Final Term Paper

Factors affecting the consumer acceptance of Uberpool service in Dhaka city.

MARKETING RESEARCH
MKT 426

Submitted To:
Dr. Khan Taufique
Asst. Professor
BRAC Business School
BRAC University

Submitted By:
Sadia Afroz – 13204005
Farhana Akman – 13304008
Ibrahim Khalil – 13304034
Rakshanda Tabassum – 13304057
Sumit Kumar Saha – 13304108
Jannatul Maria – 13304110
Tasmeem Rahman – 14104095
Fariya Akther Shemin – 14104115

Section: 01

Date of Submission
27th July, 2017
1. INTRODUCTION

Uber ride is popular among more than four hundred and fifty cities all over the world. It is more
like an option for the people who want a ride through a mobile. With the changes of time there
are innovations in this field of transportation. And uber is one of the innovations in the passage
of time. It is like a taxi service through a mobile app. The driver and as well as the passengers
need to install the app in their smart phone. This innovative taxi service can be availed with
much ease. Recently this online taxi service is very popular in Dhaka. This service has started in
Dhaka city with a plan of expanding later on in the other cities. The fare and other issues are
discussed over the app. people face difficulties for hiring taxies so this app became very popular
as it is very easy to use. This became most affordable ride option among the other ride options.
Uber ridesharing feature is a famous offering in the other countries. This feature has an offer to
share the ride with another passenger. Uberpool is for sharing the ride in the same route.
Maximum four people can avail one single car on the same route at a time. Justification is needed
to introduce uberpool in Bangladesh

• Mostly cost effective ride.

• Convenient share direction.

• Maximum 4 people per ride

2. PROBLEM STATEMENT

Recently Uber service has been launched in Dhaka, Bangladesh and within a very short time;
they are getting huge response among the people of Dhaka. The reason behind of this huge
response is because of their service facility, people avail transportation to reach their destination
by using the app of Uber downloaded in their smartphones and so that demand of Uber service is
getting high among the people of Dhaka. So, if Uber introduces ride sharing service which is
known as Uber pool service in Dhaka, how would the people of Dhaka prefer this service that is
what we want to investigate.
3. LITERATURE REVIEW AND HYPOTHESES
Uber is currently valued at $18.2 billion relative to Hertz at $12.5 billion and Avis at $5.2 billion
and beyond individual firms, there are now more than 1,000 cities across four continents where
people can share cars (Sarah & Lawrence, 2014). Hence, the sharing economy is the response to
the “legacy economy” (Orsi, 2013), driven by the aspirations including fair distribution of value
that are more democratically organized, reduction of carbon footprints and the social calling to
fetch people together in new ways (Schor, 2014).

Uber firms are “simply using technology to rise up the efficiency by reducing obstacles to entry,
search costs and information asymmetries” (Rothschild, 2014). Since sharing economy has been
developed from the social media culture, many believe that one of the key motivations for
sharing is our innate desire for connection with each other. Moreover, Coyne

(2012) argues that “the Internet is leading to a global community of sharing, communicating, and
giving, with a free flow of information providing equality of access”, which represents true
humanity and a return to ethnic society in a digital age. However, in many literatures, sharing
economy is considered as “stranger sharing”, which helps to deal between people who do not
know each other (Schor, 2014). While the Internet helps strangers meet, communicate and link
them up in the physical world, “the extent to which people are connected to each other is lower
than what humans need” (Tanz, 2014). In short, many of the Uber ride and economy sharing
firms are basically here to facilitate pure economic relationship.

Dependent Variable: Customer’s/Passenger’s Acceptance for Uber Pool Service. Independent

Variables: 1) Safety; 2) Cost Minimization; 3) Transport Availability.

