DETERMINANT FACTORS OF CUSTOMER SATISFACTION

IN RIDE-HAILING SERVICES IN TANZANIA

A case of Uber and Bolt in Tanzania

By

Twinomugisha M. Mushumba

A Dissertation Submitted in Partial Fulfilment of the Requirements for the

Degree of Master of Business Administration in Marketing of the University of
Dar es Salaam

University of Dar es Salaam

November, 2021
DETERMINANT FACTORS OF CUSTOMER SATISFACTION

IN RIDE-HAILING SERVICES IN TANZANIA

A case of Uber and Bolt in Tanzania

By

Twinomugisha M. Mushumba

A Dissertation Submitted in Partial Fulfilment of the Requirements for the

Degree of Master of Business Administration in Marketing of the University of
Dar es Salaam

University of Dar es Salaam

November, 2021

i
 CERTIFICATION

The undersigned certifies that he has read and hereby recommends for acceptance by

the University of Dar es Salaam dissertation titled: Determinant factors of customer

satisfaction in ride-hailing services in Tanzania: The Case Study of Uber and Bolt

Tanzania, in Partial fulfilment of the requirements for the degree of Master in Business

Administration (Marketing) of the University of Dar es Salaam.

………………………………..…….

Dr. G. Lindi

(Supervisor)

Date: ………………………………………….

ii
iii
 DECLARATION AND COPYRIGHT

I, Twinomugisha M. Mushumba, declare that this dissertation is my own original work

and that it has not been presented and will not be presented to any other university for a

similar or any other degree award.

Signature …………………….

This thesis is copyright material protected under the Berne Convection, the Copyright

Act of 1999 and other international and national enactments, in that behalf, on

intellectual property. It may not be reproduced by any means in full or part, except for

short extracts in fair dealings, for research or private study, critical scholarly review or

disclosure with an acknowledgement, without written permission of the Directorate of

Postgraduate Studies, on behalf of both the author and the University of Dar es Salaam.

iv
 ACKNOWLEDGEMENT

Fisrt of all, I would like to thank my almighty God for his grace and blessings. My

sincere gratitude and appreciation goes to my supervisor Dr. George Lindi for

immediate advise and support during the preparation of this report.

Further more, I would like to thank the marketing department and other staffs of

University of Dar es salaam for their contributions during my time at school. To my

colleagues whom we shared ideas and participate together academically and socially to

the completion of my study. Special appreciation goes to my family and beloved

daughter for everything they sacrifice for me to achieve this milestone.

v
 DEDICATION

This dissertation is dedicated to my parents Dr. Nsiima P Mushumba and Joyce F

Mushumba, my brothers Mukiza and Mwemezi Mushumba for their full support since

the beginning of my studies.

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 LIST OF ABBREVIATIONS AND ACRONYMS

EEPCO Ethiopian Electricity Power Corporation

GPS Global Positioning System

ICT Information and Communication Technology

RSQS Retail Service Quality Scale

SPSS Statistical Package for Social Science

UDBS University of Dar Es Salaam Business School

vii
 ABSTRACT

This paper assessed the determinant factors of customer satisfaction in ride-hailing

services in Tanzania. The study further determined the impact of service quality on
customer satisfaction, assessed on how monetary value influence customer satisfaction
and established an influence of product quality on customer satisfaction in ride-hailing
industry in Tanzania.

Practically, the study used a case study design with a total of 100 respondents.
Purposive and random sampling used to select the respondents on whom questionnaires
and interview methods were used to gather relevant data and information.

Primarily, the study found that, in terms of service quality, cleanliness of the vehicle has
major impact on satisfaction of customers in ride-hailing services in Tanzania
considering Uber and Bolt Tanzania. On the other hand, in terms of monetary value,
customers are highly satisfied with the effectiveness of the ride-hailing process. That is
to say, riders might be willing to pay a slight amount if they are assuredon the
effectiveness of ride-riding process. Lastly, the study found that customers are highly
satisfied with the effectiveness of the ride-hailing system (application). Thus, riders are
highly satisfied if they are confident of the responsiveness of ride-riding system.

Conclusively, the study recommends that, as the business environment is becoming

more and more competitive and dynamic, it is necessary then for the Bolt and Uber
Tanzaniato be customer-centered and employmeasures that they can derive a total and
reliable customer satisfaction in such a way that meets the desired makings of flexibility
and scalability, providing them with a competitive advantage to stay ahead and provide
new and improved products and services to delight their customers.

viii
 TABLE OF CONTENTS

Certification.......................................................................................................................ii
Declaration and Copyright...............................................................................................iii
Acknowledment...............................................................................................................iv
Dedication.........................................................................................................................v
List of Abbreviations and Acronyms...............................................................................vi
Abstract...........................................................................................................................vii
Table of Contents...........................................................................................................viii
List of Tables....................................................................................................................ix
List of Figures...................................................................................................................x
CHAPTER ONE: INTRODUCTION AND BACKGROUND OF THE STUDY..........1
1.1 Introduction.................................................................................................................1
1.2 Background of the study..............................................................................................1
1.3 Research Objectives....................................................................................................6
1.3.1 Main Objective.........................................................................................................6
1.3.2 Specific Objectives...................................................................................................6
1.4 Research Hypotheses...................................................................................................6
1.5Significance of the study..............................................................................................7
1.6 Scope/Delimitation of the study..................................................................................7
CHAPTER TWO: LITERATURE REVIEW...................................................................9
2.1 Introduction.................................................................................................................9
2.2 Definition of key terms................................................................................................9
2.2.1 Service Quality.........................................................................................................9
2.2.2 Customer Satisfaction.............................................................................................10
2.2.3 Ride-hailing............................................................................................................10
2.3 Theoretical Literature................................................................................................11
2.3.1 The Dissonance Theory..........................................................................................11

ix
2.3.2 Expectancy-Disconfirmation Paradigm.................................................................12
2.3.3 SERVQUAL Model...............................................................................................13
2.4 Empirical Literature..................................................................................................13
2.5 Research Model.........................................................................................................19
2.6 Conceptual Framework.............................................................................................21
2.7 Research Gap.............................................................................................................22
CHAPTER THREE: RESEARCH METHODOLOGY..................................................24
3.1 Introduction...............................................................................................................24
3.2 Research Design........................................................................................................24
3.3 Area of Study............................................................................................................24
3.4 Sample and Sampling procedures.............................................................................25
3.5 Sampling techniques..................................................................................................27
3.5.1 Systematic sampling...............................................................................................27
3.5.2 Purposive sampling................................................................................................27
3.6 Sources of data and collection methods....................................................................28
3.6.1 Questionnaires........................................................................................................28
3.6.2 Interview.................................................................................................................28
3.7Data processing and analysis......................................................................................29
3.7.1 Descriptive analysis................................................................................................29
CHAPTER FOUR: FINDINDS AND DISCUSSION....................................................30
4.1 Introduction...............................................................................................................30
4.2 Demographic characteristics of respondents.............................................................30
4.2.1 Gender of respondents............................................................................................30
4.2.2 Level of education of respondents..........................................................................31
4.2.3 Age of respondents.................................................................................................32
4.3 Presentation of findings.............................................................................................33
4.3.1 The Impact of Service Quality on Customer Satisfaction......................................34
4.3.2 Influence of Monetary value on Customer Satisfaction.........................................35
4.3.3 Influence of Product Quality on Customer Satisfaction.........................................37

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4.4 Further Analysis and Discussion...............................................................................38
4.4.1 The Impact of Service Quality on Customer Satisfaction......................................39
4.4.2 Influence of Monetary value on Customer Satisfaction.........................................43
4.4.3 Influence of Product Quality on Customer Satisfaction.........................................45
CHAPTER FIVE: CONCLUSIONS AND RECOMMENDATIONS...........................49
5.1 Introduction...............................................................................................................49
5.2 Conclusions...............................................................................................................49
5.2.1 The Impact of Service Quality on Customer Satisfaction......................................49
5.2.2Influence of Monetary value on Customer Satisfaction..........................................49
5.2.3Influence of Product Quality on Customer Satisfaction..........................................49
5.3 Recommendations.....................................................................................................50
5.4 Area for further studies..............................................................................................51
REFERENCES................................................................................................................52
APPENDICES.................................................................................................................56

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 LIST OF TABLES

Table4. 1: Gender of respondents....................................................................................30

