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ISSN: 2289-4519 Page 184
International Journal of Accounting & Business Management
www.ftms.edu.my/journals/index.php/journals/ijabm
Vol. 5 (No.2), November, 2017
ISSN: 2289-4519 DOI:24924/ijabm/2017.11/v5.iss2/184.196
This work is licensed under a
Creative Commons Attribution 4.0 International License.
Research Paper
THE INFLUENCE OF CUSTOMER SATISFACTION ON RIDE-SHARING
SERVICES IN MALAYSIA
Indra Balachandran Lecturer
School of Accounting & Business Management
FTMS College, Malaysia
Ibrahim Bin Hamzah MBA Graduate
Lord Ashcroft International Business School
Anglia Ruskin University, UK
ABSTRACT Mobility is an essential need for an individual therefore the demand for transport service especially
for private car increased in this modern society. In recent years, tremendous changes has undergone
in taxi industry especially in Malaysia. Emergence of mobile transportation app-based has increased
the demand on ride services such new entrants like Uber, and Grab services have revamped in the
taxi industry which increase competition among local taxi industry and public transportation. The
main purpose of this study is to identify the factors affecting service quality on customer satisfaction
of ride-sharing services in Malaysia. The independent variables of this research are tangible,
reliability, price, promotion and coupon redemption, and comfort; and dependent variable is
customer satisfaction. The methodology used by researcher are quantitative, questionnaire tool via
google form, 156 respondents were participated in this study, and using a convenience sampling
method. Researcher employed correlation analysis to identify the relationship between independent
variables and dependent variable. Whereas, linear regression used to identify which factor is the most
influence on customer satisfaction. Based on the analysis, the researcher found that tangible,
reliability, price, promotion and coupon redemption, and comfort, have positive significant
association with customer satisfaction. Among all the variables, comfort is the most influence factor
on customer satisfaction of ride-sharing services in Malaysia. This results will be benefits to ride-
sharing service providers as well they can improve in which factor has the least influence on
customer satisfaction. For future researcher, they can study different variables to study the customer
satisfaction of ride-sharing services in Malaysia.
Key Terms: Customer satisfaction, Tangible, Reliability, Price, Promotion and Coupon redemption,
and Comfort.
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1. INTRODUCTION Mobility is an essential need for an individual therefore the demand for transport
service especially for private car increased in this modern society. In recent years,
trendamous changes has undergone in taxi industry especially in Malaysia. Emergence of
mobile transportation app-based has increased the demand on ride services such new entrants
like Uber, and Grab services have revamped in the taxi industry which increase competition
among local taxi industry and public transportation. As a modern consumer, they become
wiser whereas not only emphasis on high quality but looking high professional in
transportation services. Due to Malaysia with high motorization rate, heavy traffic
congestions, parking problems, and inadequate public transport infrastructure led to increase
the demand for private cars. Land Public Transport Commission (SPAD) Malaysia conducted
an online survey, more than 28,000 respondents were took participate in General Perception
of Taxi service in Malaysia and the results show that taxi drivers overcharging and not using
meters, poor attitude of taxi drivers, dirty taxis and uncomfortable rides (Premananthini,
2016).
Some researcher research in public transportation in different country such Indonesia
(Sumaedi et. al., 2012); South Africa (Govender K., 2014); and Vietnam (Khuong and Dai,
2016). Additionally, few researcher have been done in Uber user perspective like Rayle L.,
(2014) research on app-based, on-demand ride services by comparing taxi and ride sourcing
trips. Whereas, an empirical study conducted by Ziru Li & Yili Hong Zhongju Zhang (2017)
examined the impact of Uber, between on-demand app based ride sharing service, and urban
traffic congestion. Again the limited literature done in the taxi industry in Malaysia especially
in Grab and Uber services and evidently there’s a gap in literature in service quality and
customer satisfaction in Malaysia taxi industry. Thus, the researcher concerned these grounds
in this research endeavours the factors affecting service quality on customer satisfaction of
Uber and Grab services in Malaysia. In light of the aforementioned, the purpose of this paper
is to identify the factors influence on satisfaction of ride-sharing users. We used two
dimensions namely reliability and tangible from SERQUAL (Parasuraman et al., 1985), and
comfort and price (affordability) from McKnight et al.’s (1986) to study ride-sharing
customer satisfaction.
