Ride-Hailing Applications in Bangkok: Determining Service Quality, Passenger Satisfaction, and Loyalty

The objective of this study is to investigate the main factors influencing the loyalty and satisfaction of ride-hailing application (RHA) users using the service quality model and structural equation model (SEM). The loyalty and satisfaction of experienced RHA users were examined with a set of explanatory variables, such as platform responsiveness and attitudes toward an RHA. Online survey data were collected from 310 respondents in Bangkok and analyzed. The findings showed that user perceptions of an RHA’s high competence and empathy and users’ positive attitudes toward an RHA significantly influenced their satisfaction. The results also indicated that only structural assurance and empathy affected customer loyalty. Our findings suggest that training RHA riders for competence and empathy to improve customers’ offline service can also improve customer satisfaction. In addition to offline service, RHA providers should focus on the structural assurance of the platform.

Customer satisfaction; Loyalty; Ride-hailing services; SERVQUAL; Structural equation model

The advancement of information technology, especially the mobile internet, has recently become a main driver in changing the way people live. Ride-hailing applications (RHAs) have burgeoned in many regions around the world, including Southeast Asia (Brail, 2020), disrupting urban transportation systems. Similar to taxi services, travelers can hail vehicles from anywhere at any time via applications on their mobile phones. Since the first introduction of an RHA by UberCab in the United States in 2009, the market value of RHAs has risen exponentially to over 113 billion US dollars in 2020 (Mordor Intelligence, 2021). RHAs tend to not only improve the mobility of passengers in terms of convenience, accessibility, and reliability but also offer cheaper costs of transportation (Clewlow and Mishra, 2017). As a result, RHAs have become one of the main transportation modes of travel, especially in urban areas (Tirachini, 2019).

Bangkok is the sprawling capital city of Thailand, located in the middle region of the country. Typically, the main public transportation modes in the city are fixed bus routes and and mass rapid transit (the sky train and subway). However, present service routes do not cover the entire area of Bangkok (Amrapala and Choocharukul, 2019). Therefore, RHAs in Bangkok have the capacity to offer residents greater mobility for commuting and non-commuting trips (e.g., shopping, leisure, business trips, etc.) (Laosinwattana et al., 2021). The number of RHA users has continuously increased as new major RHA companies, such as Grab and Line Taxi, have been introduced (Conc, 2019). Prior to the COVID-19 pandemic, conventional taxi drivers in Bangkok were notorious for frequently rejecting passengers on the street (Peungnumsai et al., 2017). For this reason, RHAs offer a useful alternative for many customers to secure rides. The reliability of RHAs is one of its key advantages in gaining a large market share of Bangkok transit modes and steadily gaining customer loyalty and satisfaction.

The aim of this research is to investigate the main factors that influence customer loyalty and satisfaction by applying the service quality model (SERVQUAL) framework (Parasuraman et al., 1988; Cheng et al., 2018). The loyalty and satisfaction of experienced RHA users were examined with a set of explanatory variables, such as platform responsiveness and attitudes toward RHAs. Ultimately, these factors are of interest to both policy makers and service providers who aim to improve RHAs’ service quality and maintain customers’ loyalty.

    This research is a collaboration between Thailand’s National Science and Technology Development Agency (NSTDA) and Chulalongkorn University. The authors are grateful for financial support from the NSTDA. We thank Perawit Charoenwut, Saharath Nimmansophon, Nattakarn Surangsrirout, Weerachai Sotananan, and Sarin Pirabul for their research assistance. We also thank Jamison Liang for help with editing the manuscript.

Amrapala, C., Choocharukul, K., 2019. Perceived Service Quality and Commuter Segmentation of Informal Public Transport Service in Bangkok, Thailand. Engineering Journal, Volume 23(6), pp. 1–18

Ardi, R., Iqbal, B.M., Sesarea, S., Komarudin, 2020. What Drives Individuals to Dispose of Waste Mobile Phones? A Case Study in Indonesia. International Journal of Technology, Volume 11(3), pp. 631–641

Barrutia, J.M., Gilsanz, A., 2009. E-Service Quality: Overview and Research Agenda. International Journal of Quality and Service Sciences, Volume 1(1), pp. 29–50

Baumgartner, H., Homburg, C., 1996. Applications of Structural Equation Modeling in Marketing and Consumer Research: A Review. International Journal of Research in Marketing, Volume 13(2), pp. 139–161

Bentler, P.M., Bonett, D.G., 1980. Significance Tests and Goodness of Fit in the Analysis of Covariance Structures. Psychological Bulletin, Volume 88(3), pp. 588–606

Brail, S., 2020. World Cities of Ride-Hailing. Urban Geography, pp. 1–22

Buttle, F., 1996. SERVQUAL: Review, Critique, Research Agenda. European Journal of Marketing, Volume 30(1), pp. 8–32

Cheng, X., Fu, S., de Vreede, G.J., 2018. A Mixed Method Investigation of Sharing Economy Driven Car-Hailing Services: Online and Offline Perspectives. International Journal of Information Management, Volume 41, pp. 57–64

Clewlow, R., Mishra, G., 2017. Disruptive Transportation: The Adoption, Utilization, and Impacts of Ride-Hailing in the United States. Institute of Transportation Studies, University of California, Davis, Volume 44(3), pp. 401–412

Collier, J.E., Bienstock, C.C., 2006. Measuring Service Quality in E-Retailing. Journal of Service Research, Volume 8(3), pp. 260–275

Conc., 2019. Ride-Hailing Services. Report, Thammasat Business School

DeLone, W., McLean, E., 2003. The DeLone and McLean Model of Information Systems Success: A Ten-Year Update. Journal of Management Information Systems, Volume 19(4), pp. 9–30

