diff --git a/registry/coder/modules/vscode-web/main.tf b/registry/coder/modules/vscode-web/main.tf
index 3912fa9f..eafbc597 100644
--- a/registry/coder/modules/vscode-web/main.tf
+++ b/registry/coder/modules/vscode-web/main.tf
@@ -185,6 +185,7 @@ resource "coder_script" "vscode-web" {
     EXTENSIONS_DIR : var.extensions_dir,
     FOLDER : var.folder,
     WORKSPACE : var.workspace,
+    WORKSPACE_ARG : coalesce(var.workspace, var.folder),
     AUTO_INSTALL_EXTENSIONS : var.auto_install_extensions,
     SERVER_BASE_PATH : local.server_base_path,
     COMMIT_ID : var.commit_id,
diff --git a/registry/coder/modules/vscode-web/run.sh b/registry/coder/modules/vscode-web/run.sh
index 6c24e844..ddfcfe2a 100644
--- a/registry/coder/modules/vscode-web/run.sh
+++ b/registry/coder/modules/vscode-web/run.sh
@@ -23,17 +23,9 @@ if [ "${DISABLE_TRUST}" = true ]; then
 fi
 
 run_vscode_web() {
-  # Determine what to pass as the workspace argument
-  WORKSPACE_ARG=""
-  if [ -n "$${WORKSPACE}" ]; then
-    WORKSPACE_ARG="$${WORKSPACE}"
-  elif [ -n "$${FOLDER}" ]; then
-    WORKSPACE_ARG="$${FOLDER}"
-  fi
-  
-  echo "👷 Running $VSCODE_WEB serve-local with workspace: $${WORKSPACE_ARG}"
-  echo "Check logs at $${LOG_PATH}!"
-  "$VSCODE_WEB" serve-local "$EXTENSION_ARG" "$SERVER_BASE_PATH_ARG" "$DISABLE_TRUST_ARG" --port "$${PORT}" --host 127.0.0.1 --accept-server-license-terms --without-connection-token --telemetry-level "$${TELEMETRY_LEVEL}" "$${WORKSPACE_ARG}" > "$${LOG_PATH}" 2>&1 &
+  echo "👷 Running $VSCODE_WEB serve-local with workspace: ${WORKSPACE_ARG}"
+  echo "Check logs at ${LOG_PATH}!"
+  "$VSCODE_WEB" serve-local "$EXTENSION_ARG" "$SERVER_BASE_PATH_ARG" "$DISABLE_TRUST_ARG" --port "${PORT}" --host 127.0.0.1 --accept-server-license-terms --without-connection-token --telemetry-level "${TELEMETRY_LEVEL}" "${WORKSPACE_ARG}" > "${LOG_PATH}" 2>&1 &
 }
 
 # Check if the settings file exists...