CHAPTER 1: INTRODUCTION

AN OVERVIEW

A decade ago, ride-hailing also known as e-hailing was never heard off. However

today, e-hailing service is a well-known and have become a multi-billion-dollar industry and it

is still booming. The global ride-hailing service market was valued at $36,450.0 million in

2017, and is projected to reach $126,521.2 million by 2025, registering a CAGR of 16.5% from

2018 to 2025. North America was the highest contributor to the global market in 2017

garnering a CAGR of 12.7% during the forecast period (Padalkar & Jadhav, 2018). People are

now increasingly turning to an online and app-enabled platform as an alternative to solicits

rides to get around town. It is all due to convenience as well as transparent and competitive fees

this industry had to offer. Ridehailing or e-hailing services enables passengers to hail a vehicle

using online platforms such as Grab, MyCar, Uber, GetCar and many others as it serves as one

of the most comfortable means of transportation. It also provides door-to-door services.

Moreover, while hailing a ride, information of the passenger and the driver are exchanged,

making the service much safer than traditional taxi services. There are currently 31 e-hailing

firms in Malaysia that consumer can choose from.

The key factors that drive the growth of the global ride-hailing service industry are rise

in trend of on-demand transportation services, creation of employment opportunities, and lower

rate of car ownership among millennials (Padalkar & Jadhav, 2018). Furthermore, in this era

of sharing economy, one of the significant subclassification that emerged within the

transportation industry is the “Shared Mobility” (Shaheen, Chan, Bansal, & Cohen, 2015). The

concept of shared mobility is distinguished from the conventional methods of public

transportation, whereby e-hailing, ridesourcing, ridesharing and carpooling services are

provided to complement the needs of designated customers. The use of a private vehicle to

transport a paying passenger that is facilitated by the uses of technology and apps are known as

“E-Hailing” in Malaysia, while in North America and Europe, these services are known as

“RideSourcing” or “Ride-Hailing” (Shaheen, Chan, Bansal, & Cohen, 2015). This type of

sharing economy is thriving tremendously as it become essential in the transportation industry

nowadays.

In this study, the researchers will enlighten the reader regarding the background of the

study which would tell about their research, the problem statement from their research, the

research objective and the question of their research as well as the significant of the study.

BACKGROUND OF THE STUDY

First of all, what is e-hailing? E-hailing can be defined as a process of ordering a car,

taxi, limousine, or any other form of transportation pick up via virtual devices such as

computer or mobile device. E-hailing services are known to be on-demand vehicle acquisition

that relies on network dependency and use of a specific digital application through the Internet

(Jais & Marzuki, 2020). E-hailing services like Grab have made it possible to secure a car or

taxi via a smartphone from any location.

On one hand the cost of e-hailing are however, is that this disruptive technology has

reduced the market share of traditional taxi services and lowered the overall profits of

traditional taxi drivers. This has caused a protest by traditionally taxi drivers in Malaysia
nationwide. More than 100 taxi drivers protested outside the Ministry of Finance in Putrajaya

after it was reported that the government may work with ride-hailing firm Grab to provide

transport services at MRT stations. Traffic in central Kuala Lumpur came to a halt on Tuesday

(March 29) morning as taxi drivers staged a protest against taxi apps Uber and GrabCar along

the city's main shopping belt. (Hwai, 2016). A protest was also held at Padang Merdeka by

Association for the Transformation of Malaysia Taxi Drivers (Persim) to voice their

disagreement over the new regulation on e-hailing services which was announced by Transport

Minister Anthony Loke.

Since the inception of e- hailing services in the transportation sectors of Malaysia in

2012/2013, the public had widely acknowledged and accepted the e-hailing services as a mean

of an alternative mode of transport (Frost & Sullivan, 2016). And on top of that, where only e-

hailing for cars is available for the time being, Grab is the dominant player in Malaysia. The

recent legalization of e-hailing services is a major breakthrough for the country as Malaysia

was the first country to legalize e-hailing services such as Grabcar and Uber. The provision to

monitor the ehailing services was made possible following the passing of the Land Public

Transport

(Amendment) Bill 2017 and the Commercial Vehicles Licencing Board Act (Amendment) Bill

2017. Under the bill, e-hailing drivers in the Peninsular were subject to the jurisdiction of the

Land Public Transport Commission (SPAD), while the Commercial Vehicles Licencing Board