Doll, W.J., Xia, W., Torkzadeh, G., 1994. A Confirmatory Factor Analysis of the End-User Computing Satisfaction Instrument. MIS Quarterly, Volume 18(4), pp. 453–461

Fornell, C., Larcker, D.F., 1981. Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, Volume 18(1), pp. 39–50

Hu, L.T., Bentler, P.M., 1999. Cutoff Criteria for Fit Indexes in Covariance Structure Analysis: Conventional Criteria Versus New Alternatives. Structural Equation Modeling, Volume 6(1), pp. 1–55

Jackson, D.L., 2001. Sample Size and Number of Parameter Estimates in Maximum Likelihood Confirmatory Factor Analysis: A Monte Carlo Investigation. Structural Equation Modeling: A Multidisciplinary Journal, Volume 8(2), pp. 205–223

Kline, R.B., 2005. Principles and Practice of Structural Equation Modeling (2^nd ed.). Guilford Press, New York, USA

Kuswanto, A., Sundari, S., Harmadi, A., Hariyanti, D.A., 2019. The Determinants of Customer Loyalty in the Indonesian Ride-Sharing Services: Offline vs Online. Innovation & Management Review, Volume 17(1), pp. 75–85

Laosinwattana, W., Thaithatkul, P., Chalermpong, S., 2021. Determinants of Ride Hailing Applications Adoption: How Travelers’ Characteristics and Attitudes Affect the Adoption of New Online Mobility Platforms in Bangkok? In: The 8^th Online International Conference on Transportation Systems Engineering and Management (CTSEM 2021)

Mohamad, W., Bin, A., Afthanorhan, W., 2014. Pooled Confirmatory Factor using Structural Equation Modeling on Volunteerism Program: A Step by Step Approach. International Journal of Asian Social Science, Volume 4(5), pp. 642–653

Mordor Intelligence, 2021. Ride-Hailing Market—Growth, Trends, COVID-19 Impact, and Forecasts (2021–2026). Available Online at https://www.mordorintelligence.com/industry-reports/ride-hailing-market

Muthén, L.K., Muthén, B.O., 2017. Mplus User’s Guide (8^th ed.). Muthén & Muthén, Los Angeles

Nguyen-Phuoc, D.Q., Su, D.N., Tran, P.T.K., Le, D.T.T., Johnson, L.W., 2020. Factors Influencing Customer’s Loyalty Towards Ride-Hailing Taxi Services—A Case Study of Vietnam. Transportation Research Part A: Policy and Practice, Volume 134, pp. 96–112

Nistal, P., Regidor, J., 2016. Comparative Study of Uber and Regular Taxi Service Characteristics. In: Proceedings of the 23^rd Annual Conference of the Transportation Science Society of the Philippines

Parasuraman, A., Zeithaml, V.A., Berry, L.L., 1985. A Conceptual Model of Service Quality and Its Implications for Future Research. Journal of Marketing, Volume 49(4), pp. 41–50

Parasuraman, A., Zeithaml, V., Berry, L.L., 1988. SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality. Journal of Retailing, Volume 64, pp. 12–40

Parasuraman, A., Zeithaml, V.A., Malhotra, A., 2005. E-S-QUAL A Multiple-Item Scale for Assessing Electronic Service Quality. Journal of Service Research, Volume 7(3), pp. 213–233

Peungnumsai, A., Witayangkrun, A., Nagai, M., Arai, A., Ranjit, S., Ghimire, B.R., 2017. Bangkok Taxi Service Behavior Analysis using Taxi Probe Data and Questionnaire Survey. In: ACM International Conference Proceeding Series, pp. 1–8

Rafique, H., Almagrabi, A.O., Shamim, A., Anwar, F., Bashir, A.K., 2020. Investigating the Acceptance of Mobile Library Applications with an Extended Technology Acceptance Model (TAM). Computers & Education Journal, Volume 145, pp. 96–112

Salkind, N.J., 2010. Encyclopedia of Research Design (Vols. 1-0). SAGE Publications, California

Silalahi, S.L.B., Handayani, P.W., Munajat, Q., 2017. Service Quality Analysis for Online Transportation Services: Case Study of GO-JEK. Procedia Computer Science, Volume 124, pp. 487–495

Surjandari, I., Wayasti, R.A., Zulkarnain, Laoh, E., Rus, A.M.M., Prawiradinata, I., 2019. Mining Public Opinion on Ride-hailing Service Providers using Aspect-based Sentiment Analysis. International Journal of Technology, Volume 10(4), pp. 818–828

Tabachnick, B.G., Fidell, L.S., 2007. Using Multivariate Statistics (5^th ed.). Allyn & Bacon/Pearson Education Boston, Massachusetts, USA

Tansitpong, P., 2019. Impact of Service Quality and Trust on Satisfaction of Uber and Regular Taxis in Thailand. In: The Proceedings of the 8^th ICADA 2019, pp. 189–208

Tirachini, A., 2019. Ride-hailing, Travel Behaviour and Sustainable Mobility: An International Review. Transportation, Volume 47(4), pp. 2011–2047

Weng, G., Zailani, S., Iranmanesh, M., Hyun, S.S., 2017. Mobile Taxi Booking Application Service's Continuance Usage Intention by Users. Transportation Research Part D: Transport and Environment, Volume 57, pp. 207–216

Yin, H., Huang, S., 2021. Applying Structural Equation Modelling to Research on Teaching and Teacher Education: Looking Back and Forward. Teaching and Teacher Education, Volume 107, https://doi.org/10.1016/j.tate.2021.103438