Chapter 1

The Problem

This chapter presented the general information of the study. It consists of the problem,

theoretical framework, conceptual framework, research questions, hypothesis, the significance of

the study, limitations, and the definition of terms.

Introduction

Food delivery services have become increasingly popular in recent years, with the convenience of

ordering food right to our doorstep. The surge in demand for these services has led to the emergence of a

new workforce known as food delivery drivers. Among these platforms, Food panda stands out as a

pioneering force in the global food delivery landscape. Founded in 2012, Food panda has rapidly evolved

into one of the world's leading online food delivery marketplaces, revolutionizing the way people order

and receive food from their favorite restaurants. Food panda has profoundly influenced consumer

behavior, ushering in a new era of convenience, choice, and efficiency. With the advent of food delivery

apps, customers now have unprecedented access to diverse culinary experiences without the constraints of

geographical limitations.

One of the significant challenges faced by food delivery services is the issue of location, which can have a

considerable impact on the job satisfaction of the drivers. The location issues in food delivery services

refer to the complexities associated with navigating through various geographical areas, including urban

centers, suburban neighborhoods, and rural regions, to deliver orders efficiently. These challenges can

arise due to factors such as traffic congestion, inadequate road infrastructure, unclear addresses, and

difficult-to-access locations. Each of these factors can significantly affect the timely and accurate delivery

of orders, leading to frustration for both drivers and customers. The effect of location issues on driver's

job satisfaction is a crucial aspect to consider. Job satisfaction plays a pivotal role in determining
employee motivation, productivity, and retention. On the other hand, cancellations can also result in

reduced income, wasted time and effort, and increased dissatisfaction among drivers. When an order is

canceled, the driver loses the opportunity to earn income from that delivery. This loss of income can lead

to dissatisfaction and frustration among drivers, especially if cancellations occur frequently. Order

cancellations can also have a psychological impact on drivers. They may feel a sense of disappointment

or failure when an order is canceled, especially if they were looking forward to completing it successfully.

This can affect their motivation and overall job satisfaction, leading to a decrease in their engagement

with the job.

Compensation is another significant aspect directly linked to food delivery drivers' job satisfaction and

financial stability. According to Enanoria and Maranga (2022), factors including low base pay, opaque

payment systems, and insufficient expense reimbursement may make delivery riders' concerns about

compensation even worse. While the gig economy offers flexibility and independence, it often comes at

the cost of uncertain and inconsistent earnings. Many food delivery drivers are classified as independent

contractors rather than employees, which can lead to challenges in terms of fair compensation.

Additionally, issues such as low base pay, lack of transparency in payment structures, and inadequate

reimbursement for expenses can further exacerbate the compensation concerns of the delivery riders.

Understanding the booking issues and compensation challenges faced by Food panda riders is crucial for

various stakeholders, including the drivers themselves, food delivery companies, regulatory bodies, and

even consumers. By addressing these issues, stakeholders can work towards creating a more equitable and

sustainable environment for the riders, ensuring their well-being and promoting a seamless food delivery

experience for customers.

This research aims to delve into the phenomenon of location issues, cancellation of orders, riders’

compensation concerns and its implications on the job satisfaction of food delivery riders. By analyzing

the existing literature, surveying food delivery drivers, and examining the policies and practices of food
delivery companies, this study seeks to shed light on the challenges faced by these frontline workers and

the potential effects on their overall riders’ satisfaction, performance, and well-being. the nature and

extent of these issues.

Theoretical Framework

The theoretical framework is anchored on the Two-factor theory and supported by The Hierarchy of

Needs theory. In 1959, Frederick Herzberg proposed a Two-factor theory, called Motivator Hygiene

Theory, that explains pleasure and motivation in the job. According to this hypothesis that job

satisfaction and dissatisfaction exist in two different continua, each with own set of factors, namely

motivation and hygiene factors. Under Herzberg's approach, there are two guiding principles: (1)

improving the motivator factors increases job satisfaction, and (2) improving the hygiene factors

decreases job dissatisfaction. Although these appear to be opposites, they function together in a cycle.

Hygiene factors are the variables correlated with reducing the level of job dissatisfaction, as opposed

to motivation factors, which directly influence an employee’s motivation and satisfaction. However, if a

hygiene factor is absent in a workplace, the particular aspect of the work environment or job context is

not being met adequately, and this lead to dissatisfaction among employees. In other words, hygiene

factor are the elements of a job that satisfy basic needs: security, pay, fairness, and working

conditions. The hygiene factors represented people’s physiological needs and expectations to be met.

Typically, it includes pay or salary structure, company policies, fringe benefits, working conditions,

status, interpersonal relations, and job security.

