VIETNAM NATIONAL UNIVERSITY – HOCHIMINH CITY

INTERNATIONAL UNIVERSITY
SCHOOL OF BUSINESS

THE IMPACTS OF SERVICE QUALITY,

CUSTOMER TRUST AND PERCEIVED
RISK ON CUSTOMER LOYALTY
THE CASE OF UBER IN HCM CITY

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF ARTS IN BUSINESS ADMINISTRATION

By

Student’s name: NGUYEN QUOC TRAN (BABAIU12072)

Advisor: NGUYEN MINH TUAN, DBA

Ho Chi Minh City, Vietnam

May 2016

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 THE IMPACTS OF SERVICE QUALITY,
CUSTOMER TRUST AND PERCEIVED
RISK ON CUSTOMER LOYALTY
THE CASE OF UBER IN HCM CITY

In International Business

International University - Vietnam National University HCMC

Under the guidance and approval of the committee, and approved by all its members,
this thesis has been accepted in partial fulfillment of the requirements for the degree.

Approved:

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Chairperson Committee member

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Committee member Committee member

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Committee member Committee member

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 ACKNOWLEDGENTS
First of all, I would like to express my heartfelt gratitude and deepest
appreciation to my research supervisor, Mr. Nguyen Minh Tuan, the lecturer at
International University, Viet Nam National University, Ho Chi Minh City. Thanks
to his thoroughness, I could profound my knowledge and complete this thesis with
all my efforts. Especially in the final stage, his tutorials and recommendations and
helped me through the difficulties I had.
Secondly, I would like to give special thanks to all members of my thesis
committee for their comments and suggests as well as my professors and lecturers at
School of Business Administration, International University for teaching and training
me these four years.
The final is my appreciation and thanks to all the participants (my friends and
people in garment companies) who contributed to my work.

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 Plagiarism Statements
I would like to declare that, apart from the acknowledged references, this thesis
does not use language, ideas, or other ortiginal material from anyone; nor has not
previously submitted to any other educational and research programs or institutions. I
fully understand that any writings in this thesis contradicted to the above statement
will automatically lead to the rejection from the BA program at the International
University – Vietnam National University Ho Chi Minh City.

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 Copyright Statement
This copy of the thesis has been supplied on condition that anyone who
consults it is understood to recognize that its copyright rests with its author and that no
quotation from the thesis and no information derived from it may published without
the author’s prior consent.
©Nguyen Quoc Tran – BABAIU12072 – 2012

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 Table of Contents
ACKNOWLEDGENTS ............................................................................................ iii

List of Figures ............................................................................................................ ix

List of Tables .............................................................................................................. x

CHAPTER I: INTRODUCTION ............................................................................. 1

1.1 Background ....................................................................................................... 1

1.2 Rationale ........................................................................................................... 2

1.3 Problem statement ............................................................................................. 3

1.4 Research questions: ........................................................................................... 4

1.5 Research objectives: .......................................................................................... 4

1.6 Scope and limitation ......................................................................................... 4

1.6.1 Scope of research: ...................................................................................... 4

1.6.2 Limitation of research: ............................................................................... 4

1.7 Implication ........................................................................................................ 5

1.8 Research structure ............................................................................................. 5

CHAPTER II: LITERATURE REVIEW ............................................................... 6

2.1 Customer loyalty ............................................................................................... 6

2.2 The role of customer loyalty in taxi industry .................................................... 7

2.3 Service quality .................................................................................................. 8

2.4 Relationship between service quality and customer loyalty ............................. 8

2.4.1. Reliability .................................................................................................. 9

2.4.2. Responsiveness .......................................................................................... 9

2.4.3. Empathy ................................................................................................... 10

2.4.4. Assurance................................................................................................. 10

2.4.5. Tangibeness ............................................................................................. 10

2.5 Customer trust ................................................................................................. 10

2.6 Relationship between service quality and customer trust ............................... 11

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2.7 Relationship between customer trust and loyalty ........................................... 11

2.8 Perceived risk .................................................................................................. 12

2.9 Relationship between customer trust and perceived risk ................................ 12

2.10 Relationship between perceived risk and customer loyalty ............................ 13

2.11 Theoretical framework .................................................................................... 13

2.11.1 David Gefen (2002) ................................................................................. 13

2.11.2 Conceptual framework............................................................................. 14

CHAPTER III: INTRODUCTION ABOUT UBER COMPANY ....................... 16

3.1 Introduction ..................................................................................................... 16

3.2 Organization structure ..................................................................................... 17

3.3 Competitive advantages and disadvantages .................................................... 17

3.3.1 Competitive advantages ........................................................................... 17

3.3.1 Competitive disadvantages ...................................................................... 18

CHAPTER 4: RESEARCH METHODOLOGY .................................................. 19

4.1 Research Methodology ................................................................................... 19

4.2 Questionnaire design ....................................................................................... 19

4.3 Data collection ................................................................................................ 22

4.4 Data Analysis .................................................................................................. 22

CHAPTER V: DATA ANALYSIS & RESEARCH RESULT ............................. 24

5.1 Sample Description ......................................................................................... 24

5.2 Demographic ................................................................................................... 24

5.3 Descriptive statistics ....................................................................................... 26

5.4 Reliability Test ................................................................................................ 30

5.5 Exploratory Factor Analysis (EFA) ................................................................ 33

5.6 Structural Equation Modeling (SEM) ............................................................. 35

5.7 Confirmatory Factor Analysis (CFA) ......................................................... 36

5.8 Reliability and validity ................................................................................ 37

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 5.8.1 Reliability ............................................................................................. 37

5.8.2 Convergent validity .............................................................................. 39

5.8.3 Discriminant Validity........................................................................... 40

5.9 SEM analysis ............................................................................................... 40

5.10 Testing the Hypotheses ............................................................................... 40

CHAPTER VI: CONCLUSION & IMPLICATION ............................................ 47

6.1 Conclusion ...................................................................................................... 47

6.2 Implications ..................................................................................................... 48

6.3 Recommendation ............................................................................................ 48

6.4 Limitation ........................................................................................................ 50

REFERENCES ......................................................................................................... 51

APPENDICES .......................................................................................................... 53

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 List of Figures

Figure 1: Model of Customer Loyalty in E-Commerce ........................................ 13

Figure 2: Proposal conceptual framework ............................................................ 15
Figure 3: The organization chart of Uber company ............................................. 17
Figure 4: SEM result ............................................................................................... 46

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 List of Tables
Table 4. 1: Measurement Scales ............................................................................. 20

Table 5. 1: Gender .................................................................................................... 24

Table 5. 2: Age .......................................................................................................... 24
Table 5. 3: Job .......................................................................................................... 25
Table 5. 4: Income .................................................................................................... 25
Table 5. 5: Usage ...................................................................................................... 25
Table 5. 6: Descriptive Statistics ............................................................................. 26
Table 5. 7: Cronbach's Alpha of Variables ........................................................... 30
Table 5. 8: KMO and Bartlett's Test ...................................................................... 34
Table 5. 9: Total Variance Explained .................................................................... 34
Table 5. 10: Pattern Matrix ..................................................................................... 34
Table 5. 11: Appropriate measure .......................................................................... 36
Table 5. 12: Summary of CFA results .................................................................... 36
Table 5. 13: Regression Weights ............................................................................. 37
Table 5. 14: Standardized Regression Weights ..................................................... 38
Table 5. 15: Convergent and discriminant validity and correlation matrix....... 39
Table 5. 16: P-value used for testing the hypotheses ............................................ 41
Table 5. 17: Result of Hypotheses Testing ............................................................. 44

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 ABSTRACT

The development of transportation and speed of technology with the

globalization after participating in the WTO has brought Vietnam opportunities to
chasing the civilization with new foreign providers together with the challenges for
domestic companies for gaining success. However, in order to have the long-term
business achievement, customer loyalty is a key for any transport providers

In an attempt to investigate the determinants that influence customer loyalty,

after reviewing a wide range of literature, the model of David Gefen (2002) would be
the most appropriate to my study. This model includes four contexts: service quality,
customer trust, perceived risk and customer loyalty while service quality is built by
five dimensions of SERVQUAL and perceived risk is the negative mediating
determinants between customer trust and customer loyalty.

Regarding to the purpose of this study, the quantitative and qualitative method
are combined to complete the method. Be more specific, 126 questionnaires were
distributed to students in VNU and 244 online surveys (email, google survey) to office
staffs in HCM City. As a result, the study showed that service quality and perceived
risk have influence on customer loyalty. Meanwhile, unlike the proposed model of
Gefen (2002), there is no relationship between customer trust and customer loyalty.

Finally, the discussion and recommendations of this research are explicit

reported to help Uber to create strategies to strengthen and improve their
competitiveness, in other words, to become success through maintaining loyal
customers, which lead to win the market share from domestic taxi companies.

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xii
 CHAPTER I: INTRODUCTION

1.1 Background
Vietnam is one among many countries that has rapid population growth.
Transportation is a necessity due to the derivative activities supporting the
development of political, economic, social and etc. Urban transport provides the basic
link between homes and the place of employment, and between the users and producers
of goods and services. The level and nature of the urban transport network also
influences the cost and efficiency of other urban services like water and sewerage,
waste disposal, health, and education. Physical expansion of cities and rapid growth of
urban population exerts tremendous pressure on the cost and accessibility of transport
services. Due to the fact, the development of transportation in Vietnam are running
slow compared to other neighbor countries. It is being considered as the lower
perceived quality. There are various types of public transportation in Vietnam, Taxi is
one of them. The provision of taxi services is a traditional solutions, taking advantage
of the positive attitudes of both individual vehicle transport and public transport
services. Taxis are cars used for transport services which provides door to door
personal transport services.

Developing from monopoly market controlled by the State to become a new

competitive market with the rapid advancement of the speed of technology attaching
with Vietnam joining WTO has brought the opportunities for new service providers,
as well as a challenge for the current ones. Therefore, the competition of taxi market
is further sharply. In Vietnam, taxi’s service industry are grow very fast, especially in
the large cities, business centers, tourist attractions, and etc. According to HCM City
Taxi Association, taxi is expected to rise to 9,500 taxies in the year of 2010-2015,
however, in 2010 the number of taxi in HCM City is 12,551, which transcends the
expected taxis in 2020 (12,700 taxies). The taxi association of Ho Chi Minh city
reported that Vinasun has 45 percent market share, Mai Linh 25 percent and 30%
belong to other taxi companies such as: VinaTaxi, PetroGas Taxi, Hoang Long, S
taxi…etc. This figure demonstrates that Vietnam is an energetic and rolling market. In
order to have a durable position in the market, these providers have to compete each
other through expense lowering and continuous promotion to create a wave of

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subscribers moving from this brand to another one. This situation determines that
customers currently are no longer loyal to providers as in the period of monopoly
market before 2003.

In the future, it will be very difficult and costly for advertising and promotion
to find new customers when the number of taxis reach saturation point. The applicable
for this problem is the maintenance of existing customers because not only lessen the
efforts for advertisement and promotion, keeping customer loyal costs less 6 times
than attracting new customers (Rosenberg & czepiel, 1984). Moreover, Srivasta,
Shervani & Favey (2000) argued that customer loyalty is examined as a useful property
and a method to protect market share of companies (Dawkins & Reichheld, 1990).
From this fact, researching about customer loyalty brings necessity and enormous
implication which is not only for each taxi company in particular, but also for the
transportation sector of country in general.

1.2 Rationale
Nowadays, taxi becomes more and more important in our life. Considering as
one of the most useful mode of transport, taxis are used widely all over the world in
general and in Vietnam in particular. Taxi meets the need to travel speedily and safely,
saving time and other costs for users. Besides, smartphone currently grow into a
necessity for anyone in this social network century, which leads to the appearance of
a trending, smartphone application development. Under this highly dependent
characteristic, Travis Kalanick and Garrett Camp developed, marketed and operated
the Uber mobile app, which allows customers with smartphone to submit trip request
by finding and routing to Uber drivers who use their own cars. Taking advantage of
the combination of the positive characteristics of both individual vehical transport and
the explosive of smartphones, the service was available in over 60 countries and 404
cities worldwide.

In July 2014, Uber began to appear in Vietnam and it has brought a more
reliable and efficient transport option than old taxis for people with accurate GPS,
drivers’ information, type of car and fare based on GPS, etc. The contentment from
customers and benefit for drivers has been astounding lead to the explosion of Uber
registers. Therefore, make Vietnam become one of the fastest growing markets ever.

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Vietnamese consumers clearly love choice and Uber is committed to providing more
options in cost and appearance for everyone.

Contrary to the enthusiastic support from the community, many parties such as
the largest taxi companies in HCM City are blocking the development of the
technology at any cost. Uber found they are putting their own benefits above the
interests of consumers to protect their monopoly position. In fact that, in the Southeast
Asian cities which personal income is similar or greater to Ho Chi Minh City, the taxi
cost is much cheaper. Be specific, the average cost for a taxi in Bangkok is
4,500VND/1km, in Manila is 5,600VND, in Jakarta is 7,200VND and even in
Singapore just 10,000VND /1 km. And in Ho Chi Minh City, the charges amounted to
17,000VND for one km. For that reason, the appearance of Uber bring more solutions
for Vietnamese users with a reasonable fare: 7,000 VND/1km for low-priced UberX
and 11,499 VND/1km for luxury UberBlack brand. Despite of leading all price points,
market share of Uber is still modest comparing to domestic taxi companies such as
Vinasun or Mai Linh, especially when those announced to compete Uber by releasing
taxi-calling app on smartphone, Vinasun app and the current competitor GrabTaxi.
The transportation market is a zero sum game where a benefit for one company is a
loss for another. Unlike chat app battle, people can download multiple chat apps and
use them simultaneously, with a car booking app, when a potential customer books on
Uber that is a loss for GrabTaxi. Therefore, in order to stay competitive with all of the
above , Uber should carry out well strategies to attract new customers as well as remain
the current ones. And when the subscribers reach to saturation point in the nearly
future, maintaining loyal customers is an extremely important responsibility. That is
why Uber should find out the appropriate strategies to build up the loyalty of
passengers to help company increase the market share in Vietnam transport market.