Table 4. 2: Level of Education of Respondents..............................................................31
Table 4. 3: Age of Respondents......................................................................................32
Table 4. 4: Mean estimation for the impacts that service has on Customer satisfaction in
ride-hailing industry........................................................................................................34
Table 4. 5: Mean estimation for the influence that monetary values has on customer
satisfaction in ride-hailing...............................................................................................35
Table 4. 6: Mean estimation for the influence that product quality has on customer
satisfaction in ride-hailing...............................................................................................37
Table 4. 7: Regression analysis on the Impact of Service Quality on Customer
Satisfaction basing on Gender of Respondents...............................................................38
Table 4. 8: Regression analysis on the Impact of Service Quality on Customer
Satisfaction basing on level of education of Respondents..............................................40
Table 4. 9: Regression analysis on the Impact of Service Quality on Customer
Satisfaction basing on age of Respondents.....................................................................41
Table 4. 10: Regression analysis on the Influence of Monetary value on Customer
Satisfaction basing on gender of Respondents................................................................42
Table 4. 11: Regression analysis on the Influence of Monetary value on Customer
Satisfaction basing on education level of Respondents...................................................43
Table 4. 12: Regression analysis on the Influence of Monetary value on Customer
Satisfaction basing on age of Respondents.....................................................................44
Table 4. 13: Regression analysis on the Influence of Product Quality on Customer
Satisfaction basing on gender of Respondents................................................................45
Table 4. 14: Regression analysis on the Influence of Product Quality on Customer
Satisfaction basing on level of education of Respondents..............................................46
Table 4. 15: Regression analysis on the Influence of Product Quality on Customer
Satisfaction basing on age of Respondents.....................................................................46

xii
 LIST OF FIGURES

Figure1. 1: Conceptual Framework.................................................................................21

xiii
 CHAPTER ONE

INTRODUCTION AND BACKGROUND OF THE STUDY

1.1 Introduction

This is an introductory chapter. It presents the background of the study, statement of the
problem, objectives of the study, research questions and significance of the study.

1.2 Background of the study

The world is and going to be digitized even more. The introduction and development of

Science and Technology has brought so many changes and opens the room for

innovation and creativity (Shaheen & Rayle, 2017). Further to that, In the 21st century,

various internet-based technologies, including Information and Communication

Technologies (ICT), have emerged and expanded into consumers’ daily lives. Digital

technology, especially mobile technology, plays a crucial role in changing consumer

lifestyles, especially for the younger generation. The presence of ICT also creates new

opportunities for new businesses to meet customers’ needs, such as online businesses

and mobile technology-based businesses.

This goes to the introduction of new product, modalities of delivering service and

running of businesses. Precisely, the rapid growth in digital businesses has provided

many expediencies, one of which is the modes of transportation, where some of the

companies developed mobile apps that enable users to request for a ride at their

1
convinient time at a pre-determined rate (Foo, 2014). That is what is referred to Ride-

hailing or E-hailing.The innovation in mobile technology has led to a rapid expansion in

the transportation industry. Meanwhile, the integration of the Global Positioning System

(GPS) and electronic payment along with the continuous need for flexible travel has

caused the Grab e-hailing service to become one of the most prominent on-demand

private driver platforms globally.

The convenient, inexpensive and safe on-demand service provided by the Grab e-

hailing service enables a more flexible and reliable mode of transportation, particularly

for road end-users who prefer riding in a privately-owned vehicle. Furthermore, the

high level of private vehicle-based motorization in many global urban cities in has

encouraged greater intention among road users to opt for the Grab e-hailing service

rather than take other modes of transport, such public buses or trains.

The globalization of competition, saturation of markets, and development of

information technology have enhanced customer awareness and created a situation

where long-term success is no longer achieved through optimized product price and

qualities. Instead, companies build their success on a longterm customer relationship.

Consumers all over the world have become more quality conscious; hence there has

been an increased customer demand for higher quality service. Service operations

worldwide are affected by this new wave of quality awareness and emphasis (Lee,

2004). Therefore service-based companies like the banks are compelled to provide

excellent services to their customers in order to have sustainable competitive advantage,

2
especially in the current trend of trade liberalizationand globalization. High patronage

of services depends on the satisfaction customers derived from a service. Sales are

directly related to customer satisfaction; sales increase requires improvement in the

quality of service delivery to encourage continuous patronage.

Studies reveals that after Uber entered the New York taxi market in 2011, the number of

traditional (Yellow Cab) taxi rides per hour reduced by 25%, which led to a reduction in

fare revenues for traditional taxis. In addition, the number of taxi passengers per quarter

decreased by 16 million passengers (5.3%) between 2010 and 2016 (Brodeur & Nield,

2018). In Los Angeles, immediately after the emergence of ride-hailing options, the

total number of taxi trips saw a drop of 2.4 million (30 %) between 2013 and 2016

(Nelson, 2019). San Francisco saw the same reduction in traditional taxi ridership

(65%) due to the growing use of Uber and Lyft in that market from 2012 to 2014

(Davidson, 2014).

The taxi industry in East Africa is growing in to a wide hungry market for the ride

sharing technology as a number of taxi-hailing firms have ventured into the favourable

markets offering business opportunities to the investors. The taxi industry, through the

application of the ride-sharing technology has exploded into a multi-billion-dollar

business in the past decade. The biggest names in the ride sharing business are Uber,

Taxify and Lyft (Green, 2018). Uber begins as a transportation networks company that

gives opportunities to licensed tax drivers to join and register to undertake ridesharing

services.

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Uber Tanzania was the first ride-sharing company to be established in Tanzania in 2016

and has managed to boost the income for over 1,000 taxi drivers in the country by

providing them with permanent and part-time jobs. 1 Another company, Taxify launched

its services in Dar es Salaam, Tanzania on December 2017 with hundreds of drivers

already signed up to the platforms and ready to accept rides. Since then more companies

Carpool- Tanzania, Moovn, Little Ride and Twende have joined the ride-sharing

markets in Tanzania. Uber Tanzania is also looking to joining financial institutions

including banks in effort to get then to 3 finance through loans then purchasing cars by

prospective Uber operators.2

Numerous empirical studies have confirmed that a satisfied customer will buy more and

more often in comparison to those who identify themselves as dissatisfied. To

determine a customer behavior after purchase, and to become a determinant of loyalty,

satisfactionmust be cumulative, in other words satisfaction must exist in each

transaction. Customer loyalty is frequency of service purchase repetition in the same

company, or the level ofwillingness to repeat service purchase in the same company

when a need arises (Kancir, 2007).

1.3Statement of the problem

1
https://www.uber.com/nl/ride/ as accessed on 9th January 2021 at 5:17 PM

2
https://www.exchange.co.tz/uber-expansion-planseast-africa/ accessed on 9th January 2021 at 6:02 PM

4
Extraordinarily, in the past, conventional transportation industry always highlights the

superiority of service mainly on the technical quality (what customers get such as

physical condition of public transport, the feeling of convenience, comfort, and safety)

and functional quality (how customers get it) especially during the interaction between

sellers and customers (Noor, Nasrudin & Foo, 2014).

Further to that, the likely understanding advocates that when service includes superior

technical and functional quality, customers are satisfied though at premium price

(Lymperopoulos & Chaniotakis, 2008). And, it is for that case, customer satisfaction is

further becoming complex as price fairness has been found to be its foremost basis by

ensuring the elimination of customers’ feeling of weakness (Lombart & Louis, 2014).

Previous studies, such as that of Noor, Noor et al., (2014) addressed the issues of

perceived ease of use, compatibility, relative advantage and trust of the e-hailing apps

are the main contributors of the satisfaction of the users of the apps together with their

respective norms on the intention to use and re-use over time. Additonally, Oliver

(2017) suggested that the features of the electronic hailing apps must be friendly to the

end users and easy to use to cater the expectations. However, in other studies, issues

like the relative attractiveness, reassurance, relative, and monetary value have a positive

impact towards re-use intention of e-hailing app (Vivoda& Zikmund-Fisher, 2018).

Convincingly, there is the gap that exist on the studies that examines precursors of the

factors that determine satisfaction of customers in the academic studies. Therefore, this

5
study is initiated to assess the determinant factors of customers satisfaction in ride-

hailing service in Tanzania.

1.3 Research Objectives

1.3.1 Main Objective

The main objective of the study is to assess the determinant factors of customer

satisfaction in Ride-Hailing Industry in Tanzania

1.3.2 Specific Objectives

i. To determine the impact of service quality on customer satisfaction in ride-

hailing industry in Tanzania,

ii. To assess on how monetary value influence customer satisfaction in ride-hailing

industry in Tanzania, and

iii. To establish an influence of product quality on customer satisfaction in ride-

hailing industry in Tanzania.

1.4 Research Questions

The course of this study was set to answer the following questions;

i. What are the impact of service quality on customer satisfaction in ride-hailing

industry in Tanzania?

ii. How monetary value influence customer satisfaction in ride-hailing industry in

Tanzania?