Research objectives of this study as stated below:
To identify the relationship between tangible on customer satisfaction of ride-sharing
services.
To identify the relationship between reliability on customer satisfaction of ride-
sharing services.
To identify the relationship between price on customer satisfaction of ride-sharing
services.
To identify the relationship between promotion and coupon redemption on customer
satisfaction of ride-sharing services.
To identify the relationship between comfort on customer satisfaction of ride-sharing
services.
To identify which factor is the most influence on customer satisfaction of ride-sharing
services.
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2. LITERATURE REVIEW
Ridesharing services in Malaysia
Uber and Grab services based on ridesharing concept and has a major success in
“shared economy”. With technology development enables companies to find consumers,
whereas ‘sharing economy’ is based on the preferences for ‘experiences’ over ownership.
The catchphrase ‘shared economy’ emerged in the mid of 2002 and become popular between
2008 and 2010. Uber is a taxi E-hailing mobile application found by Travis Kalanick and
Garrett M. Camp in 2009 which located in San Francisco, California. According to Travis
(2015) Uber is serving in 311 cities and 58 countries around the world. The Uber service
delivery is the riders send a trip request to the nearest Uber driver and the application will
track the available Uber car to pick a rider than only the location will show to the driver.
Based on the General Packet Radio Service (GPRS) or google map used by the driver will
send the rider to their destination and they can rate scores for the driver. GrabTaxi was
pioneered which started in 2012 in Malaysia and it’s a smartphone-based taxi booking
application (app). GrabTaxi was extended its operations to 26 cities in Southeast Asia like
Singapore, Indonesia, the Philippines, Thailand and Vietnam. The idea of GrabTaxi was
created by Anthony in 2011 and he is the youngest grandson of Tan Sri Tan Yuet Foh, the
founder of Tan Chong Motor. This concept is similar like Uber, as a taxi booking platform to
assign available taxis on rider’s demand through mapping and location sharing technology.
Customer Satisfaction
According to Kotler and Keller (2006) satisfaction is an individual perception either
they are satisfy or dissatisfy based on their expectations towards product or service
performance. In line with the definition, customer satisfaction reflected from the
disconfirmation theory of customer expectation, while a positive disconfirmation leads to
satisfaction and negative satisfaction leads to dissatisfaction (Oliver, 1980). As Lai and Chen
(2010) and Wen et al. (2005) research on public transport services and identified passenger
will be satisfy when affective meets their expectation on the public transport services.
Service Quality
Parasuraman et al. (1985) defined service quality as “disconfirmation” paradigm
which derived from the customer satisfaction model whereby an outcome is from the
customer pre expectations from actual performance perceived from the products and services
(Parasuraman, Zeithaml and Berry, 1988). SERQUAL is one the most common measurement
scale for service quality developed by Parasuraman et al. (1985; 1988). Nevertheless, there is
less research study on service quality dimensions in ride-sharing services in Malaysia. In this
study, the researcher user service quality dimensions such as Tangible and Reliability to
examine affecting customer satisfaction of Ride-sharing users in Malaysia. Therefore, ride-
sharing services like Uber and Grab must leveraging service quality to achieve competitive
advantage as well they need to meets rider’s expectation which will created customer
satisfaction and help to build brand image in return it will increase the company’s
profitability.
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Conceptual Framework
Figure 1: Conceptual Framework
Conceptual variables
Tangible
According to Parasuraman et al., (1988) tangible refers to a person’s appearance,
physical facilities like settings, decorations, display, and equipment. Besides that, Bellini et
al., (2005) stated that tangibles like the safety and convenience for customers and it
representative as company’s image and quality (Zeithaml et al., 2006). As aforementioned
some empirical studies proved that tangible has influence on customer satisfaction in overall.
