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The Sharing Economy Goes to the Office

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The Sharing Economy Goes to the Office

December 15, 2015

With only a click of the mouse, a revolutionary way to rent out office space is spreading all over the United States, allowing small businesses, entrepreneurs, and start-ups to use empty office space with no lease required and only a little cash. This new innovation of the sharing economy, known as office-sharing, is simpler, cheaper, easier, and much more efficient than a traditional lease.

The most popular company at the forefront of office-sharing is LiquidSpace, which operates (as do other office-sharing companies) like Airbnb. It allows individuals to rent out space in an unused office or commercial space for almost any length of time (an hour, 5 hours, a day, a week, a month, or even a year). 

Companies use a DASH (Direct Agreement for Space Hosting) License, which is a brand new legal framework that makes it simple to transact office space. Instead of going through a traditional lease, DASH is a much simpler and cheaper business agreement. Renewing a lease can take weeks and lots of money, but a DASH License is executed with the click of a mouse for a fraction of the cost of a lease.

Our economy is entering a stage of flexibility and increased efficiency never before seen. LiquidSpace and office-sharing in general is a consequence of this shift. More and more entrepreneurs need short-term space that will allow them to only pay for it when needed. This enables them to move locations whenever they need to conduct business elsewhere. For people who are frequently traveling, these spaces offer reliable Wi-Fi, office materials, and a business setting to those who only need it for a brief period of time.

Allowing short-term office space rentals enables some businesses to operate more efficiently nationwide or globally. No longer will these businesses be deterred from signing a long-term lease because they may only use a small portion of the lease contract. Now these businesses can rent out additional office space when it is needed knowing that they have no long-term commitment.

Office-sharing disproportionately benefits small- and middle-sized businesses and start-ups. For example, office-sharing opens up large buildings to businesses that would have otherwise been prevented from leasing due to high costs. It also provides extra cash to small businesses to help pay for their existing lease. It bridges the gap between wealthy and middle-class businesses by allowing them to both operate out of prestigious commercial real estate buildings.  In fact, some classy office spaces go for as little as $5 a day.

An office area isn’t the only type of space that business can use as an office. For example, SpareChair is a similar office-sharing company, but the difference is that it allows people to rent out parts of their home (or the whole thing) for a business or person to use as an office. Meanwhile, DeskTime, another office-sharing site, allows people to use dining room tables, recording studios, printmaking shops, and countless other locations as their own personal office space for a specified period of time.

The current worry amongst business executives at LiquidSpace and SpareChair is how the government may want to regulate them. Unlike with Airbnb, regulators and city dwellers seem to have no problem with a company renting extra office space outside a traditional long-term lease. And for good reason. With more than 10 percent of all commercial office property vacant and hundreds of millions of square feet going unused in business offices annually, there is a clear demand for office-sharing.

Office-sharing companies, such as LiquidSpace utilize empty office space much more efficiently, allowing for more companies and individuals to utilize space that would have otherwise gone unused. The individual or company that owns the space is receiving capital for their extra space. It is a win-win situation for everyone.

Regulators have yet to take action against office-sharing companies such as LiquidSpace and SpareChair, but with the hostile environment surrounding Airbnb, Uber, and other sharing economy companies. Let’s hope the benign neglect continues. It may only be a matter of time before they do. 

James Delmore is a contributor to Economics21. Follow him on Twitter @JamesDelmore1.

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