1.3 Problem statement

There are some reasons that we need to conduct this study. Firstly, the overall
battle between Uber and other taxi companies may be unfair. Vinasun or Mai Linh, are
in the position of lobby and more beholden to regulation, use their favor in
relationships with the media by releasing incorrect information to restrict Uber
development. Secondly, with the older position of domestic companies, it is difficult
for Uber’ path to win the market share from those domestic companies. However,
nowadays, especially young people who absorb and update new technology very

3
quickly and come to the better values, Uber with its extra $1.2 billion of funding (Wall
Street Journal) simply provides a better service via its app and high quality cars and
drivers. This slowly eat away at the taxi companies. These scenarios possible will not
play out. Hence, it is very necessary for Uber to conduct a research measuring the
loyalty of their customers. That is the reason why I decided to choose the topic:

The Impacts of Service Quality, Customer Trust and Perceived Risk on

Customer Loyalty

The Case of Uber in Ho Chi Minh City

1.4 Research questions:

Based on the problem background the following research questions have
been derived:
- How can Uber win market share from Vietnam domestic taxi companies?
- What factors has the most influences on customer loyalty?
- How can Uber enhance loyalty of customers?

1.5 Research objectives:

- To identify the strategies Uber can apply to enhance their market share in
Vietnam taxi industry
- To help Uber recognize clearly the power of service quality, customer trust
and perceived risk to conduct a correct plan of development
- To figure out recommendations for improving customer loyalty

1.6 Scope and limitation

1.6.1 Scope of research:
This research is conducted with the sample of 301 respondents in Ho Chi Minh
City. The main segments of respondents are senior students of universities and officers,
who have enough basic knowledge and experience in using Uber app. The result of
this study is expected to show the impact of above variables on customer loyalty. By
this way, Uber can build up the strategies to keep loyalty from customers and prevent
the immoral activities from other taxi companies.

1.6.2 Limitation of research:

Due to the time and resource constraints, this research is conducted in the small
scale in Ho Chi Minh City. Besides, this research has just been study by the level of

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student, so some skills are limited. Therefore, the result of this study only represented
for taxi Uber services in Ho Chi Minh City only; it is not used to generalize the whole
population.

1.7 Implication
The research is conducted by customers who have been using the mobile app
of Uber in Ho Chi Minh City. The result, hence, provides the overall picture of Uber
taxi in particularly and of taxi companies in generally, at the same time, indicates
which determinants help maintain the existing customers or building the customer
loyalty with company are. Since then, this research will suggest some
recommendations to promote and improve the customer loyalty not only for Uber but
also for all transportation sector in Ho Chi Minh City.

1.8 Research structure

. The structure of the thesis consists five chapters

Chapter 1: Introduction

This chapter presents the research background of the thesis, problem statement,
research question, research objectives, scope and implication

Chapter 2: Literature review

This chapter addresses an overview of Uber company, the conceptual model

and the theories of customer loyalty, service quality, customer trust and perceived, as
well as the effects of those factors to the customer loyalty in order to give a clear idea
about the research area and discusses previous studies.

Chapter 3 Introduction about Uber

This chapter presents the overview, organization, advantages and

disadvantages of Uber in Vietnam market

Chapter 4: Research methodology

This chapter presents the design, approach, questionnaire of my thesis.

Chapter 5: Data analysis & Research result

This chapter analyzes the data collected and presents the findings of the
research.

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 CHAPTER II: LITERATURE REVIEW

2.1 Customer loyalty

As stated above, in the context of the current competitive market, Uber
company is facing many challenges from other national competitors such as Mai Linh,
Vinasun, etc. So Uber’s position in the market depends on their ability to keep their
customers out of attraction from competitors’ products and services. In other words,
what they need is customer loyalty, and their rivals want it too.

In reality, loyalty is perceived as the most critical objects to decide whether

your clients repurchase your service or product again (Oliver, 1999). Customer loyalty
in traditional perspective includes two components: attitudes – personal feelings about
products or services to show the levels of loyalty, and behaviors to continuous increase
the scale and scope of the relationship between customers and companies. According
to Seyed (2007), customer loyalty has been described as customer's willingness to
continue supporting a firm over the long–term business, repurchasing and patronizing
goods and services from that company instinctively, and voluntarily recommending it
to friends and associates. They know what their current service offers and are less
likely to switch to a new service because it brings an element of the unknown. Be
specific, loyal customer is behaviors tend to choose a particular brand of product or
service to cover their needs and maintain a positive attitude toward that providers
whether they please customers or not (Jones, 1995).

Since then, building customer loyalty is regarded as the main feature in getting
market share in any industry, particularly in this transport market where dominated by
old domestic companies. Nevertheless, it is very challenging to build up the loyalty of
customers (Lovelock & Wirtz, 2011). For a customer to become and remain loyal, he
or she needs to believe that the products or services the organization offers are the best
alternative for him or her (Oliver, 1999; Dhevika & Subramani, 2005). A company can
get the sufficient benefits by remaining the current loyal customers (Pan, Sheng & Xie,
2011).

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2.2 The role of customer loyalty in taxi industry
In the keen competition environment of the taxi industry, customer loyalty was
measured as the base of competitive advantage and has an essential role on company’s
performance (Rust et al., 2000). The goal of any business is to increase profits through
some combination of lessening costs and surging revenue. However, focusing solely
on gaining new customers may not be the most economical way to increase
profitability. To reach a new customer, firms will have to spend more than five times
as much as to retain an existing one (Kotler and Keller, 2006; Wills, 2009). Customers
who already use the product or service do not require any attraction or marketing costs
because they are already familiar with the company and its product. While the
transportation industry's main focus is not making a profit but to stay competitive in
the transportation market, limited budgets make it important both to find ways to cut
costs and to increase revenue at the same cost. It seems likely that focusing some
efforts to increasing loyalty can do just that.

A loyal customer will continue to purchase or use the product or service in the
future; however, not only do they continue their patronage but they also tend to
increase their purchase volume over time (Reichheld 1996). For example, a person
may start to take the taxi for their commute trip to avoid high downtown parking costs.
If they receive quality service and are satisfied with the service, they will become more
comfortable with this travel option and may start using it to go to work every day.

Another benefit of repeat customers who trust the product or service provider
is that they will be less likely to defect the problems when they have one negative
experience because they know their overall experience has been positive and they trust
that the provider will correct the mistake so that the problem will not repeated. A first-
time taxi rider may never ride again if they happen to be on a taxi that experiences a
long delay, whereas, a loyal rider knows that this is not a common occurrence and this
one bad experience is less likely to cause them to choose another alternative.

Finally, word-of-mouth marketing from loyal customers to non-users are of

great value to the company or agency. Non-users who are unfamiliar with the product
or service to which they are being recommended are more likely to believe the opinions
of someone they trust over the advertisements or marketing campaigns for an
unfamiliar product or service (Reichheld 1996). People rely massively on their mode
of transportation to get them to their destination on-time and without problems; it plays
7
a crucial role in their lives and it may be difficult to convince them to change their
current habits. However, having a recommendation from a family member or friend
may be the best way to get them to do so. The opinion of those they trust will most
likely be more persuasive than the advertisements of the transit agency themselves.

2.3 Service quality

In business, service quality is considered as an important tool for a firm’s
struggle to differentiate itself from its competitors (Ladhari, 2008). Recently, the
invasion of Uber has made domestic transit companies pay more attention to their
service quality since they recognize that service quality can become their competitive
advantage and bring customers’ loyalty to businesses to stay competitive.

Service quality is a difficult concept to measure among researchers because of

its different definition in various majors (Bruhn and Georgi, 2006). Service could be
in the industry, performance or output with many attributes that cannot be applied the
same to a different business. However, there is one common about this concept among
researchers is that service quality refers to the extent between service performance to
customers’ requirement (Dotchin and Oakland, 1994; Asubonteng, 1996, Lewis and
Michell, 1990). To support that point, Parasuraman (1998) defined service quality as
“the overall evaluation of a particular service firm that results from comparing that
company performance with the customer’s general expectations of how companies in
that industry should perform”. In other words, service quality is the difference between
consumers' perceived service and their expectation to that company’s performance.
The expectation is defined as customers’ desires or wants, about what they think a
service provider should offer rather than would offer (Parasuraman et al, 1988). And
Gronroos (1984) explained the concept perceived service is the outcome from the
consumers’ experience of the service dimensions, which are both technical and
functional in nature. Technical quality indicates the result the service, and functional
quality specifies the delivering process of the service.

2.4 Relationship between service quality and customer loyalty

As stated in Zeitham et al. (1996), loyal customers cope with customer
intentions as a behavior attention to patronize the provider and to recommend that
product or service to other clients. Based on case studies (Heskett et al. 1994), one
method of expanding customer loyalty is through improving the quality of duty. Be

8
specific, since quality service is something that clients regularly need and esteem,
providing superb quality service should ostensibly build their eagerness to return and
repurchase more. Research indeed shows that perceived service quality, as measured
by adjusted SERVQUAL scales, in many well-known companies emphatically and
specifically impacts customer loyalty (Zeithaml et al. 1996).

The SERVQUAL, a gap model by Parasuraman, et al. (1988) has been proven
to be one of the appropriate ideal approaches for measuring the customers’ received
service quality. Moreover, it is a hypothetically valid method for measuring perceived
quality of users’ experience in transport. Because of the statement “perceived” and
expected” service, it apparently goes to one individual who unquestionable is a
consumer. Parasuraman, et al. (1985) indicated that five service quality dimensions,
identified by the SERVQUAL instrument, are used in various service organizations
and industries to measure service quality crosswise over industries including transport
service (Zeithaml et al. 1996). When applied SERVQUAL model to analyze in
transport service, Angur et al. (1999) concluded that the best measure of service quality
in transport service is SERVQUAL, which adapted attributes were: reliability,
responsiveness, assurance, empathy and tangibleness (Parasuraman et al., 1988).

2.4.1. Reliability
Parasuraman et al. (1988) stated that reliability is the most important variable
in common service. Reliability refers to take care of customers' services problems;
performing beneficial services right the first run; provide services at the guaranteed
time and keeping an error-free record. Reliability also consists of accurate order
fulfillment; exact in history and quote; correct in billing; accurate figuring of
commissions; keep services guaranteed. Reliability is an essential element of any
transport service. Enhancements in reliability benefit both clients and operators, as less
variable services diminish waiting time for passengers and allow for an efficient use
of resources by players (Nelson Carrasco, 2011).

2.4.2. Responsiveness
Parasuraman et al., 1985 defined responsiveness as the willingness or
preparation of employees to provide service. It involves timeliness of services.
According to Kumar et al. (2009) responsiveness includes understanding needs and
wants of the customers, advantageous working hours, individual consideration given
by the drivers, attention to problems and customers’ safety in their trip. The
9
responsiveness in transport service is the eagerness to help clients within the provided
services. Are employees helpful and ready to provide good service? Do they rapidly
notice to customers about changes in cost and operation schedule as well? Are they
willing to answer customers’ questions? Equally essential is that the management of
transport companies has realized the significance of excellent customer service and
actively works when clients’ needs their help (Ministry of transport, 2006). The greater
customers appreciate on Responsiveness, the higher customer loyalty is.

2.4.3. Empathy
Empathy was defined as the binding and individual thought the firm provides
its clients such as employees who understand the needs to pay personally attention to
their customers and advantageous business hours for customers (Parasuraman et al.
1985). To support that point, Ananth et al. (2011) referred to empathy in their research
on passenger transport service as giving convenient operating hours; giving personal
attention; and understand clients’ requirements. The higher customers appreciate on
Empathy, the higher customer loyalty is.

2.4.4. Assurance
Parasuraman et al. (1985) defined assurance as knowledge and cordiality of
employees and their approachability to inspire confidence and trust. In transport
section, assurance implies the polite and amiable employees and an ensured trip quality
to ensure passengers arrive at destination safely (Sadek et al., 2010). The higher
customers appreciate on Empathy, the higher customer loyalty is.

2.4.5. Tangibeness
According to Parasuraman, et al. (1985), tangibleness is defined as the
appearance of physical attitude as personnel, equipment or written materials. In the
study of transportation, tangibility includes modern looking equipment, physical
facility, and employees are well-dressed and materials are visually appealing. (Ananth,
et al., 2011). The location, the officers, the cars also take account of tangibleness
factor.

H1: Service quality a positive impact on customer loyalty

2.5 Customer trust

As stated in Reichheld and Schefter (2000), the customers’ level of trust is
another determinant of customer loyalty. Trust is further identified as “the
10
understanding of a risky course of action with the confident expectation that all persons
involved in the work will act competently and dutifully” (Lewis and Weigert, 1985).
In like manner, based on the research on trust in e-commerce (Gefen, 2000), based on
the feeling of confidence and assurance, customers who trust a company tend to
become vulnerable to actions taken by that organization.

Deutsch (1958) and Fukuyama (1995) argue about the important and necessary
of trust, because it is almost impossible to determine the business agreement fully and
rely on the other party not to take unfair advantage and not to engage in opportunistic
conduct without trust. According to Gefen (2000, 2002) research in e-commerce,
customer trust will refrain from unethical, opportunistic and undesirable behaviors. In
like manner, taxi industry, also has disreputable behaviors such as imprecise pricing,
presenting inaccurate route and distributing individual information without
permission.

2.6 Relationship between service quality and customer trust

Reichheld and Schefter (2000) indicated that service quality should also build
up customer trust. Trust is generally earned when the trusting party’s expectations are
met or surpassed. On the other hand, trust is ruined when customers’ desires are not
met without a justifiable explanation (Blau 1964). Service quality is the most important
part of such effective relationship through measuring whether the customers receive
their expected service when purchasing. Which implies that when customers’
experience service quality meet their expectation, their trust increase. Relationship
between quality and customer trust deal with the five proposed measurements of
service quality including: reliability, responsiveness, assurance, empathy and
tangibleness.