As Husseni A.A. (2016) studied on the relationship between service quality and customer
satisfaction in the taxi companies in Nairobi and they found that service quality influence on
customer satisfaction. Hence, based on the empirical studies discussed above, the researcher
came with the hypothesis that:
H1: Tangible has positive relationship with customer satisfaction.
Reliability
Reliability means the ability to execute the service with consistency, punctuality as
we can see in the transportation services reliability like arrival at destination; journey length;
communications; and scheduled routes are important to consider for the ride-sharing service
quality dimensions (McKnight et al. 1986). Following study by Horsu and Yeboah (2015)
research on customer satisfaction towards minicab taxi services in Ghana. They used six
variables namely reliability, continuous service, safety, comfort, affordability and drive
behaviour were tested to examine the relationship with customer satisfaction. Through
multiple regressions analysis they found that continuous service, comfort, affordability and
reliability have a significantly positive influence on customer satisfaction. While, safety has
positive and insignificant effect on satisfaction and identified driver behaviour have negative
impact on customer satisfaction in Ghana. Horsu and Thus, the study hypotheses that:
H2. Reliability has positive relationship with customer satisfaction.
Price
Price is an essential indicator for quality (Zeithaml, 1981) and led to customer value
(Zeithaml, 1988). According to Turel et al. (2006) stated that difference price of a product or
service can effect standard of the brand. As Button and Hensher (2001) stated that price is
important indicator in transportation industry which has affect the affordability between
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service and fares charged. Mburu (2013) found that price, relationship and value have
influence on customer satisfaction in the banking industry in Kenya. Khuong and Dai (2016)
found that reliability, responsiveness, price and satisfaction directly affected customer
loyalty. Ilma Khairani and Sri Rahayu Hijrah Hati (2017) found that perceived value for
money, service quality, and e-service quality have a positive and significant impact towards
customer satisfaction. Therefore, the hypothesis of this research is:
H3: Price has positive relationship with customer satisfaction.
Promotion & Coupon Redemption
As Lovelock and Wright (2002) stated that promotion is to persuade the target market
on how the consumer make decision to buy a product or service. Through, promotion
activities can influence customer’s thinking, emotions while purchasing the products or
services. In this study, we use coupon redemption as one of tool of sales promotion because
ride-sharing services are giving such promotion via mobile application. Promotion and price
are elements of marketing mix and some studies proved that there is a relationship between
marketing mix and customer satisfaction (Yelkur, 2000). Kumar and Kumar (2016) research
on the factors influencing the consumers selecting cab and he found that redeem coupons has
influence in selecting cab services.
H4: Promotion & Coupon Redemption have a positive relationship with customer
satisfaction.
Comfort
According to Litman (2008) service comfort means the availability of service such as
seats, space, journeys, and air conditioning. Some researcher in public transportation stated
that comfort is an important factor need to consider in this industry (Samson and Thompson,
2007). As Budiono (2009) found that comfort is the most influence factor on customer
satisfaction of public transport.
H5: Comfort has positive relationship with customer satisfaction.
3. RESEARCH DESIGN AND METHODOLOGY
The researcher use quantitative approach to gain a deeper and detail understanding of
the relationships between service quality factors on ride-sharing user satisfaction. By
examining the relationship between variables and this research is testing the existing theories
through using a numerical data which is one of the quantitative method characteristics
(Bryman & Bell, 2003). The researcher collect primary data as a first time getting
information to find solutions the research problem and this data were obtained from a
questionnaire survey. The population are the ride-sharing users of Uber and Grab in
Malaysia.
A survey was conducted to respondents who had experiences in the ride-sharing
service in Malaysia. A questionnaire was designed in a Google form and distributed to
respondents via posted the URL link in social media and phone applications like Whatsapp
and Viber. As Frankfort-Nachmias & Nachmias (2008) stated that one of the advantage by
conducting survey through email or internet is faster than telephone interview. A total of 156
questionnaires were obtained in the survey and applied a convenience sampling method so,
respondents will participate in this study when they are convenience to fill up the
questionnaire and the questionnaire was administered via online which is easier and faster to
complete the survey.
