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Passengers Satisfaction and Passengers Loyalty: The Mediating Role of Service Quality in Ride-Sharing Service in Bangladesh

November 2024

Authors:

Mohammad Omar Faruq

Jagannath University

Md. Rafiqul Islam

Jagannath University

This study, which focuses on Dhaka, Bangladesh, examines how different components of service quality affect user loyalty and satisfaction in app-based ride-sharing systems. The study employed a quantitative approach, using a survey to collect primary data from ride-sharing users in Dhaka. The sample consists of 102 ride-sharing users in Dhaka, and the data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The research confirms the importance of tangible factors (vehicle condition) and traditional service quality aspects (reliability, assurance) on passenger perceptions of service quality. Interestingly, the influence of driver empathy on service quality was inconclusive. While a direct association exists between service quality and satisfaction, the combined impact of responsiveness with passenger loyalty and service quality is less significant. Highlighting the critical role of service quality, this research provides valuable insights for stakeholders in Dhaka's ride-sharing market to optimize services, enhance passenger satisfaction, and build long-term customer loyalty.

Structural Model with T-values.

…

Demographic Characteristics of the Sample

…

Analysis of the structural model

…

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Content uploaded by Md. Ariful Islam

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Keywords: Ride-sharing, Service quality, Passenger satisfaction, Passenger loyalty,

Structural model analysis, SmartPLS.

1. Introduction

Enhancements in transportation and communication systems are crucial indicators of economic

development. Transportation is essential for the Bangladeshi economy. The transportation

sector contributes to a significant portion of Bangladeshi’s GDP. It also facilitates the move-

ment of goods and people, which is essential for economic growth (R. Kumar et al., 2019).

Urbanization, economic growth, evolving consumer preferences, and technological progress

are driving the increased demand for transportation services in BD.

____________________________________

Post Graduate Student, Department of Accounting & Information Systems, Jagannath University

Associate Professor, Department of Accounting & Information Systems, Jagannath University

Post Graduate Student, Department of Accounting & Information Systems, Jagannath University

Jagannath University Journal of Business Studies

Volume 12, No. 1, June 2024, Page 163-182

https://jnu.ac.bd/journal/portal/archives/business.jsp

ISSN : 2957-8248

PASSENGERS SATISFACTION AND PASSENGERS LOYALTY:

THE MEDIATING ROLE OF SERVICE QUALITY IN RIDE-SHARING

SERVICE IN BANGLADESH

Md. Ariful Islam 1 Dr. Mohammad Omar Faruq 2 Md. Rafiqul Islam 3

Received Date: 28-08-24 Accepted Date: 24-11-24

Abstract

This study, which focuses on Dhaka, Bangladesh, examines how different

components of service quality affect user loyalty and satisfaction in app-based

ride-sharing systems. The study employed a quantitative approach, using a

survey to collect primary data from ride-sharing users in Dhaka. The sample

consists of 102 ride-sharing users in Dhaka, and the data were analyzed using

Partial Least Squares Structural Equation Modeling (PLS-SEM). The

research confirms the importance of tangible factors (vehicle condition) and

traditional service quality aspects (reliability, assurance) on passenger

perceptions of service quality. Interestingly, the influence of driver empathy on

service quality was inconclusive. While a direct association exists between

service quality and satisfaction, the combined impact of responsiveness with

passenger loyalty and service quality is less significant. Highlighting the

critical role of service quality, this research provides valuable insights for

stakeholders in Dhaka's ride-sharing market to optimize services, enhance

passenger satisfaction, and build long-term customer loyalty.

As Bangladesh urbanizes, there is a greater need for transportation services to connect people to

jobs, schools, and other essential services. According to Helling (1997), Economic development

typically results in higher demand for transportation services, driven by increased disposable

income available for travel. Changes in consumer preferences, such as a preference for personal

space and convenience, have also led to an increase in the demand for private vehicles (Pucher

et al., 2007). Technological progress, exemplified by the emergence of ride-sharing applications,

has enhanced accessibility and affordability of private vehicle usage, especially in regions where

public transportation infrastructure remains underdeveloped. The proliferation of smartphones

and internet connectivity has spurred the popularity of app-based services, enabling users to

efficiently locate and hire nearby vehicles (Islam et al., 2019; Nguyen-Phuoc et al., 2021a).

Undoubtedly, Ride-sharing apps also make it easy to track the location of drivers, their estimated

arrival times, and the final fare amount, all of which can be viewed virtually on a mobile screen.

Ride-sharing services are a proven way to improve urban transportation systems. According to

(Mollah, 2020) they reduce traffic congestion, fuel consumption, and environmental pollution.