According to Parasuraman et al. (1985), exploration on SERVQUAL does not

state that whether the impacts of the different dimensions of service quality should be
distinctive. Therefore, these hypotheses relate to all the dimensions of service quality

H2: Service quality has a positive impact on customer trust

2.7 Relationship between customer trust and loyalty

Based on Gefen (2000), customer loyalty is generally about procuring
customer trust: customer who trust the supplier will return and propose that supplier’s

11
product or service to non-users and vice versa. Specifically, Sharma (2003) stated that
trust is a critical factor for a stable relationship. In 2011, research from Aurier and de
Lanauze’s noted that relationship between trust and attitudinal loyalty is causal.
Similarly, to gain the loyalty of customers, a business must first gain their trust
(Reichheld and Schefter, 2000). Moreover, support for those ideas comes from
research Gefen (2000) showing that the more customers who have experience in doing
business with the supplier, trust that service, the more they prefer to repurchase that
same service. Accordingly, it is hypothesized that:

H3: Customer trust has a positive impact on customer loyalty

2.8 Perceived risk

An official definition of risk is “a measure of the probability and severity of
adverse effects” (National Safety Council, 2003). In other words, risk is a distinction
between reality and possibility.
In term of risk perception, Dowing nd Staeling (1994) indicates the probability that
consumers perceive uncertainty or unfavorable outcomes when deciding to buy
products or service. Specifically, it is how concerned we are to a specific occurrence
and how we evaluate probability as well as the consequences of a negative outcome.
Several scholars (Conchar, Zinkhan, Peters, and Olavarrieta, 2004; Goyal, 2008) with
many different opinions in defining perceived risks had classified them into financial,
physical, performance, social, psychological and time risks. Among six risk
perceptions, financial and performance risks are described easier than others.

2.9 Relationship between customer trust and perceived risk

Ganesan in 1994 stated that trust influences the long-term orientation of a
customer by diminishing his/her perception of risk. Be specific, the more customers
believe in that company, the less vulnerable and unsafe feeling (Chaudhuri &
Holbrook, 2001). Likewise, trust has negative impacts on perceived risk and fear of
being take advantage of is also proven in Mayer et al. (1995) and Williamson (1985),
because, in general, no one expect opportunistic behavior from those whom they trust
(Blau 1964; Williamson 1985). In a market like Vietnam, where users are easily taken
advantages of, the most efficient method to build up customer loyalty through the
reduction of perceived risk is pay attention to gain more trust from users (Reichheld
and Schefter 2000). Therefore, it is certain to hypotheses that:

12
 H4: Customer trust has a positive impact on perceived risk

2.10 Relationship between perceived risk and customer loyalty

According to Weinstein (1989), perception of risk goes beyond the individual,
and it is a social and cultural construct reflecting qualities, images, history, and belief
system. Even when there are no risk or degree of risk is low, a high risk perception of
customers will make negative impacts to purchasing decision (Johnson, Sivadas &
Garbarino, 2008). Moreover, when customers perceive high risks in purchasing, they
would either get relative information or stop buying to reduce perceived risk. Hence,
consumers’ loyalty will lessen, be unwilling to repurchase or switch to other provider.
It is certainly hypothesized that:
H5: Perceived risk has a negative impact on customer loyalty

2.11 Theoretical framework

Model describing factors effecting customer loyalty have been examined and
developed by many different researchers and practitioners. The model used in this
study is applied and modified from model in Gefen (2002). Here are conceptual used
for this study
2.11.1 David Gefen (2002)
In this research, model of Gefen (2002) considered numerous factors from
different researches that may influence the loyalty of customers in e-commerce. The
first set of construct includes specific elements called SERVQUAL, which was first
introduced by Parasuraman et al. (1985) including: reliability, responsiveness,
assurance, empathy and tangibleness.

Figure 1: Model of Customer Loyalty in E-Commerce

13
 (Gefen, 2002)

The second set for this construct is the basic relationship between customer
loyal, customer trust and perception of risk. Specifically, for online purchasing,
customer trust is significantly necessary to increase customer loyalty through
diminishing customers’ perceived risk (Reichheld and Schefter 2000).
In addition, as hypothesized in Gefen (2002), customer loyalty in e-commerce
increased with dimensions of service quality both directly and indirectly through
customer trust.
2.11.2 Conceptual framework
In a competitive market, developing and sustaining the customer loyalty
becomes the biggest challenge in any multidimensional construct. The conceptual
framework of this study is adjusted from the model suggested by David Gefen (Journal
of the Association for Information Systems Volume 3, 2002), that conducted study of
the customer loyalty in e-commerce. The reason is that choosing this model helps to
make sure the strong relationship with perspective used to examine customer loyalty.
This conceptual model includes dimensions of SERVQUAL, customer trust, switching
cost and perceived risk in order to examine whether the customer loyalty can be
increased both directly and indirectly from customer trust in transportation of Vietnam.
However, based on Jones and Sasser (1995), if the products or service can be offered
by various suppliers, the switching cost is very low. Currently, Vietnam transportation
is dominated by many taxi companies with similar service method such as GrabTaxi
or Vinasun with developing process to create Vinasun app. Moreover, these creative
technology are free to use and not exclusive or unique make switching cost factor high.
Be specific, the process for changing to another providers is not difficult and take much
time. Consequently, switching cost is modified not to appear in this conceptual model.

This chapter presents brief description of the research methodology used in this
project. This includes proposed research model, research methodology; sample
selection methods, data collection methods and data analysis methods and so on which
brings a thorough road map of study is provided next.

14
Figure 2: Proposal conceptual framework

15
 CHAPTER III: INTRODUCTION ABOUT UBER COMPANY

3.1 Introduction
Uber Technologies Inc. was established in March 2009. Main company’s
business line is an American multinational online transportation network company. It
develops, markets and operates the Uber mobile app, which allows consumers with
smartphones to submit a trip request which is then routed to Uber drivers who use their
own cars. As of April 12, 2016, the service was available in over 60 countries and 404
cities worldwide.

In June 2014, Uber officially launched in Vietnam and it has transformed the
way people move around Ho Chi Minh City and Hanoi with a more reliable and
efficient transportation option. After 10 months, the response from riders and drivers
has been overwhelming and they have made Vietnam one of the fastest growing
markets ever, the second-fastest growing market after China and has surpassed major
cities like London, Paris, San Francisco and Singapore. Vietnamese consumers clearly
love choice and Uber is committed to providing more choice for everyone. From April
2015, Uber thrilled to launch our most affordable ridesharing option – UberX in Hanoi
and Ho Chi Minh City

Uber process through customer requests from a smartphone app and Uber
sends its nearest driver to their location, using the phone’s GPS. Then, the fare is
precise predictable charged directly to your credit card. Moreover, Uber provides five
types of services: UberX, Uber Taxi, Uber Black, Uber SUV and Uber Lux. However,
in Vietnam, there are only two possible: UberX the cheapest option which allows for
the hiring of livery car drivers with a smartphone and UberBlack a private hire car.
Uber development in the hope of connecting individuals having cars and possible
business by private cars, so people who have a car and license can register to the Uber
Company. According to the company website, all ride-sharing and livery drivers are
thoroughly screened and the company conducts ongoing reviews of drivers’ motor
vehicle records throughout their time with Uber.

16
3.2 Organization structure

Figure 3: The organization chart of Uber company

The organization structure, keeps an important role in helping the company

ensure close coordination among the departments. The company is managed by under
the board of directors including Travis Kalanick, David Bonderman, Devid
Drummond and Bill Gurley and 7 departments which carry out various duties. Each
room has a principal's office that manages and directs his or her inferior employees.
This is a simple model organized, easy to apply.

3.3 Competitive advantages and disadvantages

3.3.1 Competitive advantages
Uber taxi is more affordable pricing than other taxies, price can be estimated
prior to ordering ride. Moreover, Uber offers a very convenient experience from
beginning to end: intuitive app to order ride without calling, driver information
provided to passenger, follow ride via map on app once in car, and disembark without
exchange of cash or tipping by instant debit of credit card and detailed instant green
receipt providing ride details including total price, route and gratuity

The drivers are friendly and safe with a rating system allows for transparency
and accountability to drivers. In addition, Uber cars are better, they are cleaner, newer
and have option of car classes. And also the better customer service: issues dealt with
quickly and fare often refunded when client unsatisfied with service, proactive
customer service when driver poorly rated and promotions, coupons, referral bonus.

17
Lastly, Uber hires more than 50,000 drivers worldwide each months, created jobs for
more than 15,000 people in Vietnam (Dang Viet Dung, Uber Director in Vietnam).

3.3.1 Competitive disadvantages

Besides those advantages, some recent scandals such as allegation of being
illegal business or unsafety ride for female passengers have made users worry about
the service quality of Uber taxi. Moreover, there are some problems for people who
never use credit card for purchasing that credit card, smart phone and data are required
to sign up, which lead to credit card information is open to exposure.

Driver managing is also a problem Uber company need to solve. There are
many allegation of the driver quality: unknown driver trainer, some Uber drivers have
less knowledge of the roads and routes and drivers’ nature and extent of background
check done by Uber unknown. Finally, surge pricing in rush hours of Uber meets a lot
of complaints from the customers.

18
 CHAPTER 4: RESEARCH METHODOLOGY

4.1 Research Methodology

The research will use the mixed method, which is the combination of
qualitative and quantitative methods. We collect and analyze both quantitative and
qualitative data to understand it more deeply (Creswell, 2002). Moreover, the result
from the quantitative process, will give an overview about customer loyalty in
transportation, while the qualitative approach will clarify and explain the statistical
data.
Specifically, the quantitative approach uses numerical data which that
purpose is identifying the potential predictive of chosen determinants or predictors.
Meanwhile, qualitative research will be applied to secondary data such as books,
articles, previous studies and information from the Internet. In this phase, the data will
be collected via individual interviews and some documents, which purpose to help to
explain the relationship among variables more precisely via personal story. The results
of the two methods will be integrated for the latter explanation of the research.

4.2 Questionnaire design

The questionnaire construct including two main parts: the first part includes five
inquiries for demographic information and the second part comprises the impacts of
service quality, customer trust and perceived risk on customer loyalty towards
transport service.

The statements in the questionnaire is clear and easy to understand, avoid making
respondents confused and bewildered. Besides, all the items in questionnaire are self-
designed by adapting from SERVQUAL scale and Gefen (2002).

These questions are designed as a clear statements expressing attitude toward the issue
with the five-point Likert Scale applied to judge the statement from (1) totally disagree;
(2) disagree, (3) neutral; (4) agree; (5) totally agree.

The final measurement scale for this study as follows.

19
 Table 4. 1: Measurement Scales

Item Description of statement References

Reliability REL1  Uber always provides punctual service TCRP
REL2  Uber always ensures fare accurately report 47,
REL3  Uber is always sincerely arranged for Washingto
customers’ problems n, D.C,
REL4  Uber ensures the promised quality during the 1999;

journey Zeithaml
and Bitner,
2000
Responsive RES1  Drivers always perform service promptly Bahram
ness and professionally Kheiry,
RES2  Drivers are always willing to help customers Maryam
 Uber can provide timely and efficient service Alirezapou
RES3  Drivers informs customers any changes of r (2012)

timetable in advance
RES4
Assurance ASS1  Drivers control taxi safely and carefully
ASS2  Drivers’ behavior and service style are
professional
ASS3  I feel safe during the journey
ASS4  I feel fulfilled with Uber’s fare
Empathy EM1  Drivers always looks after the best interests
of their customers
EM2  Uber company has operating hours
convenient to all their customers
EM3  Uber provides various forms of payment (in
cash or by credit card)
EM4  Uber taxis are present at many places being
ready to serve customers
Tangiblene TAN1  Uber taxis is new and modern Valerie A.
ss TAN2  The inside cars are clean and professional Zeithaml,
(seat, perfume, air-conditioner, …) and

20
 TAN3  Drivers are well-dressed and appear neat Leonard L.
TAN4  Uber have car options (UberX, UberBlack) Berry,
to fulfill customers’ needs Journal of
Marketing,
Fall 1985.
Customer CT1  I believe in the information which Uber Jarvepaa,
trust services provide Tractinsky
CT2  Uber has good will reputation to make me & Vitale,
feel comfortable using online payment (visa, 2000
sms banking, etc.)
CT3  I believe that the errors while using Uber
services rarely occur
CT4  I believe that advances in technology
security will protect me more while using
Uber services.
Perceived PR1  I totally feel secure about the safety when
risk using Uber taxis (careless checking drivers’
backgrounds, etc.)
PR2  I totally feel secure about qualification of
drivers
PR3  I totally feel secure about the accuracy of fare
 I totally feel secure that other people cannot
PR4 know my personal information concerning
my online payment
Customer CL1  I often mention about the advantages of Uber Nguyen
loyalty to other people and
CL2  I introduce Uber whenever there are Leblanc
someone mention about transport service (1991)
CL4  I suggest friends and family using Uber taxi
CL3  The first transportation I think about is Uber

21
4.3 Data collection
The primary data will be compiled from the target population who have used
Uber taxi. The respondents should have enough experience and knowledge to
understand the questionnaire. Moreover, with the diversity of place, the data will be
collected fairly. And the alumni, who can give us the particular comparison and
discussion, are also a source of respondents.

As this research describes the results obtained using questionnaire, we also

conduct a pilot study. A pilot study is a small-scale research done to collect data from
respondents similar to those to be employed in the full study. This pilot study which
usually consists of 10 respondents is essential as it leads to the identification of whether
respondents could understand and comprehend the given questions and vice versa
before conducting a full-scale study.

The questionnaire will be spread out by web-based form (via available email
and social network address) and paper form. Questionnaires were asked to 126
students in HCM National University. The others were conducted through the mail and
google survey to office staffs of such companies Phu Thai Group, Viet Tien Garment
Corporation, Owen Garment Company, and etc. Firstly, the pilot study result will go
through some analysis in SPSS, as Cronbach’s Alpha, EFA, to test the validity and
reliability of the scale. Then, the full-scale study begins, and in this phase, the collected
data will be handled by some further analysis by AMOS software besides the SPSS.

4.4 Data Analysis

In this study, the researcher use SPSS and AMOS 20 software to analyze data,
particularly:

SPSS (Statistical Package for the Social Science) is a computer application

that provides statistical analysis of data. The SPSS software will be used for:

Descriptive statistics: raw data after being collected through the survey is
transformed into meaningful information that describes the frequency, the measure of
tendency and dispersion.