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In total 24 items were adapted and modified from the previous studies and this 24
items were represent for tangible, reliability, price, promotion and coupon redemption,
comfort, and customer satisfaction. The questionnaire was set based on five Likert scale
measurement like Strongly Agree – 5; Agree – 4; Neither Agree nor disagree – 3; Disagree –
2; Strongly Disagree – 1; and close ended questions, while it takes ten to fifteen minutes for
respondent to fill up the survey.
4. RESULT AND DISCUSSION
In this study, the SPSS statistical version 22.0 was used for the data analysis to
generate results. This study used descriptive analysis for respondent’s profile, and correlation
analysis to determine the significance level of relationship between independent and
dependent variables. As well a linear regression analysis to identify which factor the most
influence on customer satisfaction of ride-sharing services. As well conducting reliability and
validity test through Cronbach alpha value. In following section, we will discuss about those
data analysis aforementioned.
Respondents Demographic Profile
Table 1 Respondent Demographic Profile and Customer Perceptions Variable Category Frequency Percentage
Gender Male
Female
64
92
41.0
59.0
Age Below 20 years old
21-30 years old
31-40 years old
41-50 years old
Above 50 years
32
68
19
31
6
20.5
43.6
12.2
19.9
3.8
Education Secondary School
High School
Technical College
Bachelor Degree
11
29
25
82
7.1
18.6
16.0
52.6
Master degree and
higher
9 5.8
Occupation Student
Self-employment
Private employee
Public employee
Other professions
56
14
50
22
14
35.9
9.0
32.1
14.1
9.0
Income Less than RM1500
RM1501-RM3000
RM3001-RM5000
69
32
23
44.2
20.5
14.7
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More than RM5000 32 20.5
The most used of ride-
sharing booking mobile
app?
Uber
Grab
Both
68
36
52
43.6
23.1
33.3
How often are you
using the ride-sharing
booking mobile
application?
3 times or less per
week
5 times or less per week
Everyday
126
21
9
80.8
13.5
5.8
Will you use ride-
sharing services
booking again and
happily recommended
to others?
Yes
No
Maybe
120
6
30
76.9
3.8
19.2
Total 100 100%
From the table above, total respondents are 156 and both gender were participated in
the study, 64 male respondents which means 41% male users of ride-sharing. Meanwhile, 92
female respondents are higher than male with 64 which means 59% of female users of ride-
sharing were participated in this research. This indicates that the female are high using of
ride-sharing services than male.
Respondents were asked to tick the age category and it has 5 age groups, the majority
of age respondents are between 2130 years old which is 43.6%, the second age group of
respondents are below 20 years that old is 20.5%, the third age group of respondents are 41-
50 years old which is 19.9%, the fourth age group of respondents are 31-40 years old which
is 12.2%, and the smallest group age are above 50 years old and there are 6 respondents
which is only 3.8%. This indicates that the high respondents used ride-sharing services are
from 21-30 years old than other ages.
For the education component, the majority of the education level of respondents are
bachelor degree which has 82 respondents (52.6%); the second group is the high school, has
29 respondents (18.6%), the third group is the technical college has 25 respondents (16.0%),
the fourth group is secondary school, has 11 respondents (7.1%), and the fifth group is the
master degree and higher which has 9 respondents (5.8%). This indicates that most of the
respondents of ride-sharing services with bachelor degree qualification.
From the above table shows the results of occupation descriptive analysis, there are 5
kinds of different occupations, such as student, self-employment, private employee, public
employee, and other professions. Most occupation of respondents are students with 35.9%;
32.1% is from the private employee and the public employee group which has 22 respondents
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is equal to14.1%; the self-employment and other professions have an equal respondents of 19
respondents which is equal to 9.0%. This indicates that the most ride-sharing users were
students than other occupations.
