AN ASSESSMENT OF CONSUMER BEHAVIOR TOWARDS E-HAILING: A CRITICAL REVIEW OF UBER

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Globally, in recent years, there has been a significant growth in the e-hailing industry. This growth has led to a shift in customer preferences, resulting in the emergence of a new customer segment with distinct needs. Meeting these needs through the development of innovative products and services has the potential to enhance customer satisfaction. According to the study conducted by Okechukwu, Ekwochi, and Eze in 2018 urban public transport systems in Nigerian cities have seen significant transformation in recent times due to technological innovation such as the invent e-hailing services. According to Dickenson (2018), the advent of e-hailing services has begun to assume a significant role in facilitating the transportation of products and individuals throughout various Nigerian urban areas.  By definition, E-hailing pertains to the act of requesting a vehicle, such as a car, taxi, or any other means of transportation, through the use of a computer or mobile device. The term 'E' in this context denotes 'electronic', while 'hail' signifies the conventional practise of notifying a taxi cab to halt. In order to reserve an electronic ride, it is necessary for the client to specify their pick-up location. This information may be supplied by either inputting their address manually or by utilising GPS connection to determine their present position. These applications are jointly developed by automobile service providers and application start-up companies.

In Nigerian cities, the prevalent modes of public transportation have historically included commercial buses, commonly referred to as "danfo," and automobiles known as "taxis," both of which are characterized by their distinctive yellow colour. Additionally, the ramshackle "molue" has also been a prominent fixture in the urban transportation landscape. Prior to the emergence of ride-hailing applications, accessing transportation was often a challenging task. In order to get transportation, passengers were required to either signal for taxis on the roadside or proceed to the nearest designated taxi station (Omilana, 2020a). According to Statisca (2029), it is projected that the digital ridehailing or e-hailing industry in the nation would create around USD 292 million in revenue by the conclusion of 2020. Furthermore, this market is anticipated to include 15% of the African continent's e-hailing user base, which amounts to 48.6 million individuals. Since its inception in 2014, ride-sharing platforms have significantly enhanced the comfort and convenience of urban transportation for Nigerian citizens.

However the the emergence of e-hailing services has started to play an important role in the mobility of goods and people in most Nigerian cities. The e-hailing platform connects individual drivers to potential users. Taking advantage of the country’s underdeveloped urban public transport system, high population, and rapid urbanization, the e-hailing mobility services have now grown exponentially from two (2) operators in 2014 to twenty-six (26) operators by 2022 across Nigeria’s major cities. Currently, Nigeria possesses a demographic dividend characterized by individuals who possess a high capacity for adapting to modern technologies. In order to fully exploit this market, it is imperative that more participants enter with a mindset focused on fostering healthy competition while also review the problems that hinder the successful implementation of the e-hailing business model.

1.2 Statement of the problem

 Contemporary organizations are currently facing several environmental consequences, including rapid technology disruptions, heightened demands for privatization, and increasing hazards associated with globalization. According to Joan & Ramon (2019), the emergence of globalization and unvarying technological changes have brought about a lot of transformations in the world, which propel business organizations to come up with constant strategies and competitive ideas that will not only give them an edge over competitors but also enable them to meet up with international best practices to stand the test of time. Hosseini; Mehdizadeh & Soltani, (2018) assert that business organizations are beginning to evaluate their competitive business environment, analyze their strengths and weaknesses while taking cognizance of opportunities and threats in the external environment of operation, and develop competitive and corporate strategies that will sustain the firm in the face of challenging competitive threats of which the transportation cooperation arenot left out (Papulova & Papulova, 2016).

Conversely, in Nigeria has been accused of poor customer services which led  to government regulations that pose a substantial risk to the survival and even elimination of market participants.  Omilana (2020b) has observed that when Uber launched in Nigeria in August  2014, and Taxify followed 2 years later in November 2016, both promised efficient, comfortable and more refined modes of transportation powered by technology. With time, they both expanded to other Nigerian cities. However, with these expansions and growth, driver misconduct and bad behaviour exploded. There is no official list or statistics showing these numbers, but a quick search across social media will dredge up cases that range from near mundane to outright life threatening; fare manipulation, rudeness, assault, theft, abuse, the list is seemingly endless. Oseni (2021) has identified other problems, such as the problem of unreliable internet access during the initiation and effective completion of an e-hailing transaction. The prevalence of internet fraud has resulted in a reluctance among a majority of drivers to utilize their online mobile banking applications for making payments for e-hailing services. Instead, they choose for cash payments, so undermining the potential of e-hailing services to contribute to the advancement of smart city initiatives. Moreover, Benjamin (2020) highlighted that these inimical problem has in recent time heightened the tension among public who would have love to use e-hailing services but however have resorted to conventional transportation. Upon this premise this study seeks to investigate an assessment of consumer behavior towards e-hailing: a critical review of Uber.          

1.3 Objective of the study

The study is focused on  an assessment of consumer behavior towards e-hailing: a critical review of Uber. Other specific objectives includesL

i.          To examine the perception of consumers towards Uber e-hailing services

ii.        To investigate the factors affecting adoption and usage of mobile appbased cab services 

iii.      To identify the popular mode of payment preferred by consumers while availing these services. 

iv.      To ascertain whether privacy and safety is a matter of concern for various consumers availing e-cab hailing services.

1.4  Research Questions

i.          What is the the perception of consumers towards Uber e-hailing services?

ii.        What are the factors affecting adoption and usage of mobile appbased cab services?

iii.      What is the popular mode of payment preferred by consumers while availing these services?

iv.      Are privacy and safety  a matter of concern for various consumers availing e-cab hailing services?

1.5  Hypotheses of the Study

Ho: Consumer behaviour towards Uber e-hailing services in Nigeria  negative.

Hi: Consumer behaviour towards Uber e-hailing services  in Nigeria is positive.

1.6       Significance of the study

There is requirement of sound and futuristic regulatory framework which would lead to better development of the cab hiring economy. Presently, there are no clear guidelines for consumers as whom to approach in case of any fraud happening to them. If there are proper rules and regulations in place, it will encourage more people to use e-hailing applications. Findings of this study will advocates the development of a comprehensive policy to address all of these issues because they are shared by each state government in Nigeria. Cab aggregators by the findings of this study can collaborate with insurance companies so as to take care of the security concerns of the riders. Both life insurance and general insurance can be offered as per the need and choice of the consumers.

 Empirically the study will add to the general body of knowledge and serve as a reference material to scholars and student who wishes to conduct further studies on related field.

1.7 Scope of the Study

The scope of this study borders on an assessment of consumer behavior towards e-hailing: a critical review of Uber. The study further discussed the perception of consumers towards Uber e-hailing services, the factors affecting adoption and usage of mobile appbased cab services, the popular mode of payment preferred by consumers while availing these services and ascertain whether privacy and safety is a matter of concern for various consumers availing e-cab hailing services. The study is however delimited to Federal Capital Territory Abuja.

1.8 Limitation of the Study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing that it is a new discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work. However in spite of the constraint all these constraint were downplayed to give the best.

1.9       Definition of terms

E-hailing: E-hailing refers to the process of ordering a car, taxi or any other mode of transportation by way of computer or mobile device.

Uber: Uber Technology Inc is a ride-sharing transportation firm that was introduced in Nigeria in the year 2014.

Consumer behaviour: Consumer behavior is the actions and decisions that people or households make when they choose, buy, use, and dispose of a product or service.