Reliability test “Cronbach’s alpha is a reliability coefficient that indicates how

well the items in a set are positively correlated to one another. Cronbach’s alpha is

22
computed concerning of average intercorrelations among items measuring the
concepts.” (Canava, R. Y., Delahaye, B. L. & Sekaran, U., 2001).

Factor analysis: factor analysis looks at the way each respondent completed the
opinion items and then compares together. Finally, factor analysis comes up with the
suggestion that certain items are included in particular factors/clusters (Canaval et al.,
2001). It helps to find out the elements influencing customer loyalty to Internet service
provider in Ho Chi Minh City.

Structural Equation Modeling (SEM) requires two procedural steps.

Confirmatory factor analysis (CFA): was performed to confirm the factor

structure of the research model. The CFA procedure investigated the model’s goodness
of fit, the magnitude of the individual relationships, and the hypothesized paths.
Measures of fit that compensate for sample size were also considered, including the
goodness of fit index (GFI), adjusted goodness of fit index (AGFI), Normed fit index
(NFI), comparative fit index (CFI), root mean square error of approximation
(RMSEA).

23
 CHAPTER V: DATA ANALYSIS & RESEARCH RESULT

5.1 Sample Description

The main purpose of survey is to collect data with random samplings.
According to scales assessed via Exploratory Factor Analysis (EFA), the numbers of
observations is required to be at least five times the number of items (Hair et al.,
2006).

According to this formula, this study has 32 items, the appropriate sample size
for this given population would be about 120, and we will distribute 300 questionnaires
to this target population just in case some unsuitable responses exist.

After collecting and checking, some observations were found to have the same
answers or incomplete, so there are 301 samples to primary tests.

5.2 Demographic
Table 5. 1: Gender

Frequency Percent Valid Percent Cumulative Percent

Male 139 46,2 46,2 46,2
Female 162 53,8 53,8 100,0
Total 301 100,0 100,0

The sample is 301 people who has experience with Uber taxi, which has rate
of female higher than male.

Table 5. 2: Age

Frequency Percent Valid Percent Cumulative Percent

Under 18 44 14,6 14,6 14,6
18 - 23 170 56,5 56,5 71.1
23 - 28 62 20.6 20.6 91.7
28 - 33 14 4,7 4,7 96.3
Over 33 11 3,7 3,7 100,0
Total 301 100,0 100,0

24
 The result of the surveys about age has high percentage rate is medium-age
from 26 to 45, who have worked and require to travel a lot.

Table 5. 3: Job

Frequency Percent Valid Percent Cumulative Percent

Student 143 47,5 47,5 47,5
Officer staff 58 19,3 8,3 66,8
Housewife 25 8,3 8,3 75,1
Worker 14 4,7 4,7 79,7
Others 61 20,3 20,3 100,0
Total 301 100,0 100,0

According to the result, it show that there are high percentage belongs to
student and office staff, about 69.8% of the total sample.

Table 5. 4: Income

Frequency Percent Valid Cumulative

Percent Percent
Less than VND 3
112 37,2 37,2 37,2
millions
VND 3-8 millions 70 23,3 23,3 60,5
VND 8-13 millions 28 9,3 9,3 69,5
VND 13-18 millions 17 5,6 5,6 75,4
Over VND 18 millions 74 24,6 24,6 100,0
Total 301 100,0 100,0

Because of the domination of students and young people, the salary of

respondents is quite low, less than VND 3 million is 37.2 percent

Table 5. 5: Usage

Frequency Percent Valid Percent Cumulative Percent

Less than 1 times 104 34,6 34,6 34,6
1-3 times 139 46,2 46,2 80,7
Over 3 times 58 19,3 19,3 100,0
Total 301 100,0 100,0

Conclusion:

25
 From tables above, it is obvious to see over half of the sample is female
(53.8%). The most respondents are young and medium-aged people with more than
70%. Moreover, the majority of respondents are students and official staffs to wages
not so high salary, about 37.2% under VND 3 million. Lastly, the times respondents
use Uber per month is low, 34.6% less than 1 time and 46.2% use taxi 1-3 times.

5.3 Descriptive statistics

Descriptive statistics were carried out to demonstrate the attitudes of a data
collection in form of quantitative approach. In this test, mean and standard deviation
would be estimated to observe the central tendency and measure the dispersion.
Descriptive statistics measurement item are reported in Tables below, including
minimum, maximum, mean and standard deviation.

Table 5. 6: Descriptive Statistics

Item N Min Max Mean Std.
Deviation
REL Uber always provides punctual 301 1 5 3,08 ,970
service

Uber always ensures fare accurately 301 1 5 3,26 ,979

Uber is always sincerely arranged 301 1 5 3,03 ,943

for customers’ problems

Uber ensures the promised quality 301 1 5 3,12 ,959

during the journey
RES Drivers always perform service 301 1 5 3,76 ,967
promptly and professionally

Drivers are always willing to help 301 1 5 3,88 1,026

customers

Uber can provide timely and 301 1 5 3,75 ,921

efficient service

26
 Drivers informs customers any 301 1 5 3,74 ,917
changes of timetable in advance
ASS Drivers control taxi safely and 301 2 5 3,52 ,764
carefully

Drivers’ behavior and service style 301 1 5 3,80 ,826

are professional

I feel safe during the journey 301 2 5 3,66 ,773

I feel fulfilled with Uber’s fare 301 2 5 3,55 ,680

EM Drivers always looks after the best 301 1 5 3,74 1,131
interests of their customers

Uber company has operating hours 301 1 5 3,73 1,100

convenient to all their customers

Uber provides various forms of 301 1 5 3,57 ,955

payment (in cash or by credit card)

Uber taxis are present at many 301 1 5 3,87 1,091

places being ready to serve
customers

TAN Uber taxis is new and modern 301 1 5 3,60 ,949

The inside cars are clean and 301 1 5 3,04 ,828

professional (seat, perfume, air-
conditioner, …)
Drivers are well-dressed and appear 301 1 5 3,67 ,857
neat
Uber have car options (UberX, 301 1 5 3,66 ,948
UberBlack) to fulfill customers’
needs

CT I believe in the information which 301 1 5 3,71 ,820

Uber services provide

27
 Uber has good will reputation to 301 1 5 3,56 ,841
make me feel comfortable using
online payment (visa, sms banking,
etc.)
I believe that the errors while using 301 2 5 3,64 ,802
Uber services rarely occur
I believe that advances in 301 1 5 3,71 ,841
technology security will protect me
more while using Uber services
PR I totally feel secure about the safety 301 1 5 2.24 ,917
using Uber taxis (careless checking
drivers’ backgrounds, etc.)

I totally feel secure about 301 1 5 2.29 ,962

qualification of drivers

I totally feel secure about the 301 1 5 2.20 ,974

accuracy of fare

I totally feel secure that other 301 1 5 2.13 ,785

people cannot know my personal
information through online
payment

CL I often mention about the 301 1 5 3,78 ,696

advantages of Uber to other people

I introduce Uber whenever there are 301 2 5 3,84 ,723

someone mentions about transport
service

I suggest people around using Uber 301 2 5 3,82 ,720

taxi

The first transportation I think 301 2 5 3,81 ,734

about is Uber

28
 301
Valid N (listwise)

(Source: data)

Reliability

The mean of all six items are calculated at the average of 3.122 > 3.
Compare to other factors, the lowest value means that customers do not impress much
to the reliable quality when decide to use taxi, especially the item “Uber always ensures
fare accurately” when it reaches highest mean in reliability.

Responsiveness

This is one of the most important SERVQUAL’s dimension in influencing

customer loyalty (Angur et al., 1999) which is average mean of 3.782 higher than 3.
Since then, taxi users pay more attention to the responsiveness in drivers and
performance of service.

Assurance

The result shows that the average mean is high about 3.632 > 3. That implies
the necessary of creating safe feeling for passengers.

Empathy

The average mean of empathy is 3.727 > 3. It means that people who do the
survey have high expectation to the receiving benefits from the provider.

Tangibleness

With the average mean of 4 items in tangibleness factor is 3.492 > 3,

respondents have high requirement about the appearance and quality of cars.

Customer trust

In term of evaluating the customer trust, people tend to believe in the

stability and safe of modern technology with the average mean of 3.655 > 3.

Perceived risk

29
 The result of average mean is high, 2.215 < 3. Despite of new and modern
technology of Uber, customers are still concern about the drivers’ background and
disadvantages of taxi Uber.

Customer loyalty

Being the goal of this research, customer loyalty’s average mean is the
highest 3.812 > 3. Therefore, increasing customer loyalty is significantly important.

5.4 Reliability Test

Regarding to the purpose of this study, internal consistency reliability would
be tested to assess the consistent performance among items. Reliability of the scale
which was used for measuring eight contexts in the proposed model would be
conducted to measure the consistency through Cronbach’ alpha coefficients. A
Cronbach’ alpha score over 0.6 and the item to-total correlation greater than 0.5 is
generally acceptable by many experts. In addition, if a value less than 0.3, it means
that item is measuring differently from the scale (Field, 2005). Lemmens (2010)
showed that the value “Cronbach’s alpha if item deleted” measures the effects of
removing item from scale. The item which Cronbach’s alpha if item deleted larger than
the Cronbach’s alpha and corrected item-total correlation less than 0.3 will be
discarded from variables list.

Table 5. 7: Cronbach's Alpha of Variables

Before removing inappropriate After removing inappropriate

items items
Construct Cronbac Correcte Cronbac Cronbac Correcte Cronbac
h’s d Item- h's Alpha h’s d Item- h's Alpha
Alpha Total if Item Alpha Total if Item
Correlati Deleted Correlati Deleted
on on

Reliability ,861 ,861

REL1 ,704 ,824 ,704 ,824
REL2 ,681 ,833 ,681 ,833
REL3 ,713 ,820 ,713 ,820

30
REL4 ,730 ,813 ,730 ,813
Responsiven ,909 ,909
ess
RES1 ,811 ,876 ,811 ,876
RES2 ,805 ,880 ,805 ,880
RES3 ,771 ,891 ,771 ,891
RES4 ,795 ,883 ,795 ,883
Assurance ,671 ,776
ASS1 ,563 ,527 ASS4 ,614 ,697
ASS2 ,582 ,507 was ,605 ,708
ASS3 ,567 ,523 removed ,619 ,690
ASS4 ,133 ,776
Empathy ,727 ,876
EM1 ,704 ,542 EM3 was ,779 ,809
EM2 ,711 ,541 removed ,746 ,840
EM3 ,059 ,876 ,761 ,826
EM4 ,677 ,565
Tangiblenes ,614 ,802
s
TAN1 ,574 ,390 TAN2 ,641 ,737
TAN2 -,043 ,802 was ,634 ,746
TAN3 ,526 ,446 removed ,672 ,704
TAN4 ,615 ,353
Customer ,861 ,861
trust
CT1 ,742 ,809 ,742 ,809
CT2 ,680 ,835 ,680 ,835
CT3 ,698 ,827 ,698 ,827
CT4 ,713 ,821 ,713 ,821
Perceived ,742 ,853
risk
PR1 ,685 ,594 PR4 was ,692 ,825
PR2 ,650 ,613 removed ,723 ,796

31
 PR3 ,702 ,577 ,760 ,760
PR4 ,152 ,853
Customer ,835 ,835
loyalty
CL1 ,589 ,823 ,589 ,823
CL2 ,629 ,807 ,629 ,807
CL3 ,741 ,756 ,741 ,756
CL4 ,703 ,774 ,703 ,774

Reliability

Cronbach’s alpha of reliability is 0.861, which is very good. In addition,

Corrected Item-Total Correlation were greater than 0.3 and there were no item which
can increase the Cronbach’s alpha if deleted

Responsiveness

Reliability analysis for responsiveness show that four items have high
correlation of over 0.5 with Cronbach’s alpha is 0.909, with all items also had
Corrected Item-Total Correlations that were higher than 0.3 and there were no
“Cronbach’s alpha if deleted”
Assurance

With the reliability test assurance, Cronbach’s alpha is 0.671 < 0.7, which is
unacceptable internal consistency reliability. Moreover, factor ASS4 has an
insufficient item to total correlation; therefore, ASS4 should be eliminated from the
questionnaire. After removing ASS4, the Cronbach’s alpha of assurance is better with
0.776 and three items remain

Empathy

The result of Cronbach’s alpha after testing empathy is acceptable with 0.727.
However, the Corrected Item-Total Correlation of EM3 is not satisfying the standard
level. Consequently, the empathy scale is reliable with 0.876 when item EM3 deleted.

Tangibleness

32
 The Cronbach’s alpha after testing tangibleness was 0.614 with Corrected
Item-Total Correlations of TAN2 is insufficient to the standard level and have to be
removed. Thereafter, the Cronbach’s alpha of tangibleness goes up to 0.802 which is
very good for this construct.

Customer trust

In the dimension of trust, the Cronbach’s alpha is relatively good with 0.861.
Moreover, there are no items have Corrected Item-Total Correlation less than 0.3 and
no item which can increase the total Cronbach’s alpha if deleted. Therefore, all items
of CTs are retained

Perceived risk

In term of perceived risk, although the Cronbach’s alpha surpasses the

acceptable level, the item PR4 still have to be removed because of low Corrected Item-
Total Correlations. Accordingly, the Cronbach’s alpha of perceived risk increase to
0.853 with item PR4 deleted

Customer loyalty

The test of reliability was conducted for the overall Cronbach’s alpha of
customer loyalty from CL1 to CL4 is 0.835, which is very good. In addition, Corrected
Item-Total Correlations of all measurements items are over 0.3, then items of CL are
retained all for EFA.