Income analysis shows the majority of respondents is between less than RM 1500
with 44.2%, the second are RM1501-RM3000 and more than RM5000 have same am equal
respondents which are 32, the third rank is RM3001-RM5000 with 14.7%. This shows that
the high ride-sharing users’ income is less than RM1500.
From the table above, it shows that ride-sharing user using Uber (43.6%) service more than
Grab (23.1%). It means most of the ride-sharing prefers to use Uber than Grab it is because
the price and the convenient they deliver to the customers.
Frequency of using ride-sharing mobile application service 126 (80.8%) use the
service for 3 times or less in a week. Meanwhile, 21 respondents (13.5) were using ride-
sharing services in 5 times or less in a week and 9 respondents (5.8%) are using services for
every day.
Based on the results above, it shows that most of the 120 respondents (76.9%) will
recommend this ride-sharing services to other. Whereby, 30 respondents (19.2%) were says
maybe to recommend this services and 6 respondents (3.8%) tick no it means they dislike the
service and won’t recommended to others.
Reliability Test
Table 2: Reliability Statistics
Cronbach’s Alpha
Cronbach’s Alpha
Based on
Standardized
Items N of Items
.895 .898 6
The table 2 below, shows the reliability test for the actual study for total 156
respondents, the Cronbach’s alpha coefficient for 6 variables with 0.895, which means has an
excellent internal consistency and it’s reliable of overall items in the questionnaire. As
Olorunniwo et al. (2006) stated that if Cronbach‟s alpha coefficient is more than 0.70, the
questionnaire reliability is acceptable.
Table 3: The level of agreement of independent variable and dependent variables
Mean Std. Deviation N
Level of
Agreement
AVERAGE_TANGIBLE 3.8670 .63336 156 Agree
AVERAGE_RELIABILITY 3.6923 .80665 156 Agree
AVERAGE_PRICE 3.9333 .66443 156 Agree
AVERAGE_PROMOTION 3.8702 .71925 156 Agree
AVERAGE_COMFORT 4.0256 .67472 156 Agree
AVERAGE_CUSTSATISFACTION 3.8932 .73028 156 Agree
The table 3 shows the level of agreement of independent variable and dependent
variables in the table below, the mean for tangible is 3.8670 and standard deviation is .63336,
which is considered as agree level. Meanwhile, the mean for reliability is 3.6923 and standard
deviation is .80665, which is considered as agree level. The mean for price is 3.9333 and
standard deviation is .66443, which is considered as agree level. Further, the mean for
promotion is 3.8702 and standard deviation is .71925, which is considered as agree level. The
mean for comfort is 4.0256 and standard deviation is .67472, which is considered as agree
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level. Lastly, for customer satisfaction the mean is 3.8932 and standard deviation is .73028,
which is considered as agree level.
Correlation Analysis
The strength of the relationship can be determined via the Pearson correlation. If the r
value is 0, then it indicates no relationship between two variables and if the r value is 1, then
it can be interpreted as perfect positive correlation, while if the r value is -1, it can be
interpreted as negative correlation. According to the study of Cohen (1988), the r value can
interpret the strength of the relationship. The sign of + or – indicates a positive or negative
relationship. The summary for the matrix for correlation of these seven variables is presented
