Extended Reality (XR) offers the potential to transform the passenger experience by allowing users to inhabit varied virtual spaces for entertainment, work or social interaction, whilst escaping the constrained transit environment. XR allows remote collaborators to feel like they are together and enables them to perform complex 3D tasks. However, the social and physical constraints of the passenger space pose unique challenges to productive and socially acceptable collaboration. Using a collaborative VR puzzle task, we examined the effects of five different f-formations of collaborator placement and orientation in an interactive workspace on social presence, task workload, and implications for social acceptability. Our quantitative and qualitative results showed that face-to-face formations were preferred for tasks with a high need for verbal communication but may lead to social collisions, such as inadvertently staring at a neighbouring passenger, or physical intrusions, such as gesturing in another passenger’s personal space. More restrictive f-formations, however, were preferred for passenger use as they caused fewer intrusions on other passengers’ visual and physical space.