Further, the pay or salary structure should be acceptable and appropriate. It must be comparable and

competitive with others in the same industry. Moreover, a fair and competitive salary is essential to

prevent job dissatisfaction and it is not enough to fully motivate employees. In other words, if

employees feel that they are not fairly compensated for their work, it can lead to dissatisfaction.
However, even if they are satisfied with their salary, it does not necessarily mean they will be highly

motivated or satisfied with their job. Additionally, the riders fringe benefits should include health care

plans (PhilHealth), family benefits, riders’ assistance programs (SSS, PAG-IBIG), etc. Lastly, the

workplace environment must be safe, clean, and sanitary.

In contrast, motivator factors lead to job satisfaction, which they satisfy needs for growth and self-

actualization. These factors are referred to as satisfiers. Moreover, these factors are related to the job

content itself and have a direct impact on employee motivation and satisfaction when present. The

motivator contribute to a sense of fulfillment and personal growth. It includes achievement,

recognition, advancement, responsibility and personal growth. Additionally, when motivation factors

are present and well-implemented in the work environment, it lead to increased rider’s satisfaction

and motivation, enhancing employee performance and engagement.

The Hierarchy of Needs theory, proposed by Abraham Maslow and published in 1943, is one of the

most widely discussed theories of motivation. Maslow viewed human needs as a hierarchy, ascending

from the most basic to the most complex, and he concluded that when one set of needs is met, this

type of need ceases to be a motivator. Maslow proposed a five-level need hierarchy with physiological,

security, safety, social, esteem, and self-actualization needs. Physiological needs are fundamental to

human life and include food, clothing, shelter, air, water, and other necessities. These requirements are

related to human survival and maintenance. They have a significant impact on human behavior. These

needs must be addressed first, at least partially, before higher-level needs emerge. Once a man's

physiological needs are satisfied, they no longer motivate him. When an individual's physical needs are

relatively satisfied, their security and safety needs take precedence and dominate behavior. These

needs manifest themselves in desires such as job security and physical safety. Meeting these needs

necessitates more money, so the individual is compelled to work harder. These, like physiological
needs, become inactive once they are completed. While in social needs, because humans are social

beings, they require a sense of belonging and acceptance. People try to meet each other's affection,

acceptance, and friendship needs. It appears after physiological and safety requirements have been

met. While in esteem needs, according to Maslow, once people have satisfied their need to belong,

they want to be held in high regard by themselves and others.

It is crucial that riders feel a sense of accomplishment. Regardless of the position, there must be some

form of fruit. For an organization to drive its people to perform successfully, it must offer growth and

promotion possibilities. Workers must take responsibility for their work, and their managers should

give them ownership of the task. They should reduce control while maintaining responsibility. Lastly,

the job should be meaningful, exciting, and demanding for the person to perform and be motivated.

Power, prestige, status, and self-confidence are all satisfied by this type of need. Internal esteem

factors such as self-esteem, autonomy, and achievement are included, as are external esteem factors

such as status, recognition, and attention. Lastly, Maslow considers self-actualization to be the highest

need in his hierarchy. It is the desire to achieve one's full potential. It includes personal development,

reaching one's full potential, and self-actualization. It is to achieve something and maximize one's

potential. When Maslow's hierarchy of needs is applied to work situations, employers must first ensure

that deficiency needs are satisfied. In broad terms, this means a safe working environment and

sufficient pay. Second, it entails creating an environment where employees can reach their full

potential. Failure to do so would theoretically increase employee frustration, potentially leading to

poorer performance, lower job satisfaction, and increased organizational withdrawal. According to

Maslow's theory of the hierarchy of needs, for instance, job insecurity and the threat of job cuts will

prevent a person from meeting their higher growth needs. They may work harder for security without

satisfying their other requirements. If security is not regained, they will fulfill their needs elsewhere.
Conceptual Framework

This presents the conceptual framework of the study. It consists of the food delivery

service that delivery rider is affiliated with, Food Panda. Determinants of the rider’s satisfaction;

location, cancellation of orders, unsatisfied customer and compensation as independent variables;

and rider’s satisfaction as the dependent variables. This study used IV-DV model to represents its

conceptual framework.

The first independent variable used in the present study is location, delivery riders often

encounter advantages and disadvantages in terms of location. Since customers are the lifeblood

of the business, delivery riders are obliged to perform their duties even if the location is nearby

or distant. However, there are inevitable incidences that promotes burden to delivery riders such

as order cancellations and bogus customers. (Grecia, 2020) There are also advantages in distant

deliveries that will benefit the rider and its customer. Such as substantial delivery charge and a

slim chance of compensation from the customer.

