Let us analyze the industry's landscape through the lens of the Porter's 5 Forces Framework, depicted on the left hand side.

Bargaining Power of Suppliers

The power level: LOW.

The brand reputation relies on suppliers and these have a lot of choice to register on various platforms in order to diversify their acquisition channels and to optimize their income streams. Suppliers do have though low switching cost from one platform to the other, unless some of the platforms provides them distinct earning advantages which make them stick longer there.

Bargaining Power of Buyers

The power level: MEDIUM.

The sheer number of travelers in the world, which are hundreds of millions, are many in comparison with the tens of companies that offer lodging services, acting as marketplaces aggregating the supply and balancing it with the demand. Also the number of vacation rental properties is limited, which means that the bargaining power of buyers is limited by these constraints.

The likelihood of buyers to go to alternative services such as hotels and hostels are also limited for the niches where the unique value proposition offered by peer-to-peer lodging services matters, which would make them to stick to the peer-to-peer lodging providers and pay the price demanded.

Industry Rivalry

The power level: HIGH.

The competition is fierce and this is caused of the rate of growth in the industry, averaged at 150% YoY in the USA in terms of growth of the sharing economy which gets more popular worldwide. This perspective for solving a problem of short term vacation rentals with pervasiveness in the market has the potential to attract more and more players into the game.

The diverse positioning in the market via focusing on an older audience (HomeAway) or on families with kids (VRBO) or on group bookings (FlipKey) or on total check-in/check-out freedom (TurnKey) makes the industry quite welcoming for creative ways to compete on various niches with tailored offerings.

The brand reputation and awareness is another factor which is a key influencer in the rivalry fight across brands and usually this is an equity each brand would get in time, after years of successful presence in the market.

The switching cost to another peer-to-peer lodging provider in a certain region, with a clear competitive advantage is low for the buyer.

Due to the aggressive competition, the overall landscape of the peer-to-peer industry looks like a red ocean, the differentiation being low if focus, divergence and a compelling tag line is not setup as a clear blue ocean strategy, meant to innovate and reset the market boundaries.

Threat of New Entrants

The power level: LOW.

Time of entry is very important and to have the first mover advantage in this industry is paramount. The funding, the word of mouth and the brand awareness are very important to gain market share, which happens usually during a few years and it involves significant capital and a clear strategy for international expansion. Once established, such incumbents would be hard, but not impossible to disrupt, especially in specific, targeted regions and possibly for certain niches.

The amount of investment needed for such a business, which can reach billions of dollars is something that signifies a very high entry barrier for any potential disruptor since once a player dominates the market, it will be very difficult to convince investors to give the requested amounts to any new player.

The legal and regulatory barriers for entering this space are also high since in some countries and cities property owners would need to perform a registration process or have some license or permit needed in order to be able to list their property for short term rental. Without a famous brand and influence, for a new entrant it will ne very difficult to have a word to say with regulatory authorities so that they overcome such hurdles.

However, due to the attractive sharing economy growth perspectives as such, indirect competition could be likely and quite dangerous, especially if their brand is established in some way. As an example here would be Uber which tapped into the sharing economy with Uber Eats.

Threat of Substitutes

The power level: MEDIUM.

There is no direct substitution for peer-to-peer lodging services due to the fact that hotels and hostels are not able to offer the location, amenities such as a kitchen or a garden where children can play. Therefore it is difficult for customers who appreciate such advantages to switch to some other provider of lodging services. Still hotels offer more security while hostels offer more in terms of socializing which means that if such aspects become important for the target market segment, then the threat of substitution could increase.

One of the industries which took off in full force since the pandemic is the food delivery industry, and delivery in general, such as groceries, flowers, etc., trend marked by super apps especially in Asia, such as Grab.

The space saw dynamics during the last years with Uber entering aggressively the space as an extension to its ground transportation / ride hailing offering and as a means for risk mitigation against the headwinds brought by the pandemic.

However, as usually this being the case with all sorts of crisis, there are also potential advantageous merger & acquisitions possible in such times, which brings a consolidation of the industry in the mid of a fragmented space that is overly competitive. 2021 brought such consolidation of big players, such as and JustEat Takeaway.com + Grubhub and Uber + Postmates.

M&As are for sure an accelerated path to profitability, worthwhile to consider for companies who have the necessary leeway to invest in such initiatives.

Let us analyze the industry's landscape through the lens of the Porter's 5 Forces Framework, depicted on the left hand side.

Bargaining Power of Suppliers

The power level: LOW.

Suppliers are two categories here:

• the tech platform, mostly developed in house, possibly with some outsourcing

• the riders themselves, which, depending on country specific regulations, are either employees or suppliers as such.

Their lack of specialization and overall availability makes their bargaining power low as their services are treated as a commodity.

Bargaining Power of Buyers

The power level for B2C: HIGH.

The power level for B2B: LOW.

Buyers are two categories here:

• B2C - the customers themselves who order food for delivery, who are demanding a great quality at a lower price and do not have to deal with any switching cost from one food delivery company to another. The reason for the low price is the overall lack of differentiation for the service in the industry.

• B2B - restaurants and bars, buying the food delivery service from food delivery companies so that there products are delivered to the final customers, using them as distribution channels. Their bargaining power is low due to the fact that in general they are not loyal to any of delivery companies, but would work with all of them so that they maximize their coverage and maintain a continuous customer acquisition stream. There is though a clear advantage here in terms of the quality of service to the end consumer in terms of their value perception in case the food delivery company, situated in the "new developers" category, takes the responsibility to pick up the food and deliver it faster and offering monitoring tech as where the rider is on the map towards the destination, at any given moment. The food delivery companies which choose not to provide this service are called "aggregators" and they would rely on a 3rd party to deliver it. The downside of the "new developer" category is the higher price for the delivery, which, in most cases, is not considered by the end customer. Here it pays off to segment the audience properly and in a detailed manner, choosing the right delivery service for the right niche, therefore some companies go rather for a hybrid delivery model.

A problem for food delivery companies is retention linked to loyalty and the profitability game in general, due to the lack of differentiation in the market which would push the gross profit margin lower since a mechanism for retention is to offer discounts continuously or very often.

Industry Rivalry

Major competitors in this space, with different regional strengths, are: DoorDash, Delivery Hero SE, Uber Eats, Deliveroo, GrubHub OLO, Inc, Snapfinger, Inc., Tillster, Inc, etc.

Merger & Acquisitions are certainly a quick way to expand and to accelerate the path towards profitability, if one has the necessary financial means to do it, other new entrants being either bought or forced to leave the market, unless they are capable to disrupt the market in a major way.

Threat of New Entrants

It is lower now, especially due to consolidation, but still dominated by big players due to the fact that profit margins are low and a new entrant, although with a relatively low barrier to entry in this market, would need to be able to wait until profits are registered. The fact that the initial capital required to start a new business in this industry is not high, it does not help either due to the low profit margin expected.

Threat of Substitutes

It is low in general since the alternative is for the restaurants to deliver the food by themselves. Some restaurants do it, but the trend is on the decline, as most of the time, restaurants lack expertise to organize the delivery service at a larger scale.