Safety

Customer’s/passenger’s
acceptance
Cost Minimization

Transport
Availability
Figure 1: Dependent and independent variable
 Customer’s Safety: Safety and security of a passenger is a very big issue when Uber ride
sharing topic comes. With whom you are going to share your ride to the same destination and
whether he/she is good or bad in behavior is a matter of concern. So customer’s acceptance for
Uber pool service is completely dependent on its secured way of sharing rides with unknown
people.

Cost Minimization: People of medium income level sometimes tend to share their rides in order
to minimize their cost. They can easily travel by Uber pool service when the fare is high as they
can save some money through sharing rides towards the similar destination.

Transport Availability: The Uber pool service mainly offers maximum 4 people to share their
rides. So it is better to share rides when there is shortage of cars, buses or other vehicles.

Customer’s/Passenger’s Acceptance: How customers take the ride sharing matter and how it
contributes to them in their daily life is our main concern. Hence, people will only accept the
Uber pool service if they get proper security with a balanced fare share and transport availability.

Figure 2: Hypothesized model of Safety, Cost Minimization and Transport Availability.

Safety: Safety is one of the most important issues that customer considers in terms of having
ridesharing service. According to the reviews that passengers left on uberpeople.net safety is the
major concern of ridesharing on uber. Shared ridesharing is bad because people are unpredictable

Cost
minimization

Safety Transport
Availability

Customer
Acceptance
and unreliable (Koebler, 2006).Moreover critics says that peer to peer ridesharing is less safe
than traditional taxi service (Feeney, 2015).

H1: Safety is negatively related in terms of creating consumer acceptance towards uber
ridesharing feature.

Cost Minimization: Most of the uber users prefer the ridesharing feature to minimize their cost.
Uber focuses on splitting the customers cost through ridesharing. The observation of ridesharing
reviews basically indicates that minimizing the cost is the main motive of the consumers.
“Unlike with UberX, which will only provide a fare estimate, UberPool will guarantee your fare
with minimum cost” (FIORILLO, 2016).moreover during the peak times uber costs high price
which can be minimized through ridesharing. “New York, Philadelphia, Washington D.C. and
several European cities. When they sign up for the service, users authorize their driver to pick up
other passengers on the way to their destination in exchange for a lower price” (Uber and the
Ethics of Sharing:Exploring the Societal Promises and, 2016).

H2: Cost Minimization is positively related in terms of creating consumer acceptance towards
uber ridesharing feature.

Transport availability: Ride sharing feature of uber provides consumer access to uber more
efficiently. Four passengers at a time can access one uber car. “Uber’s operations covers 75% of
the US population” (Uber: Competing as Market Leader, 2016).

H3: Transport availability is positively related in terms of creating consumer acceptance towards
uber ridesharing feature.

Consumer acceptance: Analyzing consumer acceptance of uber ridesharing feature is the main
moto of our research. Creating consumer acceptance towards any new service is very important.
Safety is one of the major challenges to create positive thought about ridesharing. However, cost
minimization and transport availability are two major persuasive positive issues which helps to
build positive consumer acceptance.
4. METHODS

4.1 Sample and Data Collection: A convenience sample of 100 respondents has been
surveyed through online for our research purpose. Of the total respondents 73% were
male and 27% were female; 92% were between the age of 18-30 and 6% were
between the age of 31-45; Moreover,

76% respondents’ monthly income is between 20,000 taka or less and 18% respondents’ monthly
income is between 21,000 taka – 40,000 taka. Through our survey, we got to know that 92% of
respondents will recommend to use Uber and its Uberpool service to their family and friends.
Also, 82% of respondents have shown their concern about the safety issue on Uberpool service.
However, when we asked them to choose which is the most important factor for choosing
Uberpool service, 49% of respondents have chosen the price (affordability) factor, 26%
respondents have chosen safety factor, 13% chose car availability and 12% chose ease of use
(convenience). Besides, 52% of our respondents said that they have been overcharged by Uber
application sometimes and 64% of them have been suffered by the unprofessional behavior of
Uber drivers during ride. Furthermore, we got to learn that, 49% of our respondents use Uber
service just once in a week and 29% use it for 2-3 times in a week. Lastly we want to inform that,
about 85% of respondent’s desire Uberpool service if they get proper security and if they face
Uber fair affordability problem and don’t find available vehicles in the roads.
 4.2 Data Analysis and Results

