To Juice Margins, WeWork Puts Squeeze On Fruit Water At Several Locations

Updated: Following publication, WeWork informed Crunchbase News that fruit water is not going away. The company says that a few of its locations have independently chosen to end fruit water or reduce its presence, but it is not reflective of a corporate policy change. WeWork says it will be looking into this and will likely reinstate any fruit water service which may have ended. The spokesperson said that fruit water is also not going away from the Stockholm location, just restricted to floors with hot desks.

It is, by this point, common knowledge that The We Company (better known as WeWork) loses money like it’s going out of style. To avoid going out of business, though, the beleaguered office rental company is finding ways to cut costs. Even if it comes at the expense of the consciousness-raising amenities at its spaces.

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Crunchbase News has learned that WeWork will be ending its fruit water service at the company’s location in Stockholm, Sweden as of October 1. According to an emailed message to its tenants, the move was motivated by an effort to “save the environment.”

Like the climate crisis itself, WeWork’s decision to reduce fruit water service is global in scope. A person working out of a WeWork location in San Francisco told Crunchbase News that fruit water service at that location ended weeks ago. A New York-based journalist unaffiliated with Crunchbase News remarked that, seemingly coincident with WeWork’s decision to pull its S-1 filing to go public today, fruit water had suddenly disappeared from the WeWork location they work out of.

Questions presented to WeWork about the environmental impact of its fruit water program went unanswered prior to publication. Our inquiry into whether there was a financial or operational motive to the decision was similarly unanswered.

Removing a trivial office perk wouldn’t be such a big deal if it didn’t risk watering down the brand WeWork has built for itself.

In February, WeWork’s New York community manager Allie Goldberg spoke about the importance of WeWork’s fruit water with lifestyle site PureWow. PureWow’s Los Angeles editor Dana Dickey reports that “for the past three-and-a-half years a team meets every morning at its scores of locations in the U.S. to create super-fancy assemblages of fresh fruit, crushed ice and fresh water.” Dickey explains, “Staffers use cookie cutters to layer artfully shaped fruit around the outside of the glass dispenser, fill the center with crushed ice that melts during the day and then add water.”

Goldberg told PureWow that WeWork has an internal company slack channel devoted to fruit water requests, and that one enthusiastic WeWork employee dressed as fruit water for Halloween.

Writing in newsletter The Margins in August, Ranjan Roy reflects on his time incubating a startup out of a New York WeWork. “The fruit water thing evidently became a core part of the entire WeWork culture,” he wrote.

Supporting that argument, Roy linked to a then-recent tweet from Rebekah Rombom, the general manager of “online” at Flatiron School, the software engineering bootcamp program WeWork acquired in October 2017. Rombom tweeted “We have a Slack channel @WeWork called #fruit-water-showcase, where our awesome [community service associates] – the WW’ers responsible for the fruit water, among many other things – share photos of their creations.”

Will WeWork’s Charitable Obligations Also Dry Up?

In 2016, WeWork launched its first “charitable partnership” with Charity:Water, a non-profit organization which funds local clean water projects in developing countries.

In a blog post announcing the partnership, published in late October 2016, WeWork said that “[the company] has agreed to donate $30—the average amount it takes to bring clean water to one person in a developing country—each month for every fruit water dispenser in our 28 locations throughout New York. The partnership will kick off Oct. 26 in 10 marquee NYC WeWork locations and will roll out across the rest of the city’s locations in the following weeks (164 coolers in total).”

Charity:Water put up a landing page, featuring the co-working company’s fruit water dispensers, specifically for WeWork members to join the charity’s monthly giving program, The Spring. The page now says that “WeWork is donating $30 every month for every WeWork location in New York City, Washington, D.C., London, and Manchester.” Note that Charity:Water says WeWork is making donations on a per-location, rather than a per-dispenser basis. Most WeWork locations contain more than one fruit water dispenser.

According to WeWork’s website at the time of writing, the company has 64 locations in New York City, 20 locations in Washington, 51 locations in London, and 5 locations in Manchester that are either currently open or opening soon. Combined, the 140 locations would account for roughly $50,000 in total annual donations (140 locations * $30 per month * 12 months per year) from WeWork to Charity:Water through this program, if it remains in place.

According to WeWork’s S-1 filing, WeWork co-founder Miguel McKelvey has agreed to donate half the value of his equity to charitable causes. Reporting by New York Business Journal and the New York Times indicates that at least one percent of his equity will be contributed to Charity:Water’s program called The Pool.

Lauren Letta, COO of Charity:Water, told New York Business Journal that “members [of The Pool] pledge or transfer a portion of their equity, which stays in The Pool until an IPO or other liquidity event, at which point the shares are sold. Then, 80% of the cash proceeds go to our operating fund — which pays for things like salaries and office rent, and the remaining 20% is reserved to provide cash bonuses for eligible staff [of Charity:Water].”

With WeWork’s IPO on ice indefinitely, McKelvey’s donation to The Pool—which, given his equity stake, could represent tens of millions of dollars—remains frozen in illiquid private company assets.

WeWork was not mentioned in Charity:Water’s annual reports or Form 990s from 2016, 2017, or 2018. Crunchbase News left a voicemail with Charity:Water inquiring about the relationship between it and WeWork, but our call was not returned prior to publication.

For WeWork, Water Matters

It wouldn’t be the first time a lavishly overdrawn unicorn reigns in spending on trivial perks in the face of public-market pressure. Recall that Uber brought down the hammer on its employee anniversary balloon initiative, which by its own CFO’s message to employees cost the ride-hailing giant a mere $200,000 per year in its San Francisco headquarters.

Maintaining company culture in times of transition, like the one WeWork is experiencing now, is important to maintaining employee and tenant morale morale.

With hopes of a near-term IPO (and the liquidity it would bring to early employees) dashed, it’s odd that WeWork could be pulling back on what’s likely a trivial expense for the venture. Compared to, say, its debt servicing costs and long-term leaseholds, the fruit budget is probably a rounding error. (It was not mentioned in the company’s regulatory filings.)

If WeWork is indeed restricting its fruit water service, as reports from around the world may suggest, its premium spaces might lose some of their appeal. And without that, what makes WeWork special?

Photo credit: Toa Heftiba, via Unsplash.