Trust in the Ride Hailing Service of the Sharing Economy: The Roles of Legitimacy and Process Transparency

Introduction

Recently, people are increasingly relying on the democratized marketplace of the sharing economy to collaboratively make use of underutilized inventory (Zervas, Proserpio, & Byers, 2017). The sharing economy does not simply generate incremental economic activities, it is changing the whole consumption pattern (Zervas et al., 2017), shaking the foundation of traditional marketing channels (Ferrell, Ferrell, & Huggins, 2017), and giving rise to collaborative consumption. Powered by digital technologies, collaborative consumption resembles a novel approach for offering innovative services that challenge conventional means (Möhlmann, 2015).

Ride hailing service (RHS) is a typical example of how collaborative consumption, through a digitally enabled innovation, is transforming the transportation industry. RHS came as a result of multiple actors’ efforts to develop a business model that addresses deficiencies in the public transportation infrastructure (Cohen & Kietzmann, 2014). In RHS, platform providers (e.g., Uber and Lyft) use digitally enabled innovations (e.g., mobile or web applications) to match peer service providers (drivers) with potential customers (Yang, Song, Chen, & Xia, 2017).

RHS is diffusing rapidly with an expected revenue annual growth rate of 12.9 percent resulting in approximately 692.9m users worldwide by 2023 (Statista, 2019). This rapid diffusion is supported by the multiplicity of advantages RHS offers such as fuel saving, reduction in traffic congestion, improved customer service due to timely response time, and cost savings (Jacobson & King, 2009; Kathan, Matzler, & Veider, 2016). Nonetheless, RHS is facing significant challenges. Taxi drivers around the world are protesting against RHS and lobbying for a ban on the service (BBC, 2018; Rhodes, 2017; Verbergt & Schechner, 2015). Governments are also skeptical about RHS especially since the peer service providers (i.e., private citizens) in several countries do not need to take licensing exams or carry necessary insurance (Malhotra & Van Alstyne, 2014). Moreover, the fact that peer service providers utilize their own private vehicles, and the lack of responsibility by RHS platform providers and their tendency to shift the liability of incidents to peer service providers or customers are negatively affecting trust in the service (Amey, Attanucci, & Mishalani, 2011; Gonzalez-Padron, 2017). Safety is also a main concern in RHS. A CNN investigation revealed that at least 103 Uber drivers in the US have been accused of sexually assaulting or abusing their passengers in the past four years (O'Brien, Black, Devine, & Griffin, 2018).