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 iii. How does product quality influence customer satisfaction in ride-hailing

industry in Tanzania?

1.5 Significance of the study

The findings of this study are significant to both academic and practical perspectives.

Academically, the results contribute to the knowledge gap on the matters pertaining to

satisfaction of customers, as well as issues relating to ride-hailing services in Tanzania

and elsewhere. On the other hand, the findings practically subsidise on the development

of the practical model that enhances conceptualization and adoptions of ride-hailing

services and ensure at most utilization of the technology. Further to that, the outcome of

this study draws keen attention to the matters that hold back the delivery of good

services and renders of satisfaction of customers.

Also, the findings will, in a broader-scale, contribute and act as a yardstick on the

relevance of the existing policies. Timely review, formulation and implementation of

policies will be supported by the findings of this study. The developed model can also

be used in other countries that have similar social and economic conditions like

Tanzania, such as the developing countries south of the Sahara Desert.

1.6 Scope/Delimitation of the study

Exploration and assessment of the determinant factors of customer satisfaction in ride-

hailing services in Tanzania involves both managerial, marketing, service delivery and

7
technological aspect on the issue of the ride-hailing platforms. Conversely, this study

only pinpointed and expounded issues relate to managerial and service delivery of Uber

Tanzania and Bolt Tanzania. Technological and technical aspects of the platforms were

of no consideration and the study has left that part to technology related researchers.

8
 CHAPTER TWO

LITERATURE REVIEW
2.1 Introduction

This chapter is set to give the definition of key terms, area of study, major debates and

competing explanations of the problem under study, empirical studies and research gap

on the matters pertaining to the determinant factors of customer satisfaction in ride

hailing services.

2.2 Definition of key terms

This section defines the key terms that are widely used in the course of this study.

2.2.1 Service Quality

There are many definitions for the term Quality defined by different authors. Quality

can be defined broadly as superiority or excellence ( Zeithaml, 1988). In literature, the

issue on how the service quality should be measured has been discussed by Teas (1993);

Brady and Cronin (2001) whereby their previous research suggests that quality is not

perceived as a one-dimensional concept by customer. But also there is no agreement

about how to access the service quality ( Cornin and Taylor, 1992).

However, this study will adopt the definition of Veljković (2009) who defined from the

customers’ perspective, quality is what a customer or a target segment considers being,

that is, the ability of a product or a service to meet or to exceed his expectations.

9
2.2.2 Customer Satisfaction

Several definitions have been offered for customer satisfaction over the past three

decades. Anderson et al. (1994) suggested two definitions of customer satisfaction, in

accordance with the two broad classes of customer experiences identified by the

literature: transaction specific experiences and cumulative experiences (Zeithaml,

2009). With a transaction-specific experience, customer satisfaction is defined as the

post-choice evaluative judgement of a specific purchase occasion. Whereas, on the other

other hand, in a cumulative experience, customer satisfaction is determined as a result

of a customer’s evaluation of his or her total purchase and consumption experience over

time.

However, this study will adopt the definition of Kotler (2000) who defined satisfaction

as a person’s feelings of pleasure or disappointment resulting from comparing a

product’s perceived performance (or outcome) in relation to his or her expectations.

2.2.3 Ride-hailing

E-hailing is an online transportation service that experiencing fast growth and has

brought a revolution into the transportation industry since the establishing of Uber in

2009 and Lyft in 2012 (Vivoda & Zikmund-Fisher, 2018). E-hailing with other names

also known as ride-hailing, ride-booking or on-demand ride deliver the same purpose in

connecting the customer’s location to the driver via Global Positioning System (GPS)

and the fare will be charged based on distance (Shaheen & Rayle, 2017). E-hailing has

10
rapidly received popularity among customers since the number of people using the

internet is growing especially in the era of digital services (Stalmašeková&Gašperová,

2017). Many terms are used to describe this emerging transportation mode, including

ride-sourcing, ride-hailing, TNC’s, e-hailing and app-based on-demand service.

On the contrary, this study will adopt a definition of Rayle and Dai (2016) who defined

ride-hailing as a transportation service that allows passengers to request a ride in a real-

time via Smartphone applications that link passengers to nearby drivers. Once a driver

accepts the request, the passenger can evaluate the waiting time and decide whether to

accept the ride. Both the passenger and the driver can use Global Position System

(GPS) navigation during the trip, and the application guides the driver to shortcuts and

less-congested roadways.

2.3 Theoretical Literature

Theoretically, this study was guided by The Dissonance Theory, The Expectancy-

Disconfirmation Paradigm which expounds on the accurate measurement of customer

satisfaction and SERVIQUAL Model which is a multi-item scale developed to assess

customer perceptions of service quality in service and retail businesses (Parasuraman et.

al., 1988).

2.3.1 The Dissonance Theory

The Dissonance Theory suggests that a person who expected a high-value product and

received a low-value product would recognize the disparity and experience a cognitive

11
dissonance (Cardozzo, 1965). That is, the disconfirmed expectations create a state of

dissonance or a psychological discomfort (Yi, 1990). According to this theory, the

existence of dissonance produces pressures for its reduction, which could be achieved

by adjusting the perceived disparity. This theory holds that "post exposure ratings are

primarily a function of the expectation level because the task of recognizing

disconfirmation is believed to be psychologically uncomfortable. Thus consumers are

positioned to perceptually distort expectation-discrepant performance so as to coincide

with their prior expectation level (Oliver, 1977). For instance, if a disparity exists

between product expectations and product performance, consumers may have a

psychological tension and try to reduce it by changing their perception of the product

(Yi, 1990). Additionally, Cardozzo (1965) argues that consumers may raise their

evaluations of those products when the cost of that product to the individual is high.

2.3.2 Expectancy-Disconfirmation Paradigm

The Disconfirmation Model demonstrates how customer satisfaction is affected by the

combination of the performance of the good/service and the customer’s level of

expectation. It posits that in cases where the performance that a customer perceives is

deemed to be greater than the expectations held, satisfaction will increase. This is

defined as positive disconfirmation. Similarly a perceived performance which is lower

than the customer’s level of expectation, will result in a decrease in satisfaction; this is

negative disconfirmation (Anderson et al. 1994; Oliver, 1993). Satisfaction is therefore

a function of the difference between performance and expectations; ie, performance -

expectations = satisfaction.
12
The Disconfirmation Model indicates a negative relationship between expectations and

satisfaction; it predicts that as expectations increase, satisfaction will decrease. These

expectations held are recognised as a standard against which performance information

is evaluated. Limitations of the Disconfirmation Model are illustrated by Cronin and

Taylor (1992), who argue that little if any theoretical or empirical evidence supports the

relevance of the expectations - performance gap as the basis for measuring service.

2.3.3 SERVQUAL Model

The most widely used model to translate theories of customer satisfaction into

management practice is that of SERVQUAL (Soutar, 2001). In this model service

quality is defined as the difference between customer expectations and customer

perception of service received. The gap in service quality occurs when the perception of

service received is less than what is expected (Zeithaml et al, 1990).

However, SERVQUAL has been challenged on several grounds (Fick & Ritchie, 1991;

Johns, 1996, Bennington &Cumane, 1998). In accordance with generally accepted scale

construction, half of the statement sets were worded negatively. In one study (Fick

&Ritchie, 1991) the mean scores for dimensions worded negatively were lower for

every service segment than were the mean scores for the positively worded dimensions.

This was also the case with the original SERVQUAL model in all but one case. It is

concluded that consumers become confused or less likely to answer at the extreme ends

if the scale when responding to negatively worded statements. Also, respondents have a

13
tendency to respond systematically in the affirmative in many situations, the so-called

acquiescence response set.

2.4 Empirical Literature

Mistri and Bhatt (2013) tried to investigate the attributes that influence perception of

consumers towards service quality of hypermarkets in Ahmedabad City, Gujarat. The

study utilized Retail Service Quality Scale (RSQS) of Dabholkar, Thorpe and Rentz

(1996) which measure on the physical aspect, reliability, personal interaction, problem

solving, and policy. The study comprised of 240 active retail shoppers by using

convenience sampling and analyzed using factor analysis. The findings revealed that the

results do not support the five dimensions that proposed by the Dabholkar et al., (1996),

as the analysis gave eight dimensions. Based on the discussion, it has urged the

management of the retail shoppers still can apply the five (5) dimensions as the

foundation in improving the service quality of retail stores, however, when the countries

developed, the behavior of the consumers will also change accordingly, whereby

consumer may consider the intangible aspects more prominently in service quality.