5.5 Exploratory Factor Analysis (EFA):

Exploratory Factor Analysis is a statistical approach including two important

criteria: Kaiser-Meyer-Olkin (KMO) and Bartlett’s Test. EFA is applied to determine
the correlation among the variables in dataset through reducing inappropriate variables
and establishing a variable structure. In Bartlett’s test, the null hypothesis is rejected
if significant level is lower than 0.05 (Othman & Owen, 2000). In other hand, the factor
analysis only be conducted if value of KMO in range of 0.5 and 1 (Hoang & Chu,
2005). In term of factor loading, Hair, Anderson, Tatham & Black in 1998 stated that
factor loadings is significant if value is 0.5 or greater. Moreover, total variance
explained need to be over 50 percent (Gerbing and Anderson, 1988).

33
 Table 5. 8: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. ,895
Bartlett's Test of Approx. Chi-Square 4556,624
Sphericity df 378
Sig. 0,000

Table 5. 9: Total Variance Explained

Rotation Sums of
Extraction Sums of Squared Loadings Squared Loadings
Total % of Variance Cumulative % Total
8,572 30,613 30,613 5,010
2,225 7,948 38,560 4,120
1,784 6,370 44,931 5,464
1,601 5,719 50,650 4,228
1,194 4,266 54,916 6,132
,894 3,193 58,108 4,816
,799 2,854 60,963 5,416
,720 2,573 63,536 3,115

Extraction Method: Principal Axis Factoring.

Table 5. 10: Pattern Matrix

Factor
1 2 3 4 5 6 7 8
RES1 ,871
RES2 ,868
RES4 ,829
RES3 ,815
REL4 ,828
REL3 ,795
REL1 ,780
REL2 ,717
CL3 ,881
CL4 ,781
CL2 ,612
34
 CL1 ,601
EM1 ,905
EM4 ,817
EM2 ,795
CT4 ,818
CT2 ,786
CT1 ,777
CT3 ,625
TAN4 ,769
TAN3 ,768
TAN1 ,717
PR3 ,902
PR2 ,749
PR1 ,702
ASS3 ,747
ASS2 ,738
ASS1 ,723
Extraction Method: Principal Axis Factoring.
Rotation Method: Promax with Kaiser Normalization.
a. Rotation converged in 7 iterations.

Based on the results in Table 5.8, KMO is equal to 0.895 which is very good
for testing the partial correlation among variables. Moreover, the significant level of
Barlett’s test is 0.000., which is good to support the factorability of correlation
matrix.
In table Total Variance Explained, the result is that there were 8 components
extracted with the Rotation Sums of Squared Loadings with cumulative value is
63.536% > 50%, which showed that these factor explained 63.536 percent of data
variance.
Based on the table, it is obvious that 28 items were grouped into eight
components because all the variables have cross-factor loading are over the
satisfactory level (0.5).

5.6 Structural Equation Modeling (SEM)

Structural Equation Modeling (SEM) is statistical models that based on various
assumptions as normal distributions of data and consistency of measurements by
estimating simultaneously all the relationship equations.

35
 In addition, this study conducts SEM with second-order factor is service quality
that constructed by variables reliability, responsiveness, assurance, empathy and
tangibleness.

The procedural processes of SEM includes evaluation of Confirmatory Factor

Analysis (CFA) and testing the fit of the full model.

Table 5. 11: Appropriate measure

Fit index Threshold

Chi-square/df <= 3
Level of significance of chi-square (P) <= 0.05
Goodness of Fit Index (GFI) >= 0.9
Adjusted goodness of fit index (AGFI) > 0.08
Comparative fit index (CFI) >= 0.9
Turker-Lewis Index (TLI) >= 0.9
Root mean squared errer of approximation (RMSEA) <= 0.05
Source: Hair et al.(1998,2010), Browne and Cudeck (1993), Steiger (1978),
Seagar (1995), Hu and Bentler (1999)

5.7 Confirmatory Factor Analysis (CFA)

Confirmatory Factor Analysis (CFA) conducted to assess the measurement
model by simultaneous equation model to test whether the consistence between
measures of a construct to test whether there are consistence between measuring
construct and researcher’s understanding of the incidental happening construct. The
purpose of this analysis is to test whether the data fits the hypothesized measurement
model.

Table 5. 12: Summary of CFA results

Measurement Before modification After medication indices

indices test test
Chi-square 362.286 348.731
Degree of freedom (df) 322 321
Chi-square/df 1.125 < 3 1.086 < 3
Level of significance of 0.06 > 0.05 0.138 > 0.05
chi-square (P)
Goodness of Fit Index 0.922 > 0.9 0.925 > 0.9
(GFI)

36
 Comparative fit index 0.991 > 0.9 0.994 > 0.9
(CFI)
Turker-Lewis Index (TLI) 0.989 > 0.9 0.992 > 0.9
Root mean squared errer 0.020 < 0.05 0.017 < 0.05
of approximation
(RMSEA)

There are eight variables and a total of 28 indicators were used to conduct CFA.
Following this analysis, Modification Indices are testing and co-variances are
examined if the modified model can result in better fit. After establishing covariance
between errors (which modification indicates more than 7) and conducting second
CFA test, the result is better with six indices used to evaluate model fits are all
qualified. This proved that the measurement model is very good in fitting with the data.
In conclusion, after testing the second CFA, the measurement model meets criteria for
convergent validity as well as the result cannot be much better.

5.8 Reliability and validity

5.8.1 Reliability
Internal consistency reliability test is to ensure whether Cronbach’s alpha value
is higher than 0.6. As measured in Table 5.7, the Cronbach’s alpha value of eight
variables range from 0.776 to 0.909 which is all acceptable.

The construct reliability based on table 5.15, all composite reliability (CR) of
eight contexts are higher than 0.7 with acceptable study that fluctuate between 0.777
and 0.91, which is satisfied the standard level to ensure the reliability with
Cronbach’s alpha criteria.

Item reliability indication an item is reliable if the standardized loading value

is greater than 0.7 (Chin, et al. 1995)

Table 5. 13: Regression Weights

Estimate S.E. C.R. P Label

RES1 <--- RES 1,000
RES2 <--- RES 1,047 ,056 18,740 ***
RES4 <--- RES ,931 ,049 18,934 ***
RES3 <--- RES ,894 ,052 17,300 ***
REL4 <--- REL 1,000

37
 Estimate S.E. C.R. P Label
REL3 <--- REL 1,061 ,078 13,539 ***
REL1 <--- REL ,973 ,071 13,627 ***
REL2 <--- REL 1,055 ,082 12,936 ***
CL3 <--- CL 1,000
CL4 <--- CL ,974 ,067 14,556 ***
CL2 <--- CL ,873 ,067 12,943 ***
CL1 <--- CL ,771 ,065 11,780 ***
EM1 <--- EM 1,000
EM4 <--- EM ,958 ,058 16,596 ***
EM2 <--- EM ,933 ,058 16,136 ***
CT4 <--- CT 1,000
CT2 <--- CT ,948 ,074 12,735 ***
CT1 <--- CT 1,052 ,073 14,434 ***
CT3 <--- CT ,992 ,073 13,645 ***
TAN4 <--- TAN 1,000
TAN3 <--- TAN ,825 ,070 11,747 ***
TAN1 <--- TAN ,937 ,079 11,898 ***
PR3 <--- PR 1,000
PR2 <--- PR ,936 ,060 15,701 ***
PR1 <--- PR ,855 ,058 14,684 ***
ASS3 <--- ASS 1,000
ASS2 <--- ASS 1,047 ,104 10,079 ***
ASS1 <--- ASS ,982 ,096 10,218 ***

Table 5. 14: Standardized Regression Weights

Estimate
RES1 <--- RES ,867
RES2 <--- RES ,855
RES4 <--- RES ,850
RES3 <--- RES ,814
REL4 <--- REL ,779
REL3 <--- REL ,841
REL1 <--- REL ,750
REL2 <--- REL ,806
CL3 <--- CL ,828
CL4 <--- CL ,791
CL2 <--- CL ,720
CL1 <--- CL ,661
EM1 <--- EM ,852
EM4 <--- EM ,846
EM2 <--- EM ,818
CT4 <--- CT ,767
CT2 <--- CT ,726

38
 Estimate
CT1 <--- CT ,827
CT3 <--- CT ,797
TAN4 <--- TAN ,799
TAN3 <--- TAN ,730
TAN1 <--- TAN ,748
PR3 <--- PR ,855
PR2 <--- PR ,810
PR1 <--- PR ,776
ASS3 <--- ASS ,740
ASS2 <--- ASS ,725
ASS1 <--- ASS ,735

Based on the above table, it can be clearly seen that all factors loading were
statically significant (p < .001). Moreover, all standardizing load values are all over
than 0.5, which shows that currently all items are acceptable for further analyzing.

5.8.2 Convergent validity

Convergent validity relates to the homogeneity and the contexts including
standardized factor loading and average variance extracted (AVE). First, Hair et al.
(2006) argued that scale is convergent valid when all items have loadings over 0.5. In
short, all variables were grouped in term of CFA in order to be evidence of convergent
validity. In this study, values based on table 5.13 are higher than 0.5, and AVE in table
5.15 shows that results ranged from 0.538 to 0.663 > 0.5 and lower than Composite
reliability (CR). It is obvious that all observed variables ensure validity of the
measurement.

Table 5. 15: Convergent and discriminant validity and correlation matrix

Max
CR AVE MSV R(H) PR RES REL CL EM CT TAN ASS
PR 0,855 0,663 0,417 0,860 0,814
RES 0,910 0,717 0,274 0,943 0,347 0,847
REL 0,873 0,632 0,165 0,959 0,293 0,383 0,795
CL 0,839 0,567 0,417 0,967 0,646 0,396 0,368 0,753
EM 0,877 0,704 0,305 0,973 0,447 0,275 0,212 0,318 0,839
CT 0,861 0,609 0,348 0,977 0,590 0,523 0,406 0,562 0,552 0,780
TAN 0,803 0,577 0,325 0,979 0,558 0,402 0,298 0,519 0,403 0,570 0,760
ASS 0,777 0,538 0,199 0,981 0,419 0,208 0,183 0,446 0,232 0,300 0,255 0,733

39
 5.8.3 Discriminant Validity
Regarding examining discriminant validity, table 5.15 indicated that all MSV
and ASV are less than values of AVE, and all square root of AVE are greater than
inter-construct correlations. Therefore, the criteria of discriminant validity has been
met.
5.9 SEM analysis
After CFA confirmed that the model is realiable and valid, conducting the
SEM for the full model including measurement model and structural model is the
next step. Similar to several fit indices, the competence of the model was measured
by analyzing the chi-square value. According to a rule of thumb, if chi-square value
is less than 3, various model fit indices (e.g., CFI, TLI, GFI and RMSEA) will be
judged for the fit of the model. In the same way of evaluating CFA, goodness-of-fit
criteria of SEM were regarded with data from the survey to evaluate whether SEM
fits with data: chi-square/df < 5 (n > 200) or chi-square/df < 3 (n < 200), CFI, TLI
and GFI is range from 0.9 to 1 and RMSEA < 0.08.

The first analysis was conducted with eight variables (reliability,

responsiveness, assurance, empathy, tangibleness, customer trust, perceived risk and
customer loyalty and 28 indicators defined from the previous CFA. According to the
result, the overall result of SEM was very good with: chi-square = 409.211, df = 339
chi-square/df = 1.207 < 3, CFI = 0.984 > 0.9, TLI = 0.982 > 0.9, GFI = 0.913 > 0.9,
RMSEA = 0.026 < 0.08.

However, the relationship between customer trust and customer loyalty is

rejected because of the significant level is 0.228 > 0.5. Therefore, the second analysis
was conducted with the path from customer trust to customer loyalty removed. The
result are: chi-square = 411.918, df = 340, chi-square/df = 1.212 < 3, GFI = 0.913 >
0.9, TLI = 0.982 > 0.9, CFI = 0.983 > 0.9 and RMSEA = 0.027 < 0.08. In summary,
goodness-of-fit was met that proved SEM model was fit with data.

5.10 Testing the Hypotheses

In this section, the result of the hypothesis are summarized with discussion of
the results contained in the next chapter. This test indicates the sign of the coefficient
whether two variables are moving the same or opposite direction.

40
 Table 5. 16: P-value used for testing the hypotheses

Estimate S.E. C.R. P Label

Service
Customer trust <--- 1.148 .145 7.896 ***
quality

Customer
Perceived risk <--- -.821 .088 -9.361 ***
trust

Service
Responsiveness <--- 1.000
quality

Service
Reliability <--- .721 .120 6.014 ***
quality

Customer Service
<--- .487 .106 4.583 ***
loyalty quality

Service
Empathy <--- 1.117 .166 6.718 ***
quality

Service
Tangibleness <--- 1.028 .143 7.209 ***
quality

Service
Assurance <--- .456 .095 4.785 ***
quality

Customer Perceived
<--- -.275 .055 -5.012 ***
loyalty risk

RES1 <--- RES 1.000

RES2 <--- RES 1.049 .056 18.751 ***

RES4 <--- RES .930 .049 18.874 ***

RES3 <--- RES .897 .052 17.314 ***

REL4 <--- REL 1.000

REL3 <--- REL 1.062 .079 13.450 ***

REL1 <--- REL .970 .071 13.606 ***

REL2 <--- REL 1.054 .082 12.830 ***

CL3 <--- CL 1.000

CL4 <--- CL .985 .068 14.495 ***

CL2 <--- CL .877 .068 12.866 ***

CL1 <--- CL .778 .066 11.746 ***

41
 Estimate S.E. C.R. P Label

EM1 <--- EM 1.000

EM4 <--- EM .951 .057 16.607 ***

EM2 <--- EM .936 .058 16.130 ***

CT4 <--- CT 1.000

CT2 <--- CT .942 .074 12.669 ***

CT1 <--- CT 1.046 .072 14.426 ***

CT3 <--- CT .985 .072 13.652 ***

TAN4 <--- TAN 1.000

TAN3 <--- TAN .829 .071 11.687 ***

TAN1 <--- TAN .938 .080 11.793 ***

PR3 <--- PR 1.000

PR2 <--- PR .921 .059 15.505 ***

PR1 <--- PR .833 .057 14.535 ***

ASS3 <--- ASS 1.000

ASS2 <--- ASS 1.044 .106 9.838 ***

ASS1 <--- ASS .965 .096 10.052 ***

Estimate: Standard path coefficient

S.E: Standard error
C.R: Critical ratio (t-value)