According to the official website of Bangladesh Road Transport Authority (2024), there are 15

approved ride-sharing companies currently operating in the country. And the ride-sharing

services are becoming increasingly popular. Dhaka, the capital city of Bangladesh, is widely

recognized as one of the most congested cities globally.

Ride-sharing services have the potential to alleviate traffic congestion in Dhaka by offering an

alternative to private car usage. This can free up roads for public transportation and other

essential vehicles, improve air quality, and boost economic productivity (Jahan Heme et al.,

2020; Sakib, 2019). Ride-sharing services have gained popularity in Dhaka due to their

convenient and efficient travel options. Commuters can book a ride with a click of a button,

and the driver will arrive shortly. This saves commuters a significant amount of time, as they

no longer have to wait for public transportation or hail a taxi. Ride-sharing services have

increased accessibility within the city of Dhaka, allowing people to reach destinations that

may have been challenging or inaccessible via public transportation (Bank, 2022). Uber and

Pathao are two of several ride-sharing services that operate in Bangladesh. Since their launch

in Bangladesh, they have become major players in the ride-sharing market(Alok et al., 2023).

Companies providing ride-sharing services enable users to request various forms of transpor-

tation such as cars, autorickshaws, motorbikes, and others through smartphone apps like

Uber, Pathao, Chalo, Garivara, Shohoz, and Txiwala. These platforms facilitate connections

between drivers and passengers seeking rides through their websites. Ashrafi et al. (2021)

discovered that a significant number of people favor these services over traditional transporta-

tion options, potentially contributing to their global rise in popularity. The concept of service

quality in app-based ride-sharing services is characterized by a blend of unique attributes,

encompassing traditional factors like reliability and responsiveness, alongside app-specific

elements such as driver demeanor and vehicle cleanliness. While several researchers have

underscored the significance of service quality in ride-sharing, few have explicitly linked

service quality dimensions with passenger satisfaction and loyalty. This study aims to address

this gap by investigating passenger perceptions of service quality in app-based ride-sharing

services. It seeks to identify the factors that influence user satisfaction and loyalty, thus

contributing to a deeper understanding of service quality in this context.

1.1 Research Questions

This study seeks to understand the factors influencing service quality in app-based ride-shar-

ing services and to examine the impact of service quality on passenger satisfaction and loyal-

ty. To guide the investigation, the following research questions have been formulated:

What are the key factors influencing service quality in app-based ride-sharing services?

ii. How does service quality affect passenger satisfaction and loyalty within the

ride-sharing industry in Dhaka, Bangladesh?

The key aspects to identify the key elements shaping passengers' perceptions of service

quality in Dhaka's ride-sharing services, including tangibility, responsiveness, reliability,

assurance, and empathy.

1.2 Objectives of the Study

This research topic is both practical and timely, focusing specifically on the city of Dhaka. With

sufficient time, this study is achievable, drawing on numerous successful examples of journeys

towards sustainable urbanization. The study aims to achieve the following objectives:

i. To explore the factors contributing to service quality in ride-sharing services in

Bangladesh.

ii. To investigate how service quality impacts passenger loyalty and satisfaction in

ride-sharing service.

The subsequent sections of this study start with a review of literature on service quality,

passenger satisfaction, and loyalty in ride-sharing services. It then outlines the research

methodology, including data collection and analysis. The findings are presented with implica-

tions for service quality and passenger loyalty in the next. Then the paper concludes with key

insights, recommendations for service improvement, and suggestions for future research.

2. Literature Review

SERVQUAL Model

The SERVQUAL model is an internationally recognized and widely used paradigm for

assessing service quality across several sectors. This model identifies five principal gaps

that can emerge between the quality of service expected by customers and the quality they

actually experience. It operates by comparing customer expectations before the service is

rendered with their perceptions post-service. The five dimensions integral to SERVQUAL

are tangibility, responsiveness, reliability, assurance, and empathy, as articulated by

Parasuraman et al. (1985) and later expanded by Zeithaml (1988). In the realm of ride-shar-

ing services, SERVQUAL has been employed extensively to gauge service quality and

customer satisfaction. Various studies have delved into different facets of service quality

and user satisfaction in ride-sharing services. Aarhaug & Olsen (2018), Cramer & Krueger

(2016), Edelman & Geradin (2015), and Linares et al. (2017) are only a few examples of

research that have examined many aspects of service models, including accessibility,

discrimination, legislation, and overall models. Ghosh (2019) explored the impact of

Pathao's services on customers in Bangladesh, utilizing SERVQUAL dimensions to find

opportunities for development. The study emphasized the need for ongoing improvements

across all service dimensions to ensure user satisfaction.

Further, Islam et al. (2019) used descriptive statistics to evaluate ride-sharing services'

quality in Bangladesh from users' perspectives, providing insights into where these

services excel and where they fall short. Kumar et al. (2019) observed a significant shift in

transportation preferences towards ride-sharing in Dhaka, highlighting the growing accep-

tance and reliance on these services among urban residents. However, there is a dearth of

studies that examine all BRTA-registered ride-sharing services in Bangladesh to determine

the extent to which service quality correlates with consumer satisfaction along

SERVQUAL dimensions. The generalizability of prior studies' conclusions is often limited

because they lacked adequate sample sizes and robust quantitative analysis. This research

aims to address these gaps, offering a thorough examination of the relationship between

service quality and customer satisfaction in Bangladesh. Hamenda (2018) explored service

quality's direct and indirect effects on customer satisfaction, with perceived value acting as

a partial mediator. The study proposed integrating service quality, price fairness, ethical

practices, and customer perceived values to enhance satisfaction in the sharing economy.

According to the results, companies should make sure to include ethical practices, reason-

able prices, and excellent service in their long-term strategies. However, the SERVQUAL

model is an essential tool for evaluating service quality in several sectors, including the

ride-sharing industry. Research consistently shows the importance of the five SERVQUAL

dimensions in shaping customer satisfaction. While numerous studies have explored differ-

ent aspects of ride-sharing, there remains a need for comprehensive research in certain

regions like Bangladesh to fully understand the relationship between service quality and

customer satisfaction. This study aims to fill these gaps, employing robust quantitative

methods and substantial sample sizes to provide more generalizable insights.

3. Conceptual Model and Hypotheses Development

The conceptual model below outlines the relationships between service quality, passenger

satisfaction, and loyalty in app-based ride-sharing services in Dhaka. Based on existing

literature, the model highlights key service quality factors (Tangibility, Responsiveness,

Reliability, Assurance, and Empathy) and examines their impact on passenger satisfaction

and loyalty. The following diagram visually represents the key variables and their intercon-

nections, forming the basis for the study's analysis:

Figure-1: Conceptual Model

3.1 Tangibility

Tangibility in the context of app-based ride-sharing services encompass the physical

appearance of service providers, facilities, equipment, and communication materials. It

includes the cleanliness and condition of vehicles, the demeanor and appearance of drivers,

and the overall physical presentation of the service (Zeithaml et al., 1990). The hypothesis

posits that if tangibility is enhanced, it will positively contribute to the perceived service

quality. The maintenance of a clean vehicle and the professional appearance of the driver

significantly impact passengers' perceptions of service quality (Parasuraman et al., 1988).

The physical aspects play a crucial role in shaping passengers' overall experience and

satisfaction, thereby influencing their perception of the service quality offered by the

ride-sharing platform (Kotler et al., 2018). The alternative hypothesis proposes that

enhancing tangibility will result in a higher perceived overall service quality among

passengers (Wirtz & Lovelock, 2022). The study aims to investigate the impact of tangibil-

ity on the overall service quality within the specific context of app-based ride-sharing

services in Bangladesh (A. Kumar et al., 2022).

H1: Tangibility is positively associated with service quality in app-based ride-sharing

services in Bangladesh

3.2 Responsiveness

Responsiveness describes the service provider's readiness and capability to offer timely

and efficient assistance to passengers (Parasuraman et al., 1988) In the realm of app-based

ride-sharing services, responsiveness encompasses elements such as fast reaction to ride

requests, punctual arrival of drivers, and swift resolution of any issues. The hypothesis

proposes that an increase in responsiveness will positively impact the perceived service

quality (Agarwal & Dhingra, 2023; Parasuraman et al., 1988). Quick and effective respons-

es to user requirements enhance the service experience, shaping passengers' overall view

of the service quality (Strombeck & Wakefield, 2008; Wirtz & Lovelock, 2022). The

alternative hypothesis suggests that improvements in responsiveness will result in an

enhancement of the overall service quality as perceived by passengers. In Bangladesh, this

research seeks to explore the connection between responsiveness and service quality in the

context of ride-sharing services.

H2: In app-based ride-sharing services in Bangladesh, responsiveness is highly positively

correlated with service quality.

3.3 Reliability

In the domain of ride-sharing services, reliability encompasses a range of critical attributes

that ensure passengers have consistent and dependable experiences. It includes the service

providers' ability to be punctual, meet promised standards, and consistently deliver reliable

services over time(Long et al., 2018; Parasuraman et al., 1988) . From the perspective of

passengers, reliability translates into having rides arrive predictably and promptly, without

significant deviations from expected schedules. This includes the assurance that drivers will

adhere to agreed-upon service levels and safety standards consistently. The hypothesis

posits that an improvement in reliability will positively shape the perceived service quality,

as passengers equate reliability with dependability and professionalism. This concept aligns

with general marketing principles, which emphasize that consistent service delivery is

crucial for cultivating satisfaction and loyalty to the customers (Kotler et al., 2018; Wirtz &

Lovelock, 2022). Conversely, the alternative hypothesis suggests that enhancing reliability

will consequently elevate the overall service quality as perceived by passengers. This

research aims to investigate the complex interplay between reliability and service quality in

the context of app-based ride-sharing services, with a specific focus on Bangladesh.

H3: The relationship between reliability and service quality in app-based ride-sharing

services in Bangladesh shows a substantial positive relation.

3.4 Assurance

Assurance pertains to the service provider's capacity to inspire passengers with confidence

and trust concerning the dependability and proficiency of their services. According to

Hossen, (2023) For ride-sharing services, assurance encompasses aspects like driver

professionalism, expertise, security protocols, and transparent communication of service

guidelines. The hypothesis proposes that an increase in assurance will positively impact the

perceived service quality. Passengers are likely to feel more secure and satisfied with the

service when they trust in the professionalism and competency of the service provider

(Haque et al., 2021). The alternative hypothesis proposes that improvements in assurance

will result in better perceived overall service quality among passengers. It examines the

connection between assurance and service quality specifically within the context of

ride-sharing services in Bangladesh.

H4: In Bangladesh assurance shows a strong positive relation with service quality in

ride-sharing services.

3.5 Empathy

Empathy denotes the service provider's capability to comprehend and respond to the

distinct requirements and worries of passengers (Parasuraman et al., 1985). According to

Sikder et al., (2021) in ride-sharing services, customers' satisfaction with service quality

diminishes when personnel do not demonstrate empathy. It includes factors such as the

friendliness and helpfulness of drivers, as well as the ability to effectively handle passenger

inquiries or issues. The hypothesis suggests that an increase in empathy will positively

influence the perceived service quality. Passengers are likely to perceive the service as of

higher quality when they feel their individual needs and concerns are acknowledged and

addressed with empathy (Dey et al., 2019). The alternative hypothesis proposes that

improvements in empathy will result in an enhancement of the overall service quality as

perceived by passengers(Khan, 2023). This research seeks to explore the correlation

between empathy and service quality of ride-sharing services.

H5: Empathy shows a notable positive relation with service quality in app-based ride-shar-

ing services

3.6 Mediating Variable-Service Quality

The perceived service quality by passengers is anticipated to directly influence their

satisfaction with a ride-sharing services (Su et al., 2021). This hypothesis suggests that

enhancing service quality will result in increased passenger satisfaction. Factors such as

tangibility, responsiveness, reliability, assurance, and empathy collectively contribute to

overall service quality, shaping passengers' perceptions of the service(Nguyen-Phuoc et al.,

2021b; Zygiaris et al., 2022).T. R. Shah, (2021) suggests that the alternative hypothesis

proposes that improvements in service quality will lead to higher satisfaction among

passengers. This study aims to explore the direct relationship between service quality and

passengers' satisfaction within the specific context of app-based ride-sharing services in

Bangladesh(Ahmed et al., 2021; Khan, 2023).

H6: There is a notable positive relation between service quality and passengers' satisfac-

tion in ride-sharing service.

3.7 Tangibility, Responsiveness, Reliability, Assurance, Empathy affects

Service Quality through Passengers satisfaction & Loyalty

This study investigates whether service quality mediates the relationship between the

independent variables (tangibility, responsiveness, reliability, assurance, empathy) and the

dependent variables (passengers' satisfaction and loyalty) in app-based ride-sharing

services. It proposes that service quality mediates by influencing how the perceived service

quality impacts passengers' overall satisfaction and loyalty(Ahmed et al., 2021; S. A. H.

Shah & Kubota, 2022). The null hypothesis posits that Service Quality does not mediate

significantly, indicating that the direct relationships between the independent variables and

the dependent variable are not affected by Service Quality. Besides, the alternative hypoth-

esis suggests that Service Quality acts as a significant mediator, impacting the strength and

direction of the relationships between Tangibility, Responsiveness, Reliability, Assurance,

Empathy, and Passengers' Satisfaction & Loyalty. This study aims to explore the mediating

role of Service Quality within the specific context of ride-sharing services in Bangla-

desh(Dey et al., 2019).

H7: In a ride-sharing services Quality plays a significant mediating role in the relationship

between Tangibility, Responsiveness, Reliability