The second independent variable used in the present study is cancellation of orders,

which can have a various implication for the riders, such as, financial loss, time wastage, and

overall satisfaction. However, one persistent issue faced by the riders is order cancellations.

Cancellation of orders is a food delivery order that has been placed by a customer through the

Food panda platform or app. When customers cancel their orders after the rider has already

accepted or started the delivery process, it can have negative implications for the riders'

satisfaction and overall experience. Riders experiencing high levels of order cancellations were

more likely to report lower job satisfaction and had a higher likelihood of leaving the platform.

These studies collectively demonstrate the detrimental effects of order cancellations on the

satisfaction and retention of Food Panda riders, emphasizing the importance of addressing this
issue to enhance their overall experience (Chen at al. 2018). The findings of this study will

inform future empirical research, guide policy-making within food delivery platforms, and help

identify strategies to mitigate the negative effects of order cancellations on rider well-being.

The third independent variable used in the present study is unsatisfied customer, which

according to Dr. Emily Watson (2018) explores the critical relationship between customer

dissatisfaction and the overall experience of food delivery services. The study sheds light on the

far-reaching consequences of unsatisfied customers, revealing that their negative feedback can

significantly influence the satisfaction levels of other potential customers. Dr. Watson, E. (2018)

delves into the various factors contributing to customer dissatisfaction, such as late deliveries,

incorrect orders, and poor customer service, all of which play a pivotal role in shaping the

perceptions of food delivery services. In addition, the model identifies the keys discrepancies or

gaps relating to managerial perceptions of service quality, and tasks associated with service

delivery to customers. The findings of the study serve as a wake-up call to the industry,

emphasizing the urgent need for improved service standards and customer-centric approaches to

ensure sustained success and enhanced satisfaction for food delivery services worldwide.

The other independent variable is compensation. This relates to the procedure by which

an employee expects to be paid for their work. By offering competitive pay to their employees,

the business aims to raise the quality of its workforce for the benefit of the enterprise.

Sudiardhita and associates (2018) stated that for employees as individuals, remuneration is

crucial since the quantity of compensation represents the scope of their labor for the workers,

their families, and society as a whole. Strong correlations between employee compensation and

employee satisfaction, showing that encouraging employee contentment through remuneration is

essential (Adlawon et al., 2022). Furthermore, Saman (2020)'s research demonstrated that salary

has a favorable and significant impact on fostering employee happiness.

Furthermore, compensation directly affects the income and financial stability of food

delivery riders (Kamilah et al., 2020). Insufficient compensation may lead to financial stress,

making it challenging for riders to make ends meet or support their families. According to

Adlawon et al., (2022) there are both financial and non-financial forms of compensation.

Indicators of monetary remuneration include wages, incentives, delayed payments, and vehicle

upkeep. The non-financial extent consists of promotion, acknowledgment, appreciation, job

comfort, and coworkers comprise (Islam, Z. MD., & Hossain, M. A., 2019).

Lastly, the dependent variable in this study is riders satisfaction, according to Philip Noel Yap

Enanoria, and Michael Conrad Maranga (2022) "delivery rider’s services and determine its effect on

customer satisfaction based on the customer’s perception." It describes the extent of contentment an

individual feels with their rider's base in their service. It is the admixture of how a person thinks, feels,

perceives their rider's. Various factors influence rider's satisfaction. However, their are only Three will be

used in this study: location, cancellation of orders, and compensation. Moreover, it is essential to

remember that an employee's sense that there are satisfied there job within the company is to influence by

rider's satisfaction. Employees who are very satisfied with their work show a positive attitude towards

their work. Employees will enjoy their work and do their job with all their heart. (Fitri Rezeki 2023)

Figure 1

Conceptual model showing the impact of the determinants of driver’s satisfaction

LOCATION

CANCELLATION OF
ORDERS RIDER’S

SATISFACTION
 COMPENSATION

 Wages
 Incentives

Research Questions

This study aims to perform a comparative analysis of rider’s satisfaction of the delivery riders

based on their company affiliations. Also, to determine how location, cancelation of orders, unsatisfied

customers and compensation can affect the rider’s satisfaction of Food Panda riders.

Specifically, this study sought to answer the following questions:

What is the respondent’s profile in terms of food delivery company affiliation?

(a) Food Panda

What is the level of the determinants of rider’s satisfaction in terms of:

(a) Location

(b) Cancellation of Orders

(c) Unsatisfied Customers

(d) Compensation

What is the respondent’s level of rider’s satisfaction?

Does rider’s satisfaction significantly differ considering the respondents’ company affiliation?