: (Group number 1 - Default model)

Table 5. 17: Standardized Regression Weights (SEM analysis)

Estimate

CT <--- SQ .912

PR <--- CT -.629

RES <--- SQ .585

42
 Estimate

REL <--- SQ .476

EM <--- SQ .565

TAN <--- SQ .666

ASS <--- SQ .398

CL <--- SQ .883

CL <--- CT -.471

CL <--- PR -.405

RES1 <--- RES .866

RES2 <--- RES .856

RES4 <--- RES .848

RES3 <--- RES .815

REL4 <--- REL .780

REL3 <--- REL .842

REL1 <--- REL .748

REL2 <--- REL .806

CL3 <--- CL .822

CL4 <--- CL .791

CL2 <--- CL .715

CL1 <--- CL .657

EM1 <--- EM .853

EM4 <--- EM .842

EM2 <--- EM .822

CT4 <--- CT .763

CT2 <--- CT .720

CT1 <--- CT .821

CT3 <--- CT .793

TAN4 <--- TAN .799

43
 Estimate

TAN3 <--- TAN .731

TAN1 <--- TAN .747

PR3 <--- PR .867

PR2 <--- PR .807

PR1 <--- PR .766

ASS3 <--- ASS .745

ASS2 <--- ASS .726

ASS1 <--- ASS .728

In summary, one of eight hypotheses is rejected and the seven remaining are
supported from structural equation modeling results. The table below shows the results
of all hypotheses testing:

Table 5. 18: Result of Hypotheses Testing

First SEM Analysis Second SEM Analysis

Hypotheses Path t- p- Structura Path t- p-

estim value value l estima value valu
ate Equation te e
Modeling
H1: Service 0.883 7.702 0.037 Supported 0.412 4.583 ***
quality has a *
positive impact
on customer
loyalty
H2: Service 0.912 2.087 *** Supported 0.889 7.896 ***
quality has a
positive impact
on customer trust
H3: Customer -0.471 -1.206 0.228 Rejected
trust has a
positive impact
on customer
loyalty
H4: Customer -0.629 -9.398 *** Supported -0.627 -9.361 ***
trust has a
negative impact
on perceived risk

44
 H5: Perceived -0.405 -5.117 *** Supported -0.394 -5.012 ***
risk has a
negative impact
on customer
loyalty
***p < 0.001, **p < 0.01, *p < 0.05
As shown in Table 5.17, it could be seen that the results of the final model
reject the path between customer trust and customer loyalty when the p-value of
hypothesis 3 is over 0.05. Difference from proposed model of Gefen (2002), customer
loyalty is not effected directly from customer trust. Discusses about the results of
hypotheses below.

First of all, hypotheses of service quality has strong positive impact on

customer loyalty is supported, which means that this study corroborates with empirical
researches (e.g., Parasuraman 1985; Ananth et al. 2011; Zeihaml et al. 1996).
Accordingly, it is significantly proved that there is a directly positive relationship
between service quality and customer loyalty with standardized coefficient = 0.412 at
the 0.001 level of significant.. Therefore, it can be concluded that when a customer
receives good quality of service, he/she tend to return and repurchase again due to the
increased loyalty. In term of relationship with customer trust, service quality is
proposed by hypotheses 2 also have a strong positive effect on the trustful levels of
customers at 0.889 at the 0.001 level. Therefore, this hypotheses also echoes the
finding of prior studies (e.g., Reichheld and Schefter 2000, Parasuraman 2000), which
stated that providers can build up trustful levels through fully responding customers’
expectation. In order words, it is concluded that the higher quality of service customers
receive, the higher customer trust achieved.

On the other hand, contrary to the proposed model of Gefen (2002) argued that
customer loyalty can be increased by service quality directly through customer trust in
e-commerce section, hypotheses 3 proposes that the relationship between customer
trust and customer loyalty is rejected because its p-value equal to 0.228 > 0.05. One
explanation for this could be in the market of Vietnam, the trustful level among
customers is not much high, which caused by the fear of being taken advantages of
among Vietnamese people, especially when there are many news about inappropriate
behaviors of taxi drivers. In term of relationship with perceived risk, customer trust is
supported to have a negative impact on risk perception with highly significant

45
standardized coefficient -0.627 and at the 0.001 level of significant, which is also
corroborates with findings previous study (Reichheld and Schefter 2000, Mayer et al.
1995). That is to say, the customer trust still impact on customer loyalty through
mediating perceived risk through the negative influencing of perceived risk on
customer loyalty with standardized coefficient -0.394 at significant 0.001.

Besides the testing of direct effects, SEM can be applied to test whether the
customer trust’s indirectly impact on customer loyalty was supported if flow only
through perceived risk. The result of this indirect standardized coefficient is 0.247.

Figure 4: SEM result

46
 CHAPTER VI: CONCLUSION & IMPLICATION

6.1 Conclusion
The purpose of this study investigated the relationship between service
quality, customer trust, perceived and customer loyalty. The model in this research is
modified from the model of David Gefen in Journal of the Association for
Information System (Volume 3, 2002) about the customer loyalty in e-commerce.

According to Gefen (2002), three factors affect customer loyalty included:

service quality, customer trust, perceived risk and switching cost. However, because
of the characteristics of transport service and the popularity of taxi booking app, the
switching cost for using Uber taxi is not high. Therefore, the model of Gefen (2002)
would be modified with the eliminated switching cost.

Besides, the service quality was created by five SERVQUAL dimensions

which are reliability, responsiveness, assurance, empathy, and tangibleness. As well
as the theory of Gefen (2002), service quality has a substantial positive impact on
both customer loyalty and trust. Which implied that when value that customers
receiving meets their expectation, they will have more certaintly trust in that service,
which leads to be loyal to the company. This relationship not only benefits for
businesses in getting patronage from consumers, but users also get advantages
through the improving of service quality.

Contrary to study of Gefen (2002) argued that customer loyalty would be

increased both directly and indirectly from customer trust, the relationship between
customer trust and customer loyalty is rejected in this research. One explanation is
that the customers did not grade the trustful factors highly affects their loyalty in
purchasing due to the difference in the context as well as in the other industry at
different point of view. Besides, customer trust still has the impact on customer
loyalty indirectly through reducing the perceived risk, which was proved to have the
negative influence on customer loyalty. In other words, the uncertainty or
unaffordable service will cause customers concern and stop purchasing that also
reduce the loyalty among clients. This result fits anterior commitments of Ganesanin

47
(1994) that trust affects long-term orientation by decreasing perceived risk of
customers.

6.2 Implications
The theoretical purpose of this study is to make an effort by applying the model
in e-commerce of Gefen (2002) to the transport industry to discover whether there are
relationships between service quality, customer trust, and perceived risk and theirs
influences on customer loyalty. In this regard, the study examines how important
service quality and customer trust are for overall transport generally and Uber
particularlly.

According to Reichheld and Sasser (1990), it is more advisable and less costly
to concentrate on creating with loyal customers a trust-based relationship more than
spend efforts on gaining new customers. However, there are many dimensions in
service quality for providers to find and increase them. As the result, this study also
suggests guidelines that the most important dimensions of service quality from high to
low are tangibleness, empathy, reliability, responsiveness, and assurance.

The current study also indicated two aspects of trust: whether it impacts
directly to customer loyalty or whether this is done indirectly through perceived risk.
Because of the difference in industry and point of view, the relationship between
customer trust and loyalty is rejected in this study, which might imply that Vietnamese
passengers tend not to trust to the providers without a low perceived risk.

6.3 Recommendation
This research confirmed once again the role of service quality towards the
loyalty of customers. Therefore, in order to increase customer loyalty, Uber should
pay more attention to their service quality. Among the attitudes of service quality, the
high to low impact are tangibleness, empathy, reliability, responsiveness and
assurance.

Tangiblenes

The car quality should be assessed equally to the service. As reported in this
research, appearance is the most important competitive advantages of Uber. Because
of their various types of car, Uber service can be valued as a tangible expression of
consumers’ lifestyles through luxurious UberBlack. Therefore, Uber need to keep

48
observing and updating the quality of cars not for outlook only, but also for the
experience of clients.

Empathy and Assurance:

Besides the quality of cars, Uber should pay more attention to their quantity.
The reason is that Uber currently converge essentially in HCM or HN City and
ignore the potential market in other cities, which could be a loss for Uber.
Accordingly, it is necessary for Uber to collect customers’ ideas for expanding their
operating area.

Although the strategy “surge pricing” that the fare increases during rush
hours is an elusive situation, Uber should make the surge pricing as a true live
auction by let the passengers decide how much they are willing to pay, and Uber can
provides an estimate of how much waiting time that will give them. In other words,
Uber should give customer a choice – have a queuing time for an available car or a
surge price to jump the queue.

Reliability

At the heart of any operations and logistics companies, one of the key
components of their success is optimizing for speed pickup and speed of route. There
are many inconveniences of pickup speed not only for customers, but also for the
drivers. Be more specific, during driving passenger to destination, the drivers must
mark as dropped off in app, after that they have to ride around to find other
passengers for another circle. The recommendation here is that the drivers should be
told the next pickup while they are working in order to reduce the waiting time.

Responsiveness

While the initial magic of Uber was the ability to summon a cab in minutes,
at this point, it is convenient for loyal customers but not for non-users. There are a
number of times that customers need to book in advance for a meeting or the airport.
By developing Uber for a taxi booking app, which may sync with smartphone
calendar and let people choose when they would like to advance book trips for, Uber
will be more operationally efficient.

Besides the impact of service quality, customer loyalty also has influence
from perceived risk. The uncertain possibilities and affordable price cause customers
49
to search more information about the service. However, Uber has faced many flawed
news because of the relationship between domestic taxi companies and media, which
would affect adversely to their loyal customers. Therefore, one solution is that Uber
should focus on goodwill marketing and loyalty programs such as a discount on
surge or a free airport ride if passengers hit 20 rides in one month.

6.4 Limitation
Firstly, the major limitation of this study is that data were collected relating to
only one well-known taxi company, which may skwed the results with the rejecting
of the path from customer trust to customer loyalty.

Secondly, almost respondents in two area Vietnam National Universities and

garments companies. Moreover, I spend most of the time to collect online-surveys.
Therefore, the data cannot be generally in Ho Chi Minh City.

Finally, there are many newbies had few experience in using Uber and they
might not use all provided service such as UberBlack. Besides, because of the
difference in knowledge and education, some surveys were not done as well as their
thought.

50
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52
 APPENDICES
Appendix A

Result of Cronbach’s Alpha Test

Reliability (REL)

Case Processing Summary

N %
Valid 301 100,0
Cases Excludeda 0 ,0
Total 301 100,0
a. Listwise deletion based on all
variables in the procedure.

Reliability Statistics
Cronbach's N of
Alpha Items
,861 4

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
REL1 301 1 5 3,08 ,970
REL2 301 1 5 3,26 ,979
REL3 301 1 5 3,03 ,943
REL4 301 1 5 3,12 ,959
Valid N
301
(listwise)

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
REL1 9,41 6,135 ,704 ,824
REL2 9,23 6,184 ,681 ,833
REL3 9,46 6,215 ,713 ,820
REL4 9,37 6,086 ,730 ,813

Responsiveness

Case Processing Summary

53
 N %
Valid 301 100,0
Cases Excludeda 0 ,0
Total 301 100,0
a. Listwise deletion based on all
variables in the procedure.

Reliability Statistics
Cronbach's N of
Alpha Items
,909 4

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
RES1 301 1 5 3,76 ,967
RES2 301 1 5 3,88 1,026
RES3 301 1 5 3,75 ,921
RES4 301 1 5 3,74 ,917
Valid N
301
(listwise)

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
RES1 11,37 6,594 ,811 ,876
RES2 11,25 6,343 ,805 ,880
RES3 11,38 6,964 ,771 ,891
RES4 11,40 6,887 ,795 ,883

Assurance

Case Processing Summary

N %
Valid 301 100,0
Cases Excludeda 0 ,0
Total 301 100,0

54
a. Listwise deletion based on all
variables in the procedure.

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
ASS1 301 2 5 3,52 ,764
ASS2 301 1 5 3,80 ,826
ASS3 301 2 5 3,66 ,773
ASS4x 301 2 5 3,55 ,680
Valid N
301
(listwise)

Reliability Statistics
Cronbach's N of
Alpha Items
,671 4

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
ASS1 11,01 2,683 ,563 ,527
ASS2 10,74 2,481 ,582 ,507
ASS3 10,87 2,653 ,567 ,523
ASS4
10,99 3,860 ,133 ,776
x

Assurance (removed ASS4)

Reliability Statistics
Cronbach's N of
Alpha Items
,776 3

Item-Total Statistics

55
 Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
ASS1 7,46 1,963 ,614 ,697
ASS2 7,19 1,827 ,605 ,708
ASS3 7,32 1,932 ,619 ,690

Empathy

Case Processing Summary

N %
Valid 301 100,0
Cases Excludeda 0 ,0
Total 301 100,0
a. Listwise deletion based on all
variables in the procedure.

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
EM1 301 1 5 3,74 1,131
EM2 301 1 5 3,73 1,100
EM3x 301 1 5 3,57 ,955
EM4 301 1 5 3,87 1,091
Valid N
301
(listwise)

Reliability Statistics
Cronbach's N of
Alpha Items
,727 4

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
EM1 11,17 5,190 ,704 ,542
EM2 11,18 5,290 ,711 ,541
56
EM3
11,35 8,854 ,059 ,876
x
EM4 11,04 5,458 ,677 ,565

Empathu (removed EM3)

Reliability Statistics
Cronbach's N of
Alpha Items
,876 3

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
EM1 7,60 4,033 ,779 ,809
EM2 7,61 4,258 ,746 ,840
EM4 7,47 4,243 ,761 ,826

Tangibleness

Case Processing Summary

N %
Valid 301 100,0
Cases Excludeda 0 ,0
Total 301 100,0
a. Listwise deletion based on all
variables in the procedure.

