Living As a Service or LaaS is part of what is called the “sharing economy”, a concept that dates back to a long time ago but has gained momentum in the past couple of years with the result of various new ways of offering products to customers. Everything can be put on a sharing platform nowadays to optimally use a product or generate income from it, think about car ride-sharing.

The rising demand for housing and increasing housing prices due to a growing population and a growing amount of skilled workers from the emerging economies play an important role in the way people will live in the (near) future. Instead of conventional housing where everything has to be bought and decorated from scratch with the aim of living there for years or a lifetime, a substantial amount of current and future workers are expected to opt-in for temporary housing at their work location or from a remote place by living in a co-living space or serviced apartment. The millennial generation also seems to care less for owning assets and tends to focus more on having a good quality of life consequently creating an ideal environment for “living as a service” to thrive.

What is the difference exactly?

So, what is the difference between conventional housing and LAAS? Depending on what type of LaaS accommodation you prefer, the prices and quality will range according to your budget and preferences. In almost all LaaS accommodations, there are some things that are included, such as high-speed internet, furniture, fully equipped kitchen, gym facilities, laundry facilities and cleaning services. It depends on the type of accommodation you need and the extras you can afford.

LaaS can be divided into various sub-categories such as co-living, which is meant for (remote) workers also known as digital nomads, typically millennials, who work abroad and want to socialize with other people as well, being in communities. The socializing aspect involves events organized by the co-living space provider or other organizations the provider may work with.

Another significant part the LaaS market is comprised of demand for serviced apartments. In contrast to co-living spaces or hotels, serviced apartments are more focused on providing privacy for their target group and generally do not have “shared spaces”, and also differ in price and quality depending on the location.  That is why serviced apartments are usually marketed for business travellers.

The number of people living in cities will increase with 1.2 billion people between the years 2015 and 2030. This is a significant increase that conventional houses may not be able to absorb. This is another crucial case for LaaS to become a viable/better option in the coming years as opposed to conventional housing.

So, who prefers “living as a service”?

Digital nomads and other business travellers that go on long term assignments abroad probably make up the largest amount of the total population that prefers it. The convenience that temporary accommodations have on them is tremendous, especially if one thinks about the amenities that come with it, leaving more time for leisure activities and less worry on the time-consuming activities that would accompany moving elsewhere.

In essence, the key features of LaaS are that in contrast to ownership it involves renting an accommodation temporarily with the essentials you would need in a conventional house as well as extra cleaning services and depending on the provider, a common space to meet other likeminded people as well as a part of the arrangement.

 

By Selcuk Salman

 

Sources:

The FCTRE, 2019

HVS, 2019