WeWork’s impact—and public messaging—has traditionally focused on what happens inside its doors, extolling startup and entrepreneurial success stories. But now as the company plans to go public, the coworking firm is trying to make its neighborhood impact one of its selling points.
On the same day Bloomberg is reporting WeWork confidentially filed for an IPO back in December, the coworking company released its first Global Impact Report. Prepared by HR&A Advisors, the report offers WeWork’s case for being a force for good for the 100-plus cities where it serves more than 400,000 members.
”WeWork has created the physical-world equivalent of a digital platform, generating value by imprinting design onto physical space, which leads to network effects at both the individual and institutional levels,” according to Dr. Arun Sundararajan, professor of business at NYU and author of The Sharing Economy, who is quoted in the report. “Its global constellation of companies and entrepreneurs allows members to tap into and realize value from these economic spillovers, within their local communities, and across cities.”
The top line numbers are impressive. WeWork, which directly employs more than 11,000 employees, supports an estimated 680,000 jobs and is connected to $122.3 billion in total GDP worldwide within its workspaces. While it’s important to state that the company hosts that much economic activity and didn’t directly create it, it also goes to show the firm’s potential to shape the behavior and activity of such a sizable part of the workforce.
The report goes on to dig into that GDP figure. Supporting $122.3 billion in global economic activity—$74.8 billion directly and $47.5 billion indirectly—is significant. If the WeWork economy was its own city, its GDP would be equivalent to the output of cities like Vancouver or Austin.
But it’s not merely scale. The report found that 1 in 8 first-time entrepreneurs in major U.S. cities are WeWork members, and 83 percent of members are in the innovation economy (defined by sources such as the Brookings Institution as being “part of 58 high-value and high-growth industries such as technology, creative, professional services, and advanced manufacturing”).
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One of the cities that gets more focus in the report in Los Angeles, which offers 25 locations (full disclosure: Vox Media rents office space from the Hollywood WeWork location). Like other U.S, locations, WeWork claims it can save startups and small businesses money: the authors found a company of four can save $17,500 on average with WeWork over traditional commercial real estate.
According to the report, 28 percent of WeWork members visit local neighborhood restaurants, cafes, and businesses daily, and 74 percent of WeWork members in Los Angeles did not work in the neighborhood prior to joining WeWork, bringing more activity and spending to the area.
“Since WeWork Burbank opened up our sales have skyrocketed—both in foot traffic and catering orders,” James Lewis, general manager of simplethings restaurant, a WeWork Burbank neighbor, told the report’s authors. “Our teams are now close and there’s just a good energy in the neighborhood. We couldn’t be happier to have WeWork as neighbors.”
Some, or much, of this spending or activity would have taken place regardless if a member worked in a WeWork or elsewhere, suggesting spending may be more concentrated, as opposed to dispersed, due to WeWork’s impact. Much of what is measured is cannibalizing existing spending.
WeWork’s value in clustering workers seems akin to Richard Florida’s take on cities and the creative class (for better or for worse). While it’s hard to quantify, the network effect created by WeWork can have positive impacts on reducing transit and transit emissions. Merely offering closer options for commuters, or allowing companies to cheaply set up new branch locations, leads to less travel and more efficient use of space. The report found that 1 in 10 workers moved closer to their WeWork location since starting to work in one of the coworking spots, and 69 percent of members use sustainable forms of public transit such as walking, cycling, or public transit, compared to a 19 percent U.S. average in big cities.
Not just developing, but designing, neighborhoods
WeWork has the data to analyze operations on a neighborhood scale, and it’s looking at its impact on that level. Dave Fano, the company’s chief growth officer, told Curbed earlier this year that the company has already begun “programming at the urban scale or neighborhood,” and in March, hired designer Di-Ann Eisnor and Dror Benshetrit as part of a larger future cities initiative.
In addition to having the data and analytics to begin to understand larger-scale urbanism and real estate questions, WeWork has proprietary deal-tracking software that evaluates potential buildings and helps determine membership prices for new locations. The company has launched a new type of space, such as a private coffee shop or oversized meeting room, meant to be shared among WeWorks members in particularly dense neighborhoods.
With the density of spaces WeWork has in places such as Manhattan, opening these spaces lets the company “diversify its experiential offerings.” Fano describes it as an elastic physical platform. Currently, 19 cities around the globe currently boast 5,000 or more WeWork members each, suggesting plenty of opportunity to refine and expand this part of the business.
WeWork’s global impact report leaves some questions, but also provides some answers about how the company is looking at its own performance. The next stage, if it wants to continue improving its impact, may be asking itself harder questions.
The company selects spaces, on some levels, based on density; can future locations, using the company’s data, be positioned to better cut into member commute times? Can they be positioned to open up opportunity in underserved neighborhoods and offer more access to startups and entrepreneurs of color (building on the work done via WeWorks Labs and many in-house programs supporting entrepreneurs and small firms)? This kind of document can be shorthand for a company’s values. It can also be the beginning of increasing an organization’s impact.