Reliability Statistics

Cronbach's N of
Alpha Items
,614 4

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation

57
TAN1 301 1 5 3,60 ,949
TAN2x 301 1 5 3,04 ,828
TAN3 301 1 5 3,67 ,857
TAN4 301 1 5 3,66 ,948
Valid N
301
(listwise)

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
TAN1 10,37 3,134 ,574 ,390
TAN2
10,93 5,448 -,043 ,802
x
TAN3 10,30 3,536 ,526 ,446
TAN4 10,31 3,034 ,615 ,353

Tangibless (removed TAN2)

Reliability Statistics
Cronbach's N of
Alpha Items
,802 3

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
TAN
7,33 2,588 ,641 ,737
1
TAN
7,26 2,871 ,634 ,746
3
TAN
7,27 2,524 ,672 ,704
4

Customer trust (CT)

Case Processing Summary

58
 N %
Valid 301 100,0
Cases Excludeda 0 ,0
Total 301 100,0
a. Listwise deletion based on all
variables in the procedure.

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
CT1 301 1 5 3,71 ,820
CT2 301 1 5 3,56 ,841
CT3 301 2 5 3,64 ,802
CT4 301 1 5 3,71 ,841
Valid N
301
(listwise)

Reliability Statistics
Cronbach's N of
Alpha Items
,861 4

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
CT1 10,91 4,469 ,742 ,809
CT2 11,06 4,566 ,680 ,835
CT3 10,98 4,656 ,698 ,827
CT4 10,91 4,473 ,713 ,821

Perceived risk (PR)

Case Processing Summary

N %
Valid 301 100,0
Cases
Excludeda 0 ,0

59
 Total 301 100,0
a. Listwise deletion based on all
variables in the procedure.

Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
PR1 301 1 5 2.24 .917
PR2 301 1 5 2.29 .962
PR3 301 1 5 2.20 .974
PR4x 301 1 5 2.13 .785
Valid N
301
(listwise)

Reliability Statistics
Cronbach's N of
Alpha Items
,742 4

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
PR1 11,38 4,122 ,685 ,594
PR2 11,43 4,066 ,650 ,613
PR3 11,34 3,873 ,702 ,577
PR4x 11,27 6,299 ,152 ,853

Perceived risk (removed PR4)

Reliability Statistics
Cronbach's N of
Alpha Items
,853 3

Item-Total Statistics

60
 Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
PR1 7,51 3,191 ,692 ,825
PR2 7,56 2,974 ,723 ,796
PR3 7,48 2,850 ,760 ,760

Customer loyalty (CL)

Case Processing Summary

N %
Valid 301 100,0
Cases Excludeda 0 ,0
Total 301 100,0
a. Listwise deletion based on all
variables in the procedure.
Descriptive Statistics
N Minimu Maximu Mean Std.
m m Deviation
CL1 301 1 5 3,78 ,696
CL2 301 2 5 3,84 ,723
CL3 301 2 5 3,82 ,720
CL4 301 2 5 3,81 ,734
Valid N
301
(listwise)

Reliability Statistics
Cronbach's N of
Alpha Items
,835 4

Item-Total Statistics
Scale Mean Scale Corrected Cronbach's
if Item Variance if Item-Total Alpha if Item
Deleted Item Deleted Correlation Deleted
CL1 11,48 3,504 ,589 ,823
CL2 11,42 3,338 ,629 ,807
61
CL3 11,43 3,120 ,741 ,756
CL4 11,44 3,154 ,703 ,774

Appendix B
Result of Exploratory Factor Analysis (EFA)

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling
,895
Adequacy.
Approx. Chi-Square 4556,624
Bartlett's Test of
df 378
Sphericity
Sig. ,000

Communalities
Initial Extractio
n
REL1 ,537 ,607
REL2 ,535 ,560
REL3 ,565 ,636
REL4 ,577 ,667
RES1 ,704 ,765
RES2 ,682 ,750
RES3 ,614 ,663
RES4 ,688 ,723
ASS1 ,430 ,531
ASS2 ,438 ,551
ASS3 ,424 ,549
EM1 ,647 ,767
EM2 ,616 ,667
EM4 ,638 ,723
TAN
,475 ,552
1
TAN
,494 ,580
3
TAN
,521 ,630
4
CT1 ,611 ,682
CT2 ,498 ,565
CT3 ,586 ,627
CT4 ,555 ,640
PR1 ,579 ,609
62
PR2 ,582 ,638
PR3 ,638 ,790
CL1 ,420 ,434
CL2 ,481 ,512
CL3 ,612 ,736
CL4 ,552 ,637
Extraction Method:
Principal Axis Factoring.

Total Variance Explained

Factor Initial Eigenvalues Extraction Sums of Squared Loadings Rota
Sum
Squa
Loadi
Total % of Cumulative Total % of Cumulative To
Variance % Variance %
1 8,926 31,880 31,880 8,572 30,613 30,613
2 2,562 9,150 41,030 2,225 7,948 38,560
3 2,137 7,631 48,662 1,784 6,370 44,931
4 1,931 6,897 55,559 1,601 5,719 50,650
5 1,600 5,715 61,274 1,194 4,266 54,916
6 1,297 4,631 65,905 ,894 3,193 58,108
7 1,165 4,160 70,064 ,799 2,854 60,963
8 1,049 3,748 73,812 ,720 2,573 63,536
9 ,601 2,147 75,959
10 ,544 1,941 77,901
11 ,524 1,871 79,772
12 ,486 1,737 81,509
13 ,479 1,711 83,220
14 ,465 1,659 84,879
15 ,437 1,562 86,441
16 ,409 1,459 87,900
17 ,389 1,390 89,290
18 ,364 1,301 90,592
19 ,342 1,222 91,814
20 ,325 1,162 92,976
21 ,308 1,101 94,077
22 ,299 1,066 95,143
23 ,270 ,966 96,109
24 ,256 ,914 97,022
25 ,226 ,809 97,831
26 ,214 ,766 98,597
63
27 ,209 ,746 99,344
28 ,184 ,656 100,000
Extraction Method: Principal Axis Factoring.
a. When factors are correlated, sums of squared loadings cannot be added to obtain a total variance.

Factor Matrixa
Factor
1 2 3 4 5 6 7 8
CT1 ,701
CT3 ,695
PR3 ,661 -,457
CT4 ,646 -,324
CL3 ,632 ,344 ,362
PR2 ,621 -,312
PR1 ,618
CL4 ,604
CT2 ,595 -,327
RES2 ,593 ,447 -,325
RES4 ,585 ,485
CL2 ,583
RES1 ,583 ,469 -,397
TAN
,575 -,319 ,376
4
RES3 ,557 ,419 -,317
TAN
,542 ,378
1
CL1 ,538
EM2 ,535 -,358
EM4 ,529 -,390 ,357
TAN
,518 ,405
3
REL2 ,471 ,356 ,312 ,335
REL3 ,453 ,434 ,398
REL1 ,422 ,447 ,302 ,362
EM1 ,486 -,498 ,348
REL4 ,456 ,384 ,309 ,458
ASS2 ,376 ,475
ASS3 ,355 ,303 ,443
ASS1 ,328 ,316 ,436
Extraction Method: Principal Axis Factoring.
a. 8 factors extracted. 12 iterations required.

64
 Pattern Matrixa
Factor
1 2 3 4 5 6 7 8
RES1 ,871
RES2 ,868
RES4 ,829
RES3 ,815
REL4 ,828
REL3 ,795
REL1 ,780
REL2 ,717
CL3 ,881
CL4 ,781
CL2 ,612
CL1 ,601
EM1 ,905
EM4 ,817
EM2 ,795
CT4 ,818
CT2 ,786
CT1 ,777
CT3 ,625
TAN
,769
4
TAN
,768
3
TAN
,717
1
PR3 ,902
PR2 ,749
PR1 ,702
ASS3 ,747
ASS2 ,738
ASS1 ,723
Extraction Method: Principal Axis Factoring.
Rotation Method: Promax with Kaiser Normalization.
a. Rotation converged in 7 iterations.

Appendix C
Confirmatory Factor Analysis (CFA)

65
Modification Indices (Group number 1 - Default model)

Covariances: (Group number 1 - Default model)

M.I. Par Change

e25 <--> REL 5.433 .064
e23 <--> CT 5.571 .042
e20 <--> e24 4.558 -.054
e19 <--> EM 9.263 .083
e19 <--> e27 5.034 .045
e19 <--> e21 4.918 .045
e18 <--> e27 5.761 -.048
e17 <--> e25 4.255 -.047
e16 <--> e17 5.390 .048
e15 <--> CL 5.534 .048
e15 <--> e25 7.492 -.073
e14 <--> TAN 5.460 -.064
e14 <--> e25 4.148 .052
e10 <--> e21 4.623 -.041
e9 <--> PR 4.077 -.037
e9 <--> e25 4.501 .037
e9 <--> e23 10.370 -.055
e7 <--> e21 5.280 -.059
e6 <--> e8 7.215 -.069
e3 <--> e8 9.175 -.068
e2 <--> TAN 4.954 -.054
e2 <--> e15 6.062 -.062
e1 <--> e25 4.577 -.044
e1 <--> e15 5.682 .056
e1 <--> e14 7.014 -.059
e1 <--> e8 6.314 .057

66
Model fit summary

CMIN

Model NPAR CMIN DF P CMIN/DF

Default model 85 348,731 321 ,138 1,086

Saturated model 406 ,000 0

67
 Model NPAR CMIN DF P CMIN/DF

Independence model 28 4716,459 378 ,000 12,477

RMR, GFI

Model RMR GFI AGFI PGFI

Default model ,027 ,925 ,905 ,731

Saturated model ,000 1,000

Independence model ,252 ,269 ,215 ,250

Baseline Comparisons

NFI RFI IFI TLI

Model CFI
Delta1 rho1 Delta2 rho2

Default model ,926 ,913 ,994 ,992 ,994

Saturated model 1,000 1,000 1,000

Independence model ,000 ,000 ,000 ,000 ,000

RMSEA

Model RMSEA LO 90 HI 90 PCLOSE

Default model ,017 ,000 ,028 1,000
Independence model ,196 ,191 ,201 ,000

Regression Weights: (Group number 1 - Default model)

M.I. Par Change

PR1 <--- REL 4,223 ,107
PR1 <--- REL3 4,147 ,080
PR3 <--- CL3 4,903 -,110
TAN3 <--- REL1 4,859 -,086
CT3 <--- EM 6,254 ,086
CT3 <--- EM2 4,227 ,058
CT3 <--- EM4 5,474 ,067
CT3 <--- EM1 6,965 ,073
CT4 <--- REL2 4,152 -,071
EM2 <--- CL 5,403 ,175

68
 M.I. Par Change
EM2 <--- CL2 5,152 ,131
EM2 <--- CL4 5,435 ,133
EM2 <--- CL3 6,113 ,143
EM4 <--- PR1 4,312 ,090
EM1 <--- ASS 4,602 -,173
EM1 <--- CL 6,020 -,181
EM1 <--- ASS1 4,527 -,114
EM1 <--- CT2 4,092 -,099
EM1 <--- CL4 6,968 -,148
EM1 <--- CL3 5,112 -,129
CL3 <--- PR3 6,248 -,071
RES4 <--- REL4 4,404 ,069
RES1 <--- EM4 6,395 -,075

Standardized Regression Weights: (Group number 1 - Default model)

Estimate
RES1 <--- RES ,867
RES2 <--- RES ,855
RES4 <--- RES ,850
RES3 <--- RES ,814
REL4 <--- REL ,779
REL3 <--- REL ,841
REL1 <--- REL ,750
REL2 <--- REL ,806
CL3 <--- CL ,828
CL4 <--- CL ,791
CL2 <--- CL ,720
CL1 <--- CL ,661
EM1 <--- EM ,852
EM4 <--- EM ,846
EM2 <--- EM ,818
CT4 <--- CT ,767
CT2 <--- CT ,726
CT1 <--- CT ,827
CT3 <--- CT ,797
TAN4 <--- TAN ,799
TAN3 <--- TAN ,730
TAN1 <--- TAN ,748
PR3 <--- PR ,855
PR2 <--- PR ,810
PR1 <--- PR ,776

69
 Estimate
ASS3 <--- ASS ,740
ASS2 <--- ASS ,725
ASS1 <--- ASS ,735

Appendix D

Result of SEM Analysis

First SEM Analysis

Second SEM Analysis

70
Model fit summary

CMIN

Model NPAR CMIN DF P CMIN/DF

Default model 67 409,211 339 ,005 1,207
Saturated model 406 ,000 0
Independence model 28 4716,459 378 ,000 12,477

RMR, GFI

Model RMR GFI AGFI PGFI

Default model ,042 ,913 ,896 ,763
Saturated model ,000 1,000
Independence model ,252 ,269 ,215 ,250

Baseline Comparisons

NFI RFI IFI TLI

Model CFI
Delta1 rho1 Delta2 rho2
Default model ,913 ,903 ,984 ,982 ,984
Saturated model 1,000 1,000 1,000
Independence model ,000 ,000 ,000 ,000 ,000

RMSEA

71
 Model RMSEA LO 90 HI 90 PCLOSE
Default model ,026 ,015 ,035 1,000
Independence model ,196 ,191 ,201 ,000

First SEM

Scalar Estimates (Group number 1 - Default model)