(CVLB) regulated drivers in Sabah and Sarawak. The bills will also enforce similar

requirements imposed on taxi drivers to drivers of e-hailing vehicles, which includes health

checks, scheduled vehicle inspection, insurance coverage as well as the issuing of driver cards

(Jun, 2017).
 The legalization of e-hailing services in Malaysia had spurred a positive growth of the

industry. With the establishment of the Transportation Network Company, e-hailing to

continues to flourish, the industry was booming and considered as a complement to the existing

public transportation system. The growth of this industry showed that e-hailing services will

continue to be part of the Malaysian transportation sectors in the future (Jais & Marzuki, 2020).

The title is regarding e-hailing services in Malaysia. This study sought to examine the

effectiveness of e-hailing services (Grab) toward the community in Malaysia. Three aspects of

focus are the fees, the quality of services provided and knowledge of driver.

PROBLEM STATEMENT

A problem statement is a form of natural language used in any problem solving. A

problem statement is described in terms of scope, structure and its purpose. Analysis in

problem statement is a critical element of a structured problem solving that has not been

included in or explicated by traditional stage models of the process (Annamalai, Kamaruddin,

Abdul Azid & Yeoh, 2013).

There are three problems that the researcher has identified in this study which is the

first problem is the inconvenience in taking public transport such as bus, LRT, commuter and

train. The public transport that has been provided by the government are strict to a certain

location and destination only where some people need to travel far to reach a bus stop or a train

station to travel to their desire location. This cause inconvenience as people have to waste their

time and effort to go to the public transport area.

 The second problem statement is, the fees charges by conventional taxi that

inconsistence and inaccurate. Taxi is and personal mode of public transportation where taxi

help to deliver one person or a small group a person to one destination to another. But taxi

driver usually will charge them extra for some certain reason such as traffic congestion, heavily

raining, unwanted destination location and etc. This problem causes some people avoid using

conventional taxi as the price are not fix and sometime expensive as the taxi driver charges

unexpected rate where this will cause burden and a waste of money to the user/passenger.

The bad quality of services provided by conventional public transport. Taking a public

transport sometimes can cause a bad experience for someone who are unlucky on the day as

certain problem might happen during his/her trip to reach the destination. For example, of

problem is imprudent driver who drove recklessly to catch the trip time to reach a destination,

bad attitude service by the bus conductor or ticker service counter, unpleasant trip such as pack

of people, bad smell, inservice transport, transport broke down, delay and etc. This are some of

the most common problem that happen when using public transportation.

RESEARCH TITLE

Topic - The Effectiveness Of E-Hailing Services (Grab) Toward the Community in Klang

Valley.
RESEARCH GAP

One possible cause is the lack of integration and therefore, low service level and

accessibility (Malaysiakini, 2016). Public transportation companies are solely reliant on fare as

a primary source of revenue, though they can barely keep up with the high operating cost

because of low ridership because of poor service delivery (Economic Planning Unit, 2016).

This problem has since seen it is fair share of reduction since 1999 when technology

disruptors created E-hailing applications to provide an alternative means to commute (Meece,

2012). The general perception is that it provides better service, fixed pricing system, safety,

convenience and also created job opportunity for those who are unemployed (Smith, 2012).

However, the legality of such services rendered have come into question with its economic

effect on the transportation industry as they compete to gain market share. According to an

article by

Free Malaysia Today (2016), E-hailing services is still considered illegal because it involves
using private vehicles for commercial use as opposed to other regulated transport services.
However, people want the E-hailing services to be legalized because of its benefits which
includes cheaper fare, convenient booking, safety and quality (Julia, 2016). Despite the healthy
competition, many taxi drivers opposed to this idea as it is seen as a threat to their livelihood
(The Malay Mail, 2016).

