace companies that will offer space through the app are Mindspace, Be All, Urban Place and Embassy, a total of 100 offices and shared workspaces. WeWork has also joined, but only on a preliminary basis to offer conference rooms, not work stations. Only Regus, among the major operators, has opted out. One Israeli startup, Yotpo, which employs 300 people, has so far signed up as a user.

Spacing isn’t the only company in this field. The U.S. company Croissant, which operates in Tel Aviv, serves 35,000 subscribers who move from office to office. Among other things, Croissant offers a package of 40 monthy hours, plus another five for free, for 399 shekels ($118).

Another, Co-Workers, offers a subscription that enables users to move between more than 2,000 workspaces in 105 cities around the world, among them Tel Aviv. Users can order daily, weekly and monthly packages for one or several locations.

Ampersand, a co-working space aimed at the ultra-Orthodox community, Bnei Brak, November 1, 2018.
Ampersand, a co-working space aimed at the ultra-Orthodox community, Bnei Brak, November 1, 2018.Credit: Eyal Toueg

When it goes live next week, the Spacing app will in effect serve as a digital wallet for office space. The user will be able to buy as many credits as he or she wants and spend them according to the various rates at different locations. Annual subscribers get a discount. Some of the workspaces – those that are best equipped and in the most central locations – go for 80 to 100 shekels daily; others for 55 to 65 shekels. The office space operator decides the rates.

The Spacing app not only brings more flexibility to the market for shared workspaces but also more transparency.

“Shared-office companies would prefer to turn back the clock and set prices and conditions with each customer individually and without transparency,” said Singer. “Disclosing prices benefits consumers and encourages competitiveness, which ultimately will improve the office product.”

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