Do location, cancellation of orders, unsatisfied customer and compensation significantly affect rider’s

satisfaction?
Hypothesis

Based on the literature review and frame of thought, hence hypothesis in this research can be formulated

as follows:

Problems 1, 2, and 3 are hypotheses-free.

Ho1: Rider’s satisfaction does not significantly differ considering the respondents’ company

affiliation.

Ho2: Location, Cancellation of Orders, and Compensation do not significantly impact rider’s

satisfaction.

The Scope and Delimitations of the Study

This research paper aims to investigate the rider’s satisfaction levels among Food panda riders,

focusing on various factors that contribute to their overall satisfaction. This study will encompass a

comprehensive analysis of the riders' experiences, attitudes, and perceptions regarding their work

conditions, income, working hours, support from the company, and the impact of the job on their personal

lives. Additionally, the research will explore how rider’s satisfaction affects their motivation, loyalty, and

willingness to continue their employment with Food panda. The scope of the study includes gathering

data from a diverse group of riders across different locations and considering both full-time and part-time

riders to ensure a broad representation of perspectives.

While this study endeavors to provide valuable insights into the rider’s satisfaction of Food panda riders,

it does have some limitations that must be acknowledged. First, this research may face challenges in

obtaining a completely representative sample of riders due to potential difficulties in accessing the entire

population of riders in various regions. Additionally, the data collection process may be affected by non-

response bias, where some riders might choose not to participate, potentially leading to a less-

comprehensive data set.

Moreover, this study focuses on rider’s satisfaction might not account for external factors that could

influence a rider's overall happiness or well-being, such as personal life circumstances or experiences

with other food delivery platforms. Furthermore, as this study relies primarily on self-reported data from

surveys or interviews, there could be a risk of response bias, where participants may provide socially

desirable answers instead of their genuine feelings.

Furthermore, the dynamic nature of the economy and the rapidly evolving nature of the food delivery

industry might mean that the findings of the research could become outdated relatively quickly. The

study's time bound nature may not capture long term changes in job satisfaction among Food panda

riders, necessitating additional research in the future.

Finally, while this study will strive to establish correlations between various factors and rider’s

satisfaction, it might not be able to definitively establish causation due to its cross-sectional design.

Despite these limitations, the research aims to provide valuable insights into the job satisfaction levels of

Food panda riders, shedding light on areas for potential improvement in their work conditions and overall

well-being. Researchers and Food panda itself can use the findings to make informed decisions that may

enhance the job satisfaction and overall job experience for the riders.

The Significance of the Study

This study is meant to provide crucial information and knowledge concerning the rider’s

satisfaction of delivery riders. Considering that regardless of the numerous studies about rider’s

satisfaction, there is no study conducted about the rider’s satisfaction of delivery riders anywhere, let

alone in the Philippines. The information gathered in this study contributed to the gap in rider’s

satisfaction among delivery riders. Benefiting from the study are the various sectors as follows:
Delivery Riders – This can be incredibly beneficial to them to help assess their satisfaction with

compensation, job safety, and job security. Thus, researchers provide recommendations through

investigation to improve their current situation and as well as improve their job satisfaction.

Food Delivery Services – This can be incredibly beneficial to them, for this can give insights about

the areas of development and improvements they may consider in fostering job satisfaction for their

employees or delivery riders.

Future Researchers – This study can benefit future researchers who wish to conduct similar research

by using this study as a reference

Definition of Terms

To facilitate the understanding of the study, different terms are defined herein.

Location- In food delivery services, location is the physical space delivery rider’s use to determine

someone’s position. It is also a predefined destination where the delivery is to be supplied, delivery riders

makes every effort to deliver any type of food on the road at any hour (Kwak & Cho, 2020)

Cancellation of Orders- A canceled order is a previously submitted order to buy or sell a security that

gets canceled before it executes on an exchange. (Scott et al, 2021) is an action to stop a transaction from

being completed. Some reasons which may result to order cancellation are, but not limited to stock

availability, change of mind, price matching, and poor customer service.

Compensation- Compensation includes wages, salaries, bonuses and commission structures. Employers

shouldn't ignore the benefits portion of employee compensation and benefits, because the benefits

sweeten employment contracts with the priorities that most employees need. (Leonard, 2019)

The monetary value that the company pays for the work done by an employee. The extent of
compensation was measured using descriptive statistics, measures of central tendency, including the

mean, and measures of dispersion, including standard deviation

Rider’s Satisfaction- Riders satisfaction can be measured in cognitive, affective, and behavioral

components. Job security and progress career path to riders would retain them in the organization and also

provide motivation for their job. A study revealed that monetary incentives and salary hugely satisfy their

job increases their motivation and so. (Abro et al, 2018)