E-hailing service has been supported by the exponential increase in smartphone usage

over the years spurning the ‘sharing economy’ (Kissonergis, 2015). One of the largest players

in the transportation sector of the ‘sharing economy’ is Uber. When the co-founders, Travis

Kalanick and Garrett Camp, had difficulty hailing a cab in Paris during one snowy night, they

saw an opportunity to create a service to cater to this untapped market (Uber, 2016). Eight
years later, Uber has grown multi-folds and expanded to over 450 cities worldwide and is

valued at $68 billion today (Kosoff, 2016). Since then, other ride sharing players like Lyft,

Didi, BlaBlaCar, Relay Rides, Sidecar and Ride joy entered the market offering similar

services (Gilpin, 2014). In Malaysia, the sustainability of the transportation industry is

continued to be marred by infrequency, limited accessibility, and traffic congestion resulting in

delays, timeliness, lack of road safety, loss of productivity and suppressed demand would

further affect the well-being of riders (The World Bank, 2015) with passengers beginning to

lose confidence on the reliability of the LRT service due to frequent downtime (New Straits

Times, 2016).

Hence, it is important to study the viability of these E-hailing services applications by

gaining a deeper understanding of the current user’s behavioral effectiveness factors of

adoption as well to investigate the segmentation possibilities of the users. This in turn will help

the industry continue to sustainably grow alongside other modes of transport and to ensure

availability of choice for the citizens without compromising quality. Policy makers would be

able to then ascertain the segments of riders to better serve the community.

RESEARCH OBJECTIVE

Research objective is defined as “a clear, concise, declarative statement, which provides

direction to investigate the variables. Generally, research objective focus on the ways to

measure the variables, such as to identify or describe them. The general objective of this study

is to identify the effectiveness of E-hailing services (Grab) towards the community in Klang

Valley.

The specific objectives of this research are:

1. To identify the significant relationship between the fees of GrabCar and the effectiveness

of ehailing (Grab) toward the community in Klang Valley.

2. To access the significant relationship between the quality of GrabCar services and the

effectiveness of e-hailing (Grab) toward the community in Klang Valley.

3. To determine the significant relationship between the knowledge of GrabCar driver and

the effectiveness of e-hailing (Grab) toward the community in Klang Valley.

4. To identify whether there is a significant difference in the mean of gender and the

effectiveness of e-hailing (Grab) towards the community in Klang valley.

5. To identify whether there is a significant difference in the mean of ethnic and the

effectiveness of e-hailing (Grab) towards the community in Klang valley.

RESEARCH QUESTION

Research questions are defined as “an answerable inquiry into a specific concern or issue. It is

the initial step in a research project. To fulfill the stated research purpose, five research

questions are designed in order to guide the research process:

1. Is there any significant relationship between the fees of GrabCar and the effectiveness of

ehailing (Grab) toward the community in Klang Valley?

2. Is there any significant relationship between the quality of GrabCar services and the

effectiveness of e-hailing (Grab) toward the community in Klang Valle?

3. Is there any significant relationship between the knowledge of GrabCar driver and the

effectiveness of e-hailing (Grab) toward the community in Klang Valley?

4. Is there any significant difference in the mean of gender and the effectiveness of e-hailing

(Grab) towards the community in Klang valley?

5. Is there any significant difference in the mean of ethnic and the effectiveness of e-hailing

(Grab) towards the community in Klang valley?

SIGNIFICANCE OF STUDY

This study is important because the effectiveness of e-hailing services (Grab) recently have

become a hot news inside the community in Klang Valley. So, this study is important and

relevant for the time being. The e-hailing services usage increased, it led riders to share their

opinions or discontent after indulging in the services. Therefore, in this study, online

sentiments on social media Facebook and Twitter with specific keywords mentioned, were

examined to identify the rider opinions towards the e-hailing services in Klang Valley.

Service quality (Seroquel) model was used as the foundation to examine the service quality

offered by the e-hailing service providers. The dimensions included were availability,

accessibility, information, comfort, safety, and the additional dimension of price all the data

(tweets) collected were classified into either a positive or negative sentiment, and to respective
dimensions manually, by referring to keywords. The results revealed that all the dimensions
show a negative trend in Klang Valley.

‘Comfort’ and ‘availability’ was ranked the first in Malaysia respectively, and the results

shown were due to riders demanded an e-hailing service that is available anywhere and
anytime when they need it. The study results provide a strong reference to practitioners to

improve on their service quality and allowed to identify which dimensions were concerned the

most by the riders in Klang Valley.

Moreover, Land Public Transport Commission (SPAD) took a chance to conduct an online

survey in October 2015. This is part of an extensive project with stakeholders to gather

feedback, identify weaknesses and strengths to be used as data to formulate initiatives to help

sustain the industry, improves drivers’ welfare, and enhance services to improve customer

experience.