Maximum Likelihood Estimates

Regression Weights: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

CT <--- SQ 1,195 ,155 7,702 *** par_26
PR <--- CT ,828 ,088 9,398 *** par_30
RES <--- SQ 1,000
REL <--- SQ ,726 ,121 6,009 *** par_22
EM <--- SQ 1,112 ,165 6,732 *** par_23
TAN <--- SQ 1,030 ,143 7,217 *** par_24
ASS <--- SQ ,468 ,096 4,857 *** par_25
CL <--- SQ 1,059 ,507 2,087 ,037 par_27
CL <--- CT -,431 ,358 -1,206 ,228 par_28
CL <--- PR ,282 ,055 5,117 *** par_29
RES1 <--- RES 1,000
RES2 <--- RES 1,048 ,056 18,761 *** par_1
RES4 <--- RES ,929 ,049 18,872 *** par_2
RES3 <--- RES ,896 ,052 17,318 *** par_3
REL4 <--- REL 1,000
REL3 <--- REL 1,061 ,079 13,457 *** par_4
REL1 <--- REL ,969 ,071 13,609 *** par_5
REL2 <--- REL 1,054 ,082 12,844 *** par_6
CL3 <--- CL 1,000
CL4 <--- CL ,981 ,068 14,499 *** par_7
CL2 <--- CL ,875 ,068 12,889 *** par_8
CL1 <--- CL ,775 ,066 11,750 *** par_9
EM1 <--- EM 1,000
EM4 <--- EM ,952 ,057 16,598 *** par_10
EM2 <--- EM ,938 ,058 16,122 *** par_11
CT4 <--- CT 1,000
CT2 <--- CT ,944 ,075 12,618 *** par_12
CT1 <--- CT 1,049 ,073 14,383 *** par_13
CT3 <--- CT ,991 ,073 13,630 *** par_14
TAN4 <--- TAN 1,000
TAN3 <--- TAN ,826 ,071 11,683 *** par_15
TAN1 <--- TAN ,935 ,079 11,790 *** par_16
PR3 <--- PR 1,000

72
 Estimate S.E. C.R. P Label
PR2 <--- PR ,919 ,059 15,502 *** par_17
PR1 <--- PR ,832 ,057 14,527 *** par_18
ASS3 <--- ASS 1,000
ASS2 <--- ASS 1,042 ,106 9,864 *** par_19
ASS1 <--- ASS ,967 ,096 10,059 *** par_20

Standardized Regression Weights: (Group number 1 - Default model)

Estimate
CT <--- SQ ,912
PR <--- CT ,629
RES <--- SQ ,585
REL <--- SQ ,476
EM <--- SQ ,565
TAN <--- SQ ,666
ASS <--- SQ ,398
CL <--- SQ ,883
CL <--- CT -,471
CL <--- PR ,405
RES1 <--- RES ,866
RES2 <--- RES ,856
RES4 <--- RES ,848
RES3 <--- RES ,815
REL4 <--- REL ,780
REL3 <--- REL ,842
REL1 <--- REL ,748
REL2 <--- REL ,806
CL3 <--- CL ,822
CL4 <--- CL ,791
CL2 <--- CL ,715
CL1 <--- CL ,657
EM1 <--- EM ,853
EM4 <--- EM ,842
EM2 <--- EM ,822
CT4 <--- CT ,763
CT2 <--- CT ,720
CT1 <--- CT ,821
CT3 <--- CT ,793
TAN4 <--- TAN ,799
TAN3 <--- TAN ,731
TAN1 <--- TAN ,747
PR3 <--- PR ,867
PR2 <--- PR ,807
PR1 <--- PR ,766

73
 Estimate
ASS3 <--- ASS ,745
ASS2 <--- ASS ,726
ASS1 <--- ASS ,728

Second SEM

Regression Weights: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

CT <--- SQ 1.148 .145 7.896 *** par_25

PR <--- CT -.821 .088 -9.361 *** par_29

RES <--- SQ 1.000

REL <--- SQ .721 .120 6.014 *** par_22

CL <--- SQ .487 .106 4.583 *** par_23

EM <--- SQ 1.117 .166 6.718 *** par_24

TAN <--- SQ 1.028 .143 7.209 *** par_26

ASS <--- SQ .456 .095 4.785 *** par_27

CL <--- PR -.275 .055 -5.012 *** par_28

RES1 <--- RES 1.000

RES2 <--- RES 1.049 .056 18.751 *** par_1

RES4 <--- RES .930 .049 18.874 *** par_2

RES3 <--- RES .897 .052 17.314 *** par_3

REL4 <--- REL 1.000

REL3 <--- REL 1.062 .079 13.450 *** par_4

REL1 <--- REL .970 .071 13.606 *** par_5

REL2 <--- REL 1.054 .082 12.830 *** par_6

CL3 <--- CL 1.000

CL4 <--- CL .985 .068 14.495 *** par_7

CL2 <--- CL .877 .068 12.866 *** par_8

CL1 <--- CL .778 .066 11.746 *** par_9

74
 Estimate S.E. C.R. P Label

EM1 <--- EM 1.000

EM4 <--- EM .951 .057 16.607 *** par_10

EM2 <--- EM .936 .058 16.130 *** par_11

CT4 <--- CT 1.000

CT2 <--- CT .942 .074 12.669 *** par_12

CT1 <--- CT 1.046 .072 14.426 *** par_13

CT3 <--- CT .985 .072 13.652 *** par_14

TAN4 <--- TAN 1.000

TAN3 <--- TAN .829 .071 11.687 *** par_15

TAN1 <--- TAN .938 .080 11.793 *** par_16

PR3 <--- PR 1.000

PR2 <--- PR .921 .059 15.505 *** par_17

PR1 <--- PR .833 .057 14.535 *** par_18

ASS3 <--- ASS 1.000

ASS2 <--- ASS 1.044 .106 9.838 *** par_19

ASS1 <--- ASS .965 .096 10.052 *** par_20

Standardized Regression Weights: (Group number 1 - Default model)

Estimate

CT <--- SQ .889

PR <--- CT -.627

RES <--- SQ .596

REL <--- SQ .481

CL <--- SQ .412

EM <--- SQ .577

TAN <--- SQ .678

ASS <--- SQ .395

75
 Estimate

CL <--- PR -.394

RES1 <--- RES .866

RES2 <--- RES .856

RES4 <--- RES .849

RES3 <--- RES .815

REL4 <--- REL .780

REL3 <--- REL .842

REL1 <--- REL .748

REL2 <--- REL .805

CL3 <--- CL .821

CL4 <--- CL .794

CL2 <--- CL .717

CL1 <--- CL .660

EM1 <--- EM .854

EM4 <--- EM .841

EM2 <--- EM .821

CT4 <--- CT .766

CT2 <--- CT .721

CT1 <--- CT .821

CT3 <--- CT .791

TAN4 <--- TAN .798

TAN3 <--- TAN .732

TAN1 <--- TAN .748

PR3 <--- PR .866

PR2 <--- PR .807

PR1 <--- PR .767

ASS3 <--- ASS .745

76
 Estimate

ASS2 <--- ASS .727

ASS1 <--- ASS .727

Covariances: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

e6 <--> e8 -,123 ,033 -3,736 *** par_21

Correlations: (Group number 1 - Default model)

Estimate
e6 <--> e8 -,418

Variances: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

SQ ,239 ,053 4,553 *** par_31
e35 ,069 ,030 2,344 ,019 par_32
e36 ,429 ,055 7,822 *** par_33
e29 ,432 ,059 7,360 *** par_34
e30 ,460 ,056 8,158 *** par_35
e31 ,631 ,082 7,703 *** par_36
e32 ,319 ,052 6,078 *** par_37
e33 ,278 ,045 6,214 *** par_38
e34 ,146 ,034 4,319 *** par_39
e1 ,232 ,027 8,601 *** par_40
e2 ,281 ,032 8,883 *** par_41
e3 ,235 ,026 9,152 *** par_42
e4 ,284 ,029 9,856 *** par_43
e5 ,358 ,039 9,271 *** par_44
e6 ,259 ,041 6,338 *** par_45
e7 ,413 ,041 10,067 *** par_46
e8 ,335 ,046 7,207 *** par_47
e9 ,165 ,021 8,046 *** par_48
e10 ,198 ,022 8,904 *** par_49
e11 ,252 ,025 10,159 *** par_50
e12 ,272 ,025 10,751 *** par_51
e13 ,348 ,046 7,605 *** par_52
e14 ,346 ,044 7,916 *** par_53
e15 ,391 ,046 8,506 *** par_54
e16 ,294 ,030 9,962 *** par_55

77
 Estimate S.E. C.R. P Label
e17 ,339 ,032 10,506 *** par_56
e18 ,218 ,024 8,958 *** par_57
e19 ,238 ,025 9,508 *** par_58
e20 ,323 ,044 7,367 *** par_59
e21 ,341 ,037 9,106 *** par_60
e22 ,397 ,045 8,736 *** par_61
e23 ,235 ,035 6,641 *** par_62
e24 ,323 ,037 8,722 *** par_63
e25 ,347 ,036 9,592 *** par_64
e26 ,265 ,034 7,688 *** par_65
e27 ,321 ,040 8,118 *** par_66
e28 ,273 ,034 8,155 *** par_67

Squared Multiple Correlations: (Group number 1 - Default model)

Estimate
CT ,831
PR ,396
ASS ,159
TAN ,443
EM ,319
CL ,576
REL ,226
RES ,342
ASS1 ,530
ASS2 ,527
ASS3 ,555
PR1 ,586
PR2 ,651
PR3 ,751
TAN1 ,558
TAN3 ,534
TAN4 ,639
CT3 ,629
CT1 ,674
CT2 ,519
CT4 ,583
EM2 ,676
EM4 ,708
EM1 ,727
CL1 ,432
CL2 ,512
CL4 ,625
CL3 ,676

78
 Estimate
REL2 ,649
REL1 ,559
REL3 ,708
REL4 ,609
RES3 ,664
RES4 ,719
RES2 ,733
RES1 ,751

Standardized Regression Weights: (Group number 1 - Default model)

Estimate
CT <--- SQ ,912
PR <--- CT ,629
RES <--- SQ ,585
REL <--- SQ ,476
EM <--- SQ ,565
TAN <--- SQ ,666
ASS <--- SQ ,398
CL <--- SQ ,883
CL <--- CT -,471
CL <--- PR ,405
RES1 <--- RES ,866
RES2 <--- RES ,856
RES4 <--- RES ,848
RES3 <--- RES ,815
REL4 <--- REL ,780
REL3 <--- REL ,842
REL1 <--- REL ,748
REL2 <--- REL ,806
CL3 <--- CL ,822
CL4 <--- CL ,791
CL2 <--- CL ,715
CL1 <--- CL ,657
EM1 <--- EM ,853
EM4 <--- EM ,842
EM2 <--- EM ,822
CT4 <--- CT ,763
CT2 <--- CT ,720
CT1 <--- CT ,821
CT3 <--- CT ,793
TAN4 <--- TAN ,799
TAN3 <--- TAN ,731
TAN1 <--- TAN ,747

79
 Estimate
PR3 <--- PR ,867
PR2 <--- PR ,807
PR1 <--- PR ,766
ASS3 <--- ASS ,745
ASS2 <--- ASS ,726
ASS1 <--- ASS ,728

Appendix E

The valid questionaire

Dear Sir/ Madam:

My name is Nguyen Quoc Tran, a senior student of International University – HCM

National University.

Currently, I am conducting the research “THE IMPACT OF SERVICE QUALITY,

CUSTOMER TRUST AND PERCEIVED RISK ON CUSTOMER LOYALTY”

Feedbacks from you will help me in completing this research . I hope that you have
time to answer the following statements. All of your answers will be very valuable for this
research and I sincerely thank the support and meaningful respondents .

Looking forwrd to your sincere cooperation!

Respondents please mark ( X ) selected the answer

PART 1 : INFORMATION respondents

A. Personal information:
1. Please indicate your gender
Female
Male

2. Age
Under 18
18 – 23
 23 – 28

80
 28 – 33
 Over 33

2. Job:
 Worker Housewife
Student Office staff
Others
3. Income:
Less than VND 3 millions  VND 3 - 8 millions
VND 8 – 13 millions VND 13 – 18 millions
 Over 13 – 18 millions
4. Usage per month
 Less than 1 time
 1 – 3 times
 Over 3 times
Note: Please mark “X” in the box below the level of " agree " increases from 1 to 5 .
Meaning each level as follows:
1: Strongly disagree . 2: Disagree. 3: Neutral. 4: Agreed. 5: Strongly agree .
STATEMENT
(Absolute Security, to be used only for scientific research)
RELIABILITY
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5
5. Strongly agree
REL1 Uber always provides punctual service
REL2 Uber always ensures fare accurately
Uber is always sincerely arranged for customers’ problems
REL3

REL4 Uber ensures the promised quality during the journey

RESPONSIVENESS
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5
5. Strongly agree

81
RES1 Drivers always perform service promptly and professionally

RES2 Drivers are always willing to help customers

RES3 Uber can provide timely and efficient service

Drivers informs customers any changes of timetable in
RES4
advance

ASSURANCE
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5

5. Strongly agree
ASS1 Drivers control taxi safely and carefully
ASS2 Drivers’ behavior and service style are professional

ASS3 I feel safe during the journey

ASS4 I feel fulfilled with Uber’s fare

EMPATHY
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5
5. Strongly agree
EM1 Drivers always looks after the best interests of their customers
Uber company has operating hours convenient to all their
EM2
customers
Uber provides various forms of payment (in cash or by credit
EM3
card)
Uber taxis are present at many places being ready to serve
EM4
customers
TANGIBLENESS
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5
5. Strongly agree
TAN1 Uber taxis is new and modern
The inside cars are clean and professional (seat, perfume, air-
TAN2
conditioner, …)
TAN3 Drivers are well-dressed and appear neat
Uber have car options (UberX, UberBlack) to fulfill
TAN4
customers’ needs

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CUSTOMER TRUST
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5
5. Strongly agree
CT1 I believe in the information which Uber services provide
Uber has good will reputation to make me feel comfortable
CT2
using online payment (visa, sms banking, etc.)
CT3 I believe that the errors while using Uber services rarely occur
I believe that advances in technology security will protect me
CT4
more while using Uber services
PERCEIVED RISK
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5
5. Strongly agree
I totally feel secure about the safety when using Uber taxis
PR1
(careless checking drivers’ backgrounds, etc.)
PR2 I totally feel secure about qualification of drivers
PR3 I totally feel secure about the accuracy of fare
I totally feel secure that other people cannot my personal
PR4
information concerning my online payment
CUSTOMER LOYALTY
1. Strongly disagree; 2. Disagree; 3. Neutral. 4. Agree; 1 2 3 4 5
5. Strongly agree
CL1 I often mention about the advantages of Uber to other people
I introduce Uber whenever there are someone mention about
CL2
transport service
CL3 I suggest friends and family using Uber taxi
CL4 The first transportation I think about is Uber

83