Flexible workspace and co-living means renting a desk, an office, a bed or a flat in small units and for short periods, instead of signing a long lease. The industry calls it flexible space. It covers coworking, a shared office where people rent desks by the day or month, and managed offices, whole offices that an operator sets up and runs for one company. It also covers co-living, furnished rooms in a shared house, which is the organised version of the PG; student housing; and short-term rentals of furnished flats.
How does the business work? An operator usually takes a whole building, or one floor, on a long lease from its owner. It furnishes the space and rents it out in small units, at a higher price for each unit. Some operators share their income with the owner instead of paying a fixed rent. Either way, the operator earns only when the space is full. An empty desk or bed earns nothing. So occupancy, the share of the space that is rented, is the number every operator watches.
Here is a typical case. A freelance designer moves from Lucknow to Hyderabad, where most of her clients are. For the first week, she books a furnished one-bedroom flat in Gachibowli for ₹3,200 a night. A vacation rental management company runs the flat for its owner. From the flat, she visits three co-living houses that she found on a co-living operator's app. She books a bed in a two-sharing room for ₹14,000 a month, with Wi-Fi, cleaning, laundry and two meals a day included. She pays one month's deposit and the first month's rent by UPI in the app. For the days when she meets clients, she uses a coworking booking app to reserve a desk near Hitech City for ₹450 a day. When she arrives, the coworking space's access control system reads the QR code in her app and opens the door.
Two kinds of companies serve her. Operators run the space themselves. Marketplaces run no space. They list the spaces of many operators and take a fee on each booking. The difference is explained in marketplace vs inventory model.
Why is this a software business? Booking, payment, rent collection, entry to the building, cleaning schedules and complaints all run on software. So does pricing. A desk on a Monday, a bed in July when graduates join their first jobs, and a flat on a long weekend are all worth more than the same space on a quiet day. Software sets the price for each night or each month from demand, as airlines and hotels do. This is dynamic pricing. Operators compete on how well their software keeps every desk and bed rented.