Hypothesis Causal Path Standardized S. E value Result

Coefficient
H1 Safety in terms of consumer .169 .046 Significant
acceptance towards uber ride

sharing feature
H2 Cost minimization in terms of .293 .005 Significant
consumer acceptance towards
uber ride sharing feature

H3 Transport availability in terms of .334 .001 Significant

consumer acceptance towards
uber ride sharing feature

R square value ranges from 0 to 1; it indicates the fit of overall model (the total relationship
between independent and dependent variable). Here R Square value is .350 that means the model
fit is weak If the P value of error is less than or equal .05 then it is acceptable. Here in 1st
hypothesis P value is .046 it means the result has significant value in terms of consumer
acceptance toward uber ride sharing feature, in 2nd hypothesis p value is .005 it has also a
significant value in terms of consumer acceptance toward uber ride sharing feature, and in 3rd
hypothesis p value is .001 So overall our confidence level is high and error is low so it is
supported. Beta coefficient indicates the positive relationship between independent variable
(transport availability, cost minimization, safety) and dependent variable In hypothesis 1 the
value is .169, 2nd hypothesis the value is .293 and hypothesis 3 the value is .334 So it has a
positive relationship between dependent and independent variable.

5. DISCUSSION AND CONCLUSION

Uber is a completely new concept in Bangladesh. The acceptance of uberx service is still
growing. However adding the ride sharing feature in uber will be need to answer the question
“whether it will be accepted by the customers or not”. The main purpose of doing the research is
to identify the factors that will influence the consumers to accept the concept of ridesharing.
Secondary research allowed us to find out the possible factors that can have high influence on
customers. The findings of the primary research facilitate the justification of the hypothesis that
is build based on the secondary research. The study suggests that safety, cost minimization and
transport availability, all of them have significant positive influence on consumers in terms of
forming perception about uberpool service. On the other hand the literature review suggested that
safety has negative influence over consumer acceptance but that is not true in case of real
situations. Consumers in reality consider safety as a positive issue to accept uberpool service.

The study emerge some marketing implications related with the hypothesis. As safety is a very
important factor uberpool can try to develop the safety features. They may train their drivers
about morality ethics and how to behave politely. However, for cost minimization issues,
uberpool can give lucrative discount during office hours and different festivals. For
transportation availability, they can register more freelance drivers to their service and feature
them on their app. here Uber can be very responsive on uberpool requests. Therefore, in
consumers mind they can hold a constructive position. Such initiatives can help uberpool to
create and maintain a positive relationship with the customers.

6. LIMITATIONS AND FURTHER RESEARCH

Although this research was carefully prepared, there were some unavoidable limitations and
those are given below:

Time constraint: First of all, the research was conducted in two months and that was not enough
time for conducting a fruitful research.

Limitations of sufficient resources: If we talk about secondary resources then we have to say we
did not get enough information on internet about these kinds of topics that would greatly need for
conducting our research.

Scope of discussions: This type of research needs knowledge, experience, skill must and as we
don’t have enough knowledge, experience and skill, we have faced some problem to conduct the
research.
Implementation of data collection: As we needed to do survey and then we needed to properly
implement it but the limitation was extensive availability of primary data collection. For
example: sample size is too small to work appropriately.

Those are the limitations we faced while conducting the research. We think that these limitations
can be a good source to conduct further research for a researcher who is enthusiastic to conduct
this type of research.
7. REFERENCES

Feeney, M. (2015). Is Ridesharing Safe? Cato Institute.