According to Tran Van Quyet, and Taikoo Chang (2015), Service Quality Effects on

Customer Satisfaction in Banking Industry in Vietnam. The study shows that

association between the Service quality and Customers, According to the effects of the

study, customer fulfillment with deposit services of banks depended on then external

issues: Tangibility had the highest result that Services and equipment also affected

operations of banks, suggesting that banks that lag behind or are less developed are less

14
likely to customers. Empathy hierarchical second factor telling that, to invite customers,

banks must not single recover the excellence of their usefulness services and products

but also make better use of a manual commercial values such as buyer relationship with

bank staffs.

Additionally, Ame (2011) in his research on the effects of quality on satisfaction and its

consequences on customer behavioral intentions suggests that a high level of perceived

quality is a good strategy for enhancing customers‘ behavioral intentions and finally

leading to high profits which means continuous survival for service firms. Customer

satisfaction is the leading criterion for determining the quality actually delivered to

customers.

Shahneaz and Salma (2013) aim to examine the customer satisfaction of service quality

at Mega Shops of Dhaka city. The findings of the regression analysis shown tangible,

customer knowledge, and competence has a significant effect on overall customer

satisfaction, however, responsiveness does not showed significant relationship with the

overall customer satisfaction of retail stores. Based on the discussion, it has called upon

the management of the retail store to improve on the responsiveness and main the other

attributes of service quality. This is because service quality serves as a marketing tool in

differentiating the company and its rivals.

Relating to monetary aspect, the study by Samuel (2006) in Nigeria to investigate the

customer satisfaction of mobile telecom industry, the factors that influence customer

satisfaction and relationship between customer satisfaction and demographic variables

15
in Nigeria, Lagos State, Lagos Island and Mushin and in Ikenja. The study used

convenience sampling (non- probability sampling) and total of 400 people were

interviewed. The data collected was analyzed with the Statistical Package for Social

Science (SPSS) where by descriptive statistics (frequency distribution) was used. The

study showed that customer satisfaction 14 increases with the improvement of the

mobile service attributes. I.e. call quality, coverage, reasonable pricing and discounts,

customer care and reasonable validity period of product. Study also showed that

demographic variables i.e. gender, age, status of employment and location have a weak

influence on customer satisfaction.

In relation to the service sector, Oduro (2013) investigated factors that determine

customer satisfaction level in banking services from Ghanaian banking industry.

According to his study using factor analysis, it was found that three factors which

include customer relation and services, staff competency as well as responsiveness and

convenience to be among factors influencing consumers’ satisfaction level.

Seyoum (2012) on the other hand conducted a study on customer service quality in

Addis Ababa-Ethiopian Electricity Power Corporation (EEPCO) with emphasis on

prepayment service quality by comparing customers’ perception of the received service

against their expectation using SERVQUAL as a methodological approach. The study

found that there were a substantial gap between customers’ expectations and that of the

service received which adversely affected the overall customer service experience with

the corporation. Significantly the unfavourably held view of the customers on the

16
corporations’ quality of services delivery was also shared among employees who

actually are involved in the process of delivering services.

Furthermore, Selvabaskar and Shanmuga (2015) carried out a study to investigate the

customer satisfaction of a fashion apparel retail in Chennai, India by using the

SERVQUAL model. The results of the study shown that most of the customers are

satisfied with most of the SERVQUAL dimensions. In addition, the analysis shows that

there is a weak and positive relationship between income and quantity of purchase.

Another study by Hanif et al., (2010) research has explored price as the factor that

affect the customer satisfaction. In this research paper telecom sector’s subscribers in

Pakistan are taken as population and customer services and price fairness are taken as

independent variables while customer satisfaction is taken as dependent variable. It was

decided to collect at least 150 questionnaires to support to come at reasonable

conclusion therefore, 250 questionnaires were floated among subject using non-

probability convenience sampling method and collected data was analyzed by using

correlation and regression analysis. Price fairness has a greater influence on the

customer satisfaction and if price is affordable for customer they do use that network for

a long period of time. In the same way if customers are delivered with worthy services

i.e. good behavior of sales personnel, prompt fulfillment of customer’s complaint etc.

they feel belongingness with that network. However results of this study showed that

price fairness has a stronger influence of customer satisfaction as compare to customer

17
service. This study was based in Pakistan; however the similar study will be based in

Tanzania to assess whether the same results will be obtained.

Additionally, Mukhtar et al. (2014) came up with documentation on customer

satisfaction through usage of correlation analysis to check the intensity of relation of

customer satisfaction with dimensions of service quality. These dimensions of service

quality included reliability, assurance, responsiveness, empathy and tangibility. The

study found that service quality is positively correlated with customers’ satisfaction.

Significantly the most important variable that affects customer satisfaction was

tangibility, which is followed by 14 assurance. Regression equation derived from

regression analysis showed that only assurance and tangibility has significant

correlation with customer satisfaction, but reliability, empathy and responsiveness have

less important relationship with customer satisfaction. Utility companies including

electric power suppliers utilize their assets in right direction, providing better tangibility

and assurance to customers about their services.

Luximon and Chan (2017) aimed to investigate the expectation of service quality and

cultural diversity in Hong Kong fast fashion industry. The service quality expectation

comprised of physical aspect, reliability, personal interaction, problem solving, and

policy. The findings confirmed the importance of cultural factors in shaping service

quality of consumers.

Based on the discussion, every customer will have different expectations and

preferences on the services provide by the retailers, hence, the fashion retailers should

18
understand the customers’ expectation in order to stay competitive advantage among its

rivals.

2.5Research Model

This study usedthe partial least squares path modeling or partial least squares structural

equation modeling (PLS-PM, PLS-SEM)which is a method of structural equation

modeling which allows estimating complex cause-effect relationship models with latent

variables.

The study assumes and explains the determinant factors of customer satisfaction in ride

hailing services relating it with three independent variables. The relationship further

explains that customer satisfaction is basically attributed with the inclusion of the

quality of service, monetary value of the service, a set of details for quality of product.

The relationship of the stated variables can be formulated as follows;

f(QS ᴧ MV ᴧ QP)→CS

Whereas;

CS represents the dependent variable which signifies Customer Satisfaction; QS

represents independent variable which signifies Quality of Service provided by the

firm; MV represents independent variable which signifies Monetary Value of the

Service provided; QP represents independent variable which signifies Quality of

product.

19
2.6 Conceptual Framework

The relationship of the variables of the study can be conceptualized by the following

framework;

Figure1. 1: Conceptual Framework

Predictor Variables Outcome Variable

Quality of Product
Reliability
Assurance
Responsiveness

Monetary Value
Customer Satisfaction
Price
Effectiveness
Efficiency

Quality of Service
Great Conversation and
Compassion
Candies and delicies
Vehicle Cleanliness

20
2.7 Research Gap

Researches on quality of services and satisfaction of customers are several. Previous

studies have struggled to pinpoint important things regarding the influence that quality

of services has on the satisfaction of customers specifically in ride-hailing services.

Most of reviewed studies have strived to show the importance of introduction of the

technology and its adoption. Reviewed studies have confined on a single area but on

different focus. For example, the study by Henao and Marshall (2017) focused on

factors that necessisates the introduction of ride-hailing service which are low cost of

transportation, lower fuel consumptions, reduce carbon emissions, and beneficial for

mitigate traffic congestions, while that of Axsen and Sovacool (2019) focused on

reliability, privacy threats and concerns for personal safety of riders in ride-hailing

services.

Altogether had similar focus but the failed to achieve the clearest intervention of quality

of servie and satisfaction of customers specifically in ride-hailing services. This

observation wants to show the knowledge gap that still exists regarding the information

about the subject at hand. Previous studies did not show how elements of service such

as quality influence satisfaction of rider in clear manner. However, as long as

knowledge gap still exits, this study envisaged filling it by focusing on the determinants

of service quality and satisfaction of customers in ride-hailing services in Tanzania.

21
 CHAPTER THREE

RESEARCH METHODOLOGY
3.1 Introduction

This chapter will state the design of the study that will be investigated, samplesizeand

sampling methods and procedures, source of data and collection methods and data

processing and analysis.

3.2 Research Design

The study, in this context, will make a good use of Descriptive Case Study Research

Strategy. This approach is expected to show the determinantof customer satisfaction in

ride-hailing industry in Tanzania. With the support of past studies, this design will

provide a wider room to explore and understand in depth about the issues of service

quality,product quality, monetary value and customer satisfaction in ride-hailing

industry.

3.3 Area of Study

This study will be conducted in Dar es Salaam, Tanzania. Respondents will be riders

and drivers of Uber and Bolt based in Dar es Salaam. Uber main offices located at Viva

Towers Floor 1, Ali Hassan Mwinyi Road and Bolt main offices located at House no. 4

Uzima Street, MikocheniKwaNyerere, Dar es Salaam. The study area is chosen due to

the fact that it is the latest city in East Africa where Uber and Bolt has launched

22
services. The other cities which recently started offering this service are Nairobi,

Mombasa and Kampala.

Further to that, Dar es Salaam is the largest city and economic capital of Tanzania.

Located in a quiet bay off the Indian Ocean coast, the city has developed into an

economic importance to become a prosperous center of the entire East African region.

Its bustling harbor is the main port in Tanzania. Its industrial area produces products for

export and use throughout the country.

Before shifting of administrative offices, Government offices used to have their main

base in Dar es Salaam, and diplomatic missions and non-governmental organizations in

the country all have a presence in the bustling urban city.

3.4 Sample and Sampling procedures

All groups of individuals in Dar es Salaam and drivers’ community of Tanzania at large

constitute an important part of population for this study, although it will not be possible

to study the whole population at once, especially, if you make reference to the time, and

other issues that may hamper the successful accomplishment of the study.

The study will make a good use of Yamane’s formula to determine its sample size. The

formula is as follows;

N
n=
1+ N (e)²

Whereby;

23
n is the sample size to be determined; N is the selected population, which is 9000; and

e is the level of precision or sampling of error; which is normally expressed in

percentage from ±5% to ±10%. However, for the case of this study, the level of

precision was ±10%.

Therefore;

9000
n=
1+ 9000(10 %)²

This was equal to say;

9000
n=
1+ 9000(0.01)

Therefore;

n=99

But, since the level of precision or sampling error was ±10%, 1 respondent was added to

make a total of 100 respondents.

Therefore, the study used a sample of 100 respondents out of the population of 9000

riders and drivers. However, 10 officials from staff of Uber and Bolt were added to

make a total number of 110 respondents.

24
3.5 Sampling techniques

3.5.1 Systematic sampling

Systematic sampling method was used to obtain100 respondents among the riders and

drivers. Systematic sampling is fairly easy and widely used for its convenience, time

efficiency, and provides more precise estimates. Respondents that were selected using

this sampling method were given questionnaires to gather the information pertaining to

the determinant factors of customer satisfaction in ride-hailing services in Tanzania.

3.5.2 Purposive sampling

Purposive sampling method was used to obtain 10 out of 110 respondents. Basically,

principals and top management team were obtained by using purposive sampling

method. These 10 respondents were consulted for data gathering due to the fact that

they are most likely to give the best picture on the determinant factors of customer

satisfaction in ride-hailing services in Tanzania.

25
3.6 Sources of data and collection methods

This study used both primary and secondary data. Primary data will be collected

through questionnaire and interviews while secondary data were gathered from

documented and published sources including internet, reports and journals.

3.6.1 Questionnaires

The study used both open and close-ended questions for data collection to test research

hypotheses presented earlier in chapter one. This method was used to obtain data and

relevant information from the riders of Uber and Bolt Tanzania. The questionnaires had

2 major sections: The first section will be about the personal information of the

respondents; and, the remaining section contained various questions to collect primary

data about the independent variables of this research. The use of questionnaire is

reasonably easy because it allows respondents to be free in giving out their views on

statements about the key variables of the study at hand.

26
3.6.2 Interview

Interviews are used to collect first-hand information and obtain key information. For the

case of this study, Interviews were conducted to the management of Uber and Bolt

Tanzania to explore data and information from respondents where necessary in order to

compliment the questionnaires. Interviews are useful because they give out an access

for the first-hand information to be gathered and enables face to face contact with

respondents, thus, if done properly, ensure the quality and reliability of the information.

3.7 Data processing and analysis

The study used both descriptive and inferential data analysis to come up with findings

and derive conclusions.

3.7.1 Descriptive analysis

After being gathered, descriptive data will be analysed through descriptive analysis. The

analysis was used to find absolute number to summarize individual variables and find

pattern. Stata software was used to analyse descriptive analysis.

3.7.2 Inferential analysis

Inferential statistics was used to show the relationship between multiple variables and

make predictions. For purposes of analysis, Pearson correlation and regression analysis was

used in testing the hypothesis.

H0: Inclusion of quality of product, monetary value and quality of service determine

customer satisfaction in ride hailing industry in Tanzania.

27
 H0: [Qp ᴧ Mv ᴧ Qs] → Cs

Whereas:

- Qp is an independent variable representing Quality of Product

- Mv is an independent variable representing Monetary Value

- Qs is an independent variable representing Quality of Service

- Cs is a dependent variable representing Customer Satisfaction

To test the composite hypothesis (H0: [Qp ᴧ Mv ᴧ Qs] → Cs), each independent variable

was tested separately (for example H1: Qp→ Cs). Since the questionnaires used a Likert

Scale, Microsoft excel was used to analyze data for the inferential analysis.

3.8 Research Paradigm/Philosophy

This research used a Positivism research philosophy which wishes to work with

noticeable social reality and that the final product of such research can be law-like

generation comparable to those produced by physical and natural scientist. This

philosophy stands on the clue that only phenomena which one observes it brought into

the production of the true information. In order to produce a research strategy for data

28
collection, the researcher applied the existing theory to develop hypotheses which later

tested and confirmed leading to further expansion of research and theory.

3.9 Trustworthiness of the data

In each study, researchers should establish the protocols and procedures necessary for a

study to be considered worthy of consideration by readers (Amankwaa, 2016).

Trustworthiness or rigor of a study refers to the degree of confidence in data,

interpretation, and methods used to ensure the quality of a study (Pilot & Beck, 2014).

Anney (2014) and Gay, Mills and Airasian, (2012) maintain that the trustworthiness of

qualitative study can be recognized by taking into account four important strategies

namely: credibility, transferability, dependability and conformability.

3.9.1 Credibility

Credibility is defined as the confidence that can be placed in the truth of the research

findings (Macnee & McCabe, 2018). Credibility establishes whether or not the research

findings represent plausible information drawn from the participants’ original data and

is a correct interpretation of the participants’ original views (Graneheim & Lundman,

2014).

3.9.2 Transferability

Anney (2014) postulated that transferability emphasizes the generalization of the

research findings. It refers to the degree to which the results of qualitative research can

be generalized or transferred to other contexts or settings (Yin, 2013). For this study,

29
researcher will enhance transferability by doing a thorough job of describing the

research context and the assumptions that were central to the research.

3.9.3 Dependability

Saumure & Given (2018) recommended that dependability can be addressed by

providing a rich description of the research procedures and instruments used so that

other researchers may be able to collect data in similar ways. In addition, researchers

may address dependability by conducting a new study on participants with similar

demographic variables, asking similar questions and coding data in a similar fashion to

the original study (Yin, 2013). Therefore, it can be inferred from the above that clearly

stating the demographic of the variables and research questions used to collect data and

the coding techniques should be explained clearly. In this study, therefore, to ensure

reliability: the interview procedure (the timing, content, etc.) and the data analysis

process will be discussed clearly; the profile of interviewees will be explained in detail;

the interview questions that will be used to collect the data from interviewees will be

clearly prepared and incorporated in the annex part of the report; and during the data

collection process, efforts will be made to reduce errors and bias. In this regard, before

closing the interview sessions, the researcher will try to check the accuracy of the data

by discussing the points taken on the note with the participants and getting their

feedbacks.

30
3.9.4 Confirmability

Confirmability refers to establishing correct operational measures for the concepts in

both quantitative and qualitative studies (Yin, 2013). In other words, the researcher

should ask the question: ‘am I truly measuring /recording what I intend to measure

/record rather than something else?’ (Tashakkori and Teddlie, 1998). For this study,

researchers will address conformability through the use of multiple coders,

transparency, audit trails, and member checks.

3.10 Ethical Consideration

Research ethics deals primarily with the interaction between researchers and the people

they study (Gay, Mills & Airasian, 2012). The researcher will adhere to some ethical

issues and considered them useful during data collection processes. These aspects are:

3.10.1 Research permit

Wiles (2021) views research permit as a central concept in ethical research practices and

is one of the key principles underpinning professional guidelines for social scientists.

Getting permission to conduct study provides the research legitimate and decreases

possible obstacles to carry it out. The research obtained the research clearance from the

Vice Chancellor of the University of Dar es Salaam and from respective institutions.

3.10.2 Participants’ informed consent

31
Informed consent is a mechanism for ensuring that people understand what it means to

participate in a particular research study so they can decide in a conscious, deliberate

way whether they want to participate (Anney, 2014). The researcher will inform the

participants about the reason by providing fair and full explanations of the research

problem, purpose and objectives of the study. Further, respondents will be given a

chance to participate voluntarily while all other ethical principles will be taken care off.

Individual will choose whether or not to participate in the study after being informed the

purpose of the study.

3.10.3 Confidentiality

Conversation is a social act that requires give and take, and, because qualitative research

is conversational, it is important for data collectors to maintain clear boundaries

between what they are told by participants and what they tell to participants (Creswell

& Plano-Clark, 2017). In that regard, the respondents will be assured of total privacy

and confidentiality of the information which they will provide by informing them the

purpose of the study will be just for academic use only and that all information which

will be collected will be stored safely in such a way that no any individuals who are not

authorized will access the information.

3.10.4 Anonymity

Creswell and Plano-Clark (2017) refers anonymity to collecting data without obtaining

any personal, identifying information. Participants in the study have the right to

anonymity; they have their identities kept anonymous. In order to ensure anonymity, the

32
researcher will keep the respondents’ answers private when presenting the findings of

the study. No names willl be requested during interview and questionnaires sessions.

3.10.5 Harm to participants

Polit and Beck (2014) emphasizes that the principle of ‘no harm’ to participants ought

to be considered by researchers, who should be aware of the potential harms that might

be inflicted upon study subjects. In this study, the researcher will ensure participants’

defense from any kind of harm, psychological and physical by not asking sensitive and

private issues. Even if the researcher will be informed on sensitive issues still the

researcher will let the respondents know that these issues remained secret.

33
 CHAPTER FOUR

FINDINDS AND DISCUSSION

4.1 Introduction

This chapter is set to give the findings of the study. It is divided into two major

categories. The first category explains the socio-characteristics of the respondents.

Basing on the nature of the consulted respondents of this study; gender, level of

education and age of respondents are described in this category. The second category is

that which explain the findings of each of the objectives pertaining to the determinant

factors of customer Satisfaction in ride-hailing services of Uber and Bolt in Tanzania .

4.2 Demographic characteristics of respondents

The study intended to seek opinions of respondents from and with different socio-

cultural origin. However, only gender, level of education, and age of respondents was

assessed by this study. The following was the distribution of respondents basing on

gender, level of education, and age of respondents

4.2.1 Gender of respondents

The researcher was able to reach both male and female respondents. Male respondents

constituted 47% of all the respondents while Female constituted the remained 53% of

all respondents. The distribution is illustrated with the aid of Table 4.1 below.

34
Table4. 1: Gender of respondents

Gender of
respondents Freq. Percent Cum.

Male 47 47.00 47.00

Female 53 53.00 100.00

Total 100 100.00

4.2.2 Level of education of respondents

More often there are clear differences in opinion between respondents with a different

educational level. This study intended to seek opinions from riders of Bolt and Uber

Tanzania. Basically, respondents with ordinary secondary education comprised 2% of

all respondents while those with advanced secondary education consisted 5% of all

respondents. On the other hand, diploma holders consisted 14% of all respondents

whereas the remaining 79% have undergraduate degree and above. The table 4.2 shows

a distribution of respondents as per their level of education.

Table4. 2: Level of Education of Respondents

Level of Education Freq. Percent Cum.

Ordinary Secondary 2 2.00 2.00

Advanced Secondary 5 5.00 7.00
Diploma 14 14.00 21.00
Undergraduate Degree and above 79 79.00 100.00

Total 100 100.00

35
4.2.3 Age of respondents

The study intended to reach respondents with age that ranges from 18-30, 31-40, 41-50

as well as those with 51-60 years. However, the study covered large number of

respondents (59%) with the age that ranges from 18-30 years followed with 36% who

has 31-40 years. However, respndents with the age of 41-50 consisted of 4% of all

respondents while the remaining 1% consisted with respondents who has 51-60

years.The table 4.3 shows a distribution of respondents as per age groups.

Table4. 3: Age of Respondents

Age_of_resp
ondents Freq. Percent Cum.

18-30 59 59.00 59.00

31-40 36 36.00 95.00
41-50 4 4.00 99.00
51-60 1 1.00 100.00

Total 100 100.00

4.3 Presentation of findings

This section aimed at assessing the determinant factors of customer satisfaction in ride-

hailing industry in Tanzania. The findings are analyzed and discussed basing on the

objectives of the study which are determination of the impact of service quality on

customer satisfaction, assessment on how monetary value influence customer

36
satisfaction, as well as establishment of an influence of product quality on satisfaction

of customer of Uber and Bolt Tanzania.

Moreover, the study used an estimated mean of each of the assumed variable. The mean

was used to determine the weight of each of the pre-mentioned variables of the

information obtained from the field. Furthermore, for the case of this study, researcher

considered the response with the highest mean as the highly selected and nominated

response, and, hence, the conclusions were drawn basing on the average of each of the

response.

Likewise, as the study also used correlation to find the t-values and validate the

predictions of the variables, the researchers considered and draw conclusion basing on

the set base value of t-value among the variables of the study at hand. Stata 3 was used to

manipulate and analyze the quantitative data.

4.3.1 The Impact of Service Quality on Customer Satisfaction

The study examined the impact that service quality has on customer satisfaction. This

objective has been answered by the question in the questionnaire that requested the

respondents to tick only one number for the effect that best express their opinion. The

weight was categorized into the following;

1. Very Low 2. Low 3. Medium 4. High 5. Very High

Basically, considering the estimated average of selection of each of the prior-mentioned

opinion, the study found out vehicle cleanliness as the most factor of service quality that

3
Stata is a complete, integrated software package that provides all your data science needs—data
manipulation, visualization, statistics, and reproducible reporting.

37
has major impact on customer satisfaction as it was nominated with an average of 3.81

of all respondents (see table 4.4). That was followed amenities of the vehicle with an

average of 3.72 of all respondents and great conversation with the driver with an

average of 3.63 of all the respondents. Apparently, an average of 2.48 respondents

considered availability of candes and delicacies to have an impact on customer services

in ride-hailing in Tanzania. The table below show the Stata generated estimation of

mean variable;

Table4. 4: Mean estimation for the impacts that service has on Customer
satisfaction in ride-hailing industry

Mean estimation Number of obs = 100

Mean Std. Err. [95% Conf. Interval]

Great_conversation 3.63 .0949801 3.441539 3.818461

Candies_and_refreshments 2.48 .1374222 2.207325 2.752675
Vehicle 3.81 .0981598 3.61523 4.00477
Amenities 3.72 .1054859 3.510693 3.929307

Hence, the study found out that, in terms of service quality, cleanliness of the vehicle

has major impact on satisfaction of customers in ride-hailing services in Tanzania

considering Uber and Bolt Tanzania.

38
4.3.2 Influence of Monetary value on Customer Satisfaction

Furthermore, the study examined the influence that monetary value has on customer

satisfaction. This objective has been answered by the question in the questionnaire that

requested the respondents to tick only one number for the effect that best express their

opinion. The weight was categorized into the following;

1. Very Low 2. Low 3. Medium 4. High 5. Very High

Essentially, considering the estimated average of selection of each of the prior-

mentioned opinion, the study found out riders considers the effectiveness of the ride-

hailing process to have an influence rather than monetary value on customer satisfaction

as it was nominated with an average of 3.83 of all respondents (see table 4.5). That was

followed by a price that the riders pays on ride-hailing with an average of 3.74 of all the

respondents. However, an average of 3.71 of all respondents considersefficiency of the

system used to enable commuting to have an influence on customer services in ride-

hailing in Tanzania. The table below show the Stata generated estimation of mean

variable;

Table4. 5: Mean estimation for the influence that monetary values has on customer
satisfaction in ride-hailing

39
Mean estimation Number of obs = 100

Mean Std. Err. [95% Conf. Interval]

Price 3.74 .1050445 3.531569 3.948431

Efficiency 3.71 .0956583 3.520193 3.899807
Effectiveness 3.83 .0865209 3.658324 4.001676

For that case, the study found out that, in terms of monetary value, customers are highly

satisfied with the effectiveness of the ride-hailing process. Thus, riders might be willing

to pay a slight amount if they are assured the effectiness of ride-riding process. This

result confirms with the one of the respondents who said that:

“In Tanzania, there is a slight difference of price in Uber and Bolt comparatively.

Uber has a reative higher price compared to that of Bolt. However, people still prefer

Uber due to the effectiveness of the ride-hailing proccesses.”

4.3.3 Influence of Product Quality on Customer Satisfaction

Moreover, the study examined the influence that product quality has on customer

satisfaction. This objective has been answered by the question in the questionnaire that

requested the respondents to tick only one number for the effect that best express their

opinion. The weight was categorized into the following;

1. Very Low 2. Low 3. Medium 4. High 5. Very High

For all intents and purposes, considering the estimated average of selection of each of

the prior-mentioned opinion, the study found out riders considers the responsiveness of

the ride-hailing system (application) to have an influence on customer satisfaction as it

40
was nominated with an average of 3.94 of all respondents (see table 4.6). That was

followed by the reliability of ride-hailing system with an average of 3.91 of all the

respondents. Nevertheless, an average of 3.88 of all respondents considers assurance of

the system to have an influence on customer services in ride-hailing in Tanzania. The

table below show the Stata generated estimation of mean variable;

Table4. 6: Mean estimation for the influence that product quality has on customer
satisfaction in ride-hailing

Mean estimation Number of obs = 100

Mean Std. Err. [95% Conf. Interval]

Reliability 3.91 .0911154 3.729207 4.090793

Assurance 3.88 .0856113 3.710129 4.049871
Responsiveness 3.94 .083871 3.773582 4.106418

Consequently, the study found out that, customers are highly satisfied with the

effectiveness of the ride-hailing system (application). Thus, riders are highly satisfied if

they areconfidentof the responsiveness of ride-riding system. This result confirms with

the one of the respondents who said that:

“Initially, there were some technical faults that led to unresponsiveness of Bolt-

Tanzania. Unresponsiveness caused massive migration of the riders from Bolt and

some of few and small ride-hailing systems (applications) to Uber because they were

not satisfied with unresponsiveness of the stsyem.”

41
4.4 Further Analysis and Discussion

Nevertheless, in order to validate the findings and to draw conclusion the researcher run

and conducted a linear regression analysis to test the hypotheses and specification of

research model.

4.4.1 The Impact of Service Quality on Customer Satisfaction

The coefficient analysis of factors tha twere used to determine the impacts that service

quality has on customer satisfaction in ride hailing in Tanzania shows that there is

strong positive correlation of 0.628 with variablity of 39.4% as shown on table 4.7. the

findings of the study confirms with the fact that Parasuraman and Zeitham (1988)

introduced the SERVQUAL model that consisted of five dimensions of reliability,

responsiveness, assurance, empathy and tangibles. The model conceptualizes service

quality to be the comparison between expectation and perception relating to these five

dimensions. Previous studies have shown that there is a link between service quality and

customer satisfaction (Curry & Sinclair, 2002; Van der Wal, Pampallis & Bond (2012)).

Moreover, prior studies such as Brady et al. (2015), Bei and Chiaco (2016) and Cronin,

Brady and Hult (2010) all agreed that there is a direct impact between service quality

and customer loyalty and an indirect impact between service quality and customer

loyalty through customer satisfaction.

42
Table 4.7 Statistical Results and Correlation Matrix for The Impact of Service

Quality on Customer Satisfaction

Influence of Service Quality on 1 2 3 4 5 r r2

Customer Satisfaction: Qs → Cs
Great Conversation and Compassion 1 4 2 3 4 0.3761 14.1%

Candies and Refreshments 1 7 2 2 4 0.3796 14.4%

Vehicle Cleanliness 2 11 08 12 13 0.810 65.6%

Amenities of the vehicle 3 8 2 4 7 0.1869 3.5%

Total Response 7 30 14 21 28
Average Response 2 8.6 20.5 16.6 2.3
Percentage of Response 7% 30% 14% 21% 28%
Coefficient of Correlation (r) 0.628
Coefficient of Determination (r2) 39.4%

Source: Field data, 2021.

Further to that, table 4.7 shows that the study found a correlation of 0.3761 and

variability of 14.1% depicts that there is moderate relationship between great

conversation and compassion and customer satisfaction. Also, the study found that there

is a correlation of 0.3796 and variability of 14.4% between Candies and refreshments

and customer satisfaction while on the other hand, there is a correlation of 0.81 and

variability of 65.6% between vehicle cleanliness and customer satisfaction. That depicts

that riders are highly satisfied when they ride into clean vehicles.

43
4.4.2 Influence of Monetary value on Customer Satisfaction

The study intended to assess the influence that monetary value has on customer

satisfaction. The coefficient that were used to assess the influence shows that there a

correlation of 0.498 and variability of 24.8%. the findings depicts that there is strong

positive relationship between monetary value and customer satisfaction. The finding of

the study conforms with that of Hume and Mort (2018) who suggested that value or

price quality is a determinant of customer satisfaction. It is similar to the findings of

[28] indicating that value was a strong predictor of customer satisfaction. On the other

hands, the result shown by Dodds and Monroe (2011) suggested that customers’

perceptions of value describe a trade-off between the benefits they gain from a

product/service relative to the sacrifice they perceive by paying the price.

Table 4.8 Statistical Results and Correlation Matrix for influence of Monetary

Value on Customer Satisfaction

Influence of Monetary Value on 1 2 3 4 5 r r2

Customer Satisfaction: Mv → Cs
Price 0 3 28 15 4 0.277 7.5%
Effectiveness 8 13 21 20 38 0.399 9.6%
Efficiency 1 1 19 26 3 0.307 15.3%

Total Response 5 38 17 160 26

Average Response 0.6 4.8 21.4 20 3.3
Percentage of Response 1.3% 9.5% 42.8% 40% 6.5%
Coefficient of Correlation (r) 0.498
Coefficient of Determination (r2) 24.8%

Source: Field data, 2021.

44
Table 4.8 depicts a correlation of o.277 and variability of 7.5% between price and

customer satisfaction. Thus, there is weak positive correlation between the two. Further

to that, the study show tha there a correlation of 0.399 and variability of 9.6% between

effectiveness and customer satisfaction which means there is also a weak correlation

between effectiveness of the ride hailing process and satisfaction of customers. Lastly,

the study found a correlation of 0.307 and variability of 15.3% between efficiency and

customer satisfaction, which means that there is weak positive relationship between

efficiency of ride hailing system to the satisfaction of customers.

4.4.3 Influence of Product Quality on Customer Satisfaction

The coefficient analysis of factors thatwere uses to determine the influence that product

quality has on customer satisfaction in ride hailing in Tanzania showsthat there is strong

positive correlation of 0.506 with variablity of 25.6% as shown on table 4.9.Meanwhile,

Jahanshahi et al. (2011) and Brucks et al. (210) proves that the quality of a product felt

by consumers is a factor that influences customer satisfaction. Etemat-Sajadi & Rizzuto

(2013) argues that product quality has a positive effect on customer satisfaction.

Additionally, some researchers also argue that not only product quality does influence

satisfaction level but also customer loyalty, as proven by Bei & Chiao (2016).

Jahanshahi et al. (2011) also indicates that the majority of loyal customers are those

who use high quality products. This implies that higher product quality tends to lead to

strengthen customer loyalty.

45
Table 4.9 Statistical Results and Correlation Matrix for The Impact of Service

Quality on Customer Satisfaction

Influence of Product Quality on 1 2 3 4 5 r r2

Customer Satisfaction: Qp → Cs
Reliability 22 35 24 12 7 0.115 1.3%
Assurance 0 16 25 5 4 0.462 21.3%
Responsiveness 10 8 27 21 34 0.677 45.8%

Total Response 32 59 76 38 45
Average Response 1.3 9.5 21 16.1 2.1
Percentage of Response 10% 6% 18% 49% 17%
Coefficient of Correlation (r) 0.506
Coefficient of Determination (r2) 25.6%

Source: Field data, 2021.

Table 4.9 reveals that there is a correlation of 0.115 and variability of 1.3% between reliability

and customer satisfaction which means that there is weak positive relation between the two.

Further, the study found a correlation of 0.462 and variability of 21.3% between assurance of

the system and customer satisfaction which pinpoints that there a strong positive relation

between assurance of ride hailing process and system and customer satisfaction. Lastly, the

study found a correlation of 0.677 and variability of 45.8% that shows a strong positive

relationship between responsiveness of the system and customer satisfaction

4.4.4 Summary of the Findings: Testing the Composite Hypothesis

H0: [Qp ᴧ Mv ᴧ Qs] → Cs

There is a strong positive relationship quality of service, quality of product and

monetary value in customer satisfaction in ride hailing industry in Tanzania with

coefficient of correlation of 0.5523 when all the independent variables are combined

46
together as shown on table 4.7 and variability of 30.5%. The three conventional

variables (service quality, monetary value as well as product quality market) when all

worked together will ensure customer satisfaction in ride hailing in Tanzania.

Table 4.10: Statistical Results and Correlation Matrix for Combined Variables

H0: [Qp ᴧ Mv ᴧ Qs] → Cs 1 2 3 4 5 r r2

Quality of Product 2 8.6 20.5 16.6 2.3 0.506 25.6%

Monetary Value 0.6 4.8 21.4 20 3.3 0.498 24.8%
Quality of Service 1.3 9.5 21 16.1 2.1 0.628 39.4%

Total Response 4.9 30.4 84.9 91 39

Average Response 0.98 6.08 16.98 18.2 7.8
Percentage of Response 2% 12% 34% 36% 16%
Coefficient of Correlation (r) 0.5523

Coefficient of Determination (r2) 30.5%

Source: Field data, 2021.

47
 CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter presents the summary of key data findings, conclusions drawn from the

findings highlighted and policy recommendations that were made. The conclusions and

recommendations drawn were in quest of addressing research objectives of the

determinant factors of customer satisfaction in ride-hailing in Tanzania.

5.2 Summary of findings

The study summarizes the findings as follows;

5.2.1 The Impact of Service Quality on Customer Satisfaction

The study found out that,in terms of service quality, cleanliness of the vehicle has major

impact on satisfaction of customers in ride-hailing services in Tanzania considering

Uber and Bolt Tanzania.

5.2.2 Influence of Monetary value on Customer Satisfaction

The study found out that, in terms o monetary value, customers are highly satisfied with

the effectiveness of the ride-hailing process. Thus, riders might be willing to pay a

slight amount if they are assured the effectiness of ride-riding process.

48
5.2.3Influence of Product Quality on Customer Satisfaction

The study found out that, customers are highly satisfied with the effectiveness of the

ride-hailing system (application). Thus, riders are highly satisfied if they are confident

of the responsiveness of ride-riding system.

5.3.1 The Impact of Service Quality on Customer Satisfaction

The study found out that, cleanliness of the vehicle has major impact on satisfaction of

customers in ride-hailing services in Tanzania considering Uber and Bolt Tanzania.

Thus, riders are highly satisfied when rides in a well cleaned vehicles. For that case,

Uber and Bolt Tanzania should conduct a vehicle status check to determine the

cleanliness of the vehicles.Apparently, for the drivers, results of the study urges them to

maintain cleanliness of their vehicles in order to satisfy riders.

5.3.2 Influence of Monetary value on Customer Satisfaction

The study found out that, customers are highly satisfied with the effectiveness of the

ride-hailing process. Thus, riders might be willing to pay a slight amount if they are

assured the effectiness of ride-riding process. For the riders, in order for them to realize

the value for money, there must be a smooth process of requesting, picking up, riding

and dropping off.

5.3.3 Influence of Product Quality on Customer Satisfaction

49
The study found out that, customers are highly satisfied with the effectiveness of the

ride-hailing system (application). Thus, riders are highly satisfied if they are confident

of the responsiveness of ride-riding system. This draws attentions to the technical as

well as research and development teams of Uber and Bolt Tanzania to make sure they

keep the whole process of intergrating riders and drivers smooth and satisfying in order

to ensure satisfaction of customers.

5.4 Implications of results

5.4.1 Policy Makers

Findings that are provided by the study can be used as basis to improve conditions

relating to policy that promotes adaptability as well as setting friendly framework that

enhance service delivery and customer satisfaction in ride hailing industryin Tanzania.

5.4.2 Ride hailing industry

Findings of this study has come up with reliable and consistent information that

identifies the determinant factors for customer satisfaction in ride hailing industry in

Tanzania. Stakeholders of ride hailing industry in Tanzania are exposed to the impact of

service quality on customer satisfaction in ride-hailing industry in Tanzania; to how

monetary value influence customer satisfaction in ride-hailing industry in Tanzania; and

to an influence of product quality on customer satisfaction in ride-hailing industry in

Tanzania.Thus, the results prepares the stakeholdere to be customer-centered and

employ measures that they can derive a total and reliable customer satisfaction in such a

50
way that meets the desired makings of flexibility and scalability, providing them with a

competitive advantage to stay ahead and provide new and improved products and

services to delight their customers.

5.4.3 Academics and Researchers

The results of this study has contributed to the knowledge gap relating to the

determinant factors for customer satisfaction in ride hailing industry.

5.5 Recommendations

In summary, as the business environment is becoming more and more competitive and

dynamic, it is necessary then for the Bolt and Uber Tanzania to seek for the solutions

that can scale up to their growth plans and provide them the much-needed nimbleness to

create a clear distinction in the market. Thus, the company needs to be customer-

centered and employ measures that they can derive a total and reliable customer

satisfaction in such a way that meets the desired makings of flexibility and scalability,

providing them with a competitive advantage to stay ahead and provide new and

improved products and services to delight their customers.

It is important be noted that being only customer-centered does not lead to

productivity growth at firm-level by itself. It depends on how the factors that led to

customer satisfaction actually used in business processes, i.e. on a company's ability to

innovate its work processes and business routines with support of ICT. Thus, only if

customer satisfaction is combined with complementary investment in working practices,

51
human capital, and firm restructuring will it have an impact on performance and service

delivery to the customers.

However, the consulted studies indicate that to come across the challenging and extra

demanding customers, new government policies and stay competitive in a fast changing

economy, smart solutions are inevitable.

52
5.5.1 Limitations of the study

Ride-hailing in Africa and other developing countries is relatively young and still

suffering from a shortage of information covering different aspects. This research ought

to bring forth unknown information of the industry that will go a long way in

facilitating further understanding of ride hailing adoption and management, particulary

in service delivery and customersatisfaction. However, the study was limited in terms of

number and type of respondents.

Future researchers should empirically test the relationships suggested in this paper in

different countries, to enable comparative studies. A larger sample would also allow

detailed cross-sectorial comparisons which were not possible in the context of this

study.

5.5.2 Area for further studies

The study used respondents found in Dar Es Salaam only, which might result in biases

because of common method variance. The study have carefully assessed such possible

biases by multiple methods, it would have been desirable to obtain data from multiple

sources. For example, future research may collect and account data from other

locations.

Also, the use of a single-item measure for competitive position is a limitation. It will be

useful to use accounting data, such as value for money and other technical

malfunctions, but the researcher were unable to do so in this analysis. The method

which was designed to evaluate electronic connections with downstream and upstream

53
partners by the same respondent was not quite satisfying. The researcher has learned

that this is not the only ideal way to measure them. More refined measures should tap

the upstream or downstream of the supply chain separately. The researcher urges other

studies to focus and employ other stated methods.

54
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APPENDICES
APPENDIX I: LETTER OF INTRODUCTION

Dear respondents,

My name is Twinomugisha M Mushumba, a student of University of Dar es Salaam

Business School (UDBS). I am conducting a study about Determinants Factors of

Customer Satisfaction in Ride-Hailing Services. A case of Uber and Bolt in Tanzania.

This research is purely for academic purpose. It is a partial fulfillment of the

requirements for the award of Masters of Business Administration in Marketing. The

success of this research will depend heavily on your willingness to cooperate by

providing correct and factual answers. Any information given to me will be strictly

treated as confidential.

I thank you in advance for your participation.

Yours faithfully,

Twinomugisha M. Mushumba

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APPENDIX II: QUESTIONNAIRES GUIDING QUESTIONS

PART 1: PERSONAL INFORMATION

Put a tick against the right option for questions with multiple answers.

1) Gender

a) Male

b) Female

2) Education level:

a) Ordinary secondary education

b) Advanced secondary education

c) Diploma level

d) Undergraduate degree and above

3) Age Group:

a) 18-30

b) 31-40

c) 41-50

d) 51-60

64
PART II: SPECIFIC INFORMATION

You are requested to tick only ONE number for the answer that best express your

opinion in each sentence. The scale is as follows:

1. Very Low 2. Low 3. Medium 4. High 5. Very high

4) Elements of service quality that derive customer satisfaction in ride-hailing

industry in Tanzania

Elements of service quality that derive customer satisfaction 1 2 3 4 5

in ride-hailing industry in Tanzania

Great Conversation and Compassion

Candies and Refreshments

Vehicle Cleanliness

Amenities of the vehicle

5) How monetary value influence customer satisfaction in ride-hailing

industry in Tanzania

How monetary value influence customer satisfaction in ride- 1 2 3 4 5

hailing industry in Tanzania

Price

Efficiency of the system used to enable commuting

Effectiveness of the ride-hailing process

65
 6) An influence of product quality on customer satisfaction in ride-hailing
industry in Tanzania
An influence of product quality on customer satisfaction in 1 2 3 4 5
ride-hailing industry in Tanzania

Reliability

Assurance

Responsiveness

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 APPENDIX III: INTERVIEW GUIDING QUESTIONS

i. What impact that service quality has on customer satisfaction in ride-hailing

industry in Tanzania?

ii. How does monetary value influence customer satisfaction in ride-hailing

industry in Tanzania?

iii. How does product quality influence customer satisfaction in ride-hailing

industry in Tanzania?

67