in table
Table 4: Correlations
TANGIBLE RELIABILI
TY
PRICE PROMOTIO
N
COMFORT CUSTSA
TISFACT
ION
TANGIBLE Pearson
Correlation 1 .517** .587** .532** .637** .662**
Sig. (2-
tailed) .000 .000 .000 .000 .000
N 156 156 156 156 156 156
RELIABILITY Pearson
Correlation .517** 1 .496** .481** .590** .587**
Sig. (2-
tailed) .000 .000 .000 .000 .000
N 156 156 156 156 156 156
PRICE Pearson
Correlation .587** .496** 1 .603** .682** .654**
Sig. (2-
tailed) .000 .000 .000 .000 .000
N 156 156 156 156 156 156
PROMOTION Pearson
Correlation .532** .481** .603** 1 .600** .540**
Sig. (2-
tailed) .000 .000 .000 .000 .000
N 156 156 156 156 156 156
COMFORT Pearson
Correlation .637** .590** .682** .600** 1 .745**
Sig. (2-
tailed) .000 .000 .000 .000 .000
N 156 156 156 156 156 156
CUSTSATISFACT
ION
Pearson
Correlation .587** .654** .540** .745** 1
Sig. (2-
tailed) .000 .000 .000 .000 .000
N 156 156 156 156 156 156
**. Correlation is significant at the 0.01 level (2-tailed).
Based on the correlation output, the researcher found a positive relationship between
the tangible and customer satisfaction (r=.662**
, p<0.01). Therefore, H1 is supported and this
result is same as Hussein (2016). Meanwhile, the relationship between reliability and
customer satisfaction shows a positive correlation (r= .587**
, p<0.01). Thus, H2 is supported.
This result was same as Horsu and Yeboah (2015) and Khuong and Dai (2016). There is a
large strength relationship between the price and customer satisfaction with a positive
correlation (r= .654**
, p<0.01). H3 is supported. This result was same as founded by Khuong
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and Dai (2016). The correlation analysis results shows that price and promotion and coupon
redemption, and comfort have a significant positive relationship with customer satisfaction.
Linear Regression
Linear regression is a technique to discover the complex relationship between one
dependent variable and several independent variables. This research intends to examine the
factors that most influence on customer satisfaction of ride-sharing services in Malaysia.
Table 5: Model Summary
b
a. Predictors: (Constant), COMFORT, RELIABILITY, PROMOTION, TANGIBLE, PRICE
b. Dependent Variable: CUSTSATISFACTION
The R Square of this model is 0.647, as shown in Table 5, which means that this model
explains 64.7% of the variance in customer satisfaction explain by the independent variables
(COMFORT, RELIABILITY, PROMOTION, TANGIBLE, PRICE). The regression test
results that shown in Table 14 shows a significant regression equation was found R= 0.000,
P≤.000), with R2 of 0.647 and adjusted R
2 of .635.
Table 6: Coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
(Constant) -.109 .251 -.433 .666
TANGIBLE .268 .078 .233 3.455 .001
RELIABILITY .135 .057 .149 2.386 .018
PRICE .194 .079 .177 2.455 .015
PROMOTION .009 .067 .009 .136 .892
COMFORT .414 .084 .382 4.923 .000
a. Dependent Variable: CUSTSATISFACTION
Above Table 6, the largest standardized coefficient beta is 0.382 with sig .000, which
is contributed by comfort, followed by tangible, which has a beta coefficient of 0.233 with sig
.001. This indicates that comfort is the most influence factor in explaining the dependent
variables of customer satisfaction. Whereas, reliability has beta value of .149 with sig .018
and price beta value is .177 with sig .015. Whereby, promotion has the less influence on
customer satisfaction with beta value of .009 with sig .892. The unstandardized Coefficient B
is the beta that will be used in the equation for the model.
5. CONCLUSION
From the correlation analysis, we found that all the variables have a positive and
significant relationship with customer satisfaction. Through linear regression output for
customer satisfaction, we found that the most influential factor is the comfort on customer
satisfaction following by tangible, reliability, price, and promotion and coupon redemption.
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .804a .647 .635 .44123
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This study will benefit to the ride-sharing services and throught this research results, the ride-
sharing can improve in the marketing factors, brands and customer satisfaction to create and
raise competitive advantage over competitors. The researcher recommends the ride-sharing
service providers should focusing on promotion and coupon redemption and price because
both factors have less influence on the customer satisfaction. Hence, they must active in
implementing their marketing strategies especially in price and promotion factors in order to
sustain their business performance in the transportation industry. On the other hand, the most
influence factor on customer satisfaction is the comfort following by tangible and reliability.
Thus, service providers can improve or maintain in these three factors in order to achieve
customer satisfaction.
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