FIORILLO, V. (2016, march 22). UberPool: I Came, I Saw, I Took Forever to Get Home.
Retrieved from Philadelphia: http://www.phillymag.com/news/2016/03/22/how-does-
uberpoolwork/

Koebler, J. (2006, May 23). Why everyone hates uberpool. Retrieved from Motherboard:
https://motherboard.vice.com/en_us/article/4xaa5d/why-drivers-and-riders-hate-uberpool-
andlyft-line

Uber and the Ethics of Sharing:Exploring the Societal Promises and. (2016). Insead.

Uber: Competing as Market Leader, 04 (2016).

APPENDIX

Questionnaire:

• Have you ever ridden in an Uber vehicle as a customer? (If not, you do not qualify to
participate in this survey).

-Yes

-No

• "Uber is fair in terms of pricing" please indicate your level of agreement with the
statement.(cost minimization)

Highly disagree disagree neutral agree Highly agree

• "Uber is highly responsive to ride requests" please indicate your level of agre ement with
the statement.(transport availability)

Highly disagree disagree neutral agree Highly agree

• "Splitting the cost with others will make you use uber more frequently” please indicate
your level of agreement with the statement.(cost minimization)

Highly disagree disagree neutral agree Highly agree

• "Lack of public transport facilitates the acceptance of uberpool" please indicate your level
of agreement with the statement.(customer acceptance)

Highly disagree disagree neutral agree Highly agree

• “Are you willing share your uber rides with others for travel safely?"please indicate your
level of frequency.(safety)
always Less frequently frequently Most frequently Highly Disagree

• "Ride share features will decrease the transit time of uber"please indicate your level of
agreement with the statement.(transport availability)

Highly disagree disagree neutral agree Highly agree

• How many times do you use Uber service in a week? (Customer acceptance)

once 2-3 times 4-6 times 7-10 times 10+times

• Are you satisfied with the service of Uber? (customer acceptance)

Highly Satisfied Satisfied Neutral Dissatisfied Highly

Dissatisfied

• Are you happy with the current safety features offered by uber?(safety)
Highly Satisfied Satisfied Neutral Dissatisfied Highly

Dissatisfied

• How would you rate the quality of Uber's customer service? (customer acceptance)
Highly Satisfied Satisfied Neutral Dissatisfied Highly

Dissatisfied

• “Uber is safe” Please indicate your level of agreement with the statement. (safety)

Highly Agree Agree Neutral Disagree Highly Disagree

indicate your l of agreement with the statement.

leve (cost
• “Uber is affordable” Please
minimizati on)

Highly Agree Agree Neutral Disagree Highly Disagree

• D o you us e uber alone? (safet

y)

always Less frequently frequently Most frequently always

• What is your age group?

Below 18 18-35 36-45 46-60 60+

 • What is your gender?

• Male

• Female

• What is your yearly income level?

20000 or less 21000-40000 41000-60000 61000-80000 80000 or more

SPSS output:
Statistics

ACC1 ACC2 ACC3 ACC4 SF1 SF2 SF3 SF4 CM1 CM2 CM3 TA1 TA2
N Valid 100 100 100 100 100 100 100 100 100 100 100 100 100
Missin 0 0 0 0 0 0 0 0 0 0 0 0 0
g

Minimum 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Maximum 5.00 5.00 5.00 4.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Model Summary
Model Adjusted R Std. Error of
Square the Estimate
R R Square
dimensi 1 .591a .350 .329 .46465
on0

a. Predictors: (Constant), TA_MEAN, SF_MEAN, CM_MEAN

Coefficientsa
Model Unstandardized Standardized
Coefficients Coefficients
B Std. Error Beta t Sig.
1 (Constant) .972 .313 3.100 .003
SF_MEA .145 .072 .169 2.019 .046
N
CM_MEA .254 .088 .293 2.874 .005
N
TA_MEA .223 .068 .334 3.301 .001
N
a. Dependent Variable: ACC_MEAN