Modeling Consumer Preference for Global Positioning System

Abstract

Compared with traditional taxi services, a taxi dispatching service based on the Global Positioning System (GPS) provides a higher level of service and safety in transporting customers. This type of new service, however, requires taxi companies and wireless communication companies to take on return-on-investment risks. Whether this new service induces people to use taxi service more often or attracts new riders will influence significantly the decision to invest in the service. This paper identifies primary factors that affect consumer preference for using the new service in Taichung City, Taiwan, by analyzing consumer responses from a survey conducted in that city. Both cluster analysis and structural equation modeling (SEM) techniques were used to analyze the data. The results of cluster analysis established that GPS-based taxi dispatching service would draw customers who value quality of service. The SEM analysis verified that three constructs—vehicle comfort, convenience, and reliability—had positive relationships with consumers’ choice of taking GPS-based taxicabs. In contrast, the safety construct was related negatively to preference; that is, users did not perceive that taking GPS-based taxicabs was much safer. This finding was just the opposite of that anticipated by the Taiwan government and by academic and business sectors. These results can guide regulators and taxi organizations in improving the quality of taxicab services and public outreach programs. The data also can be used to identify peer cities for further comparison and analysis.

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Modeling Consumer Preference for Global Positioning System–Based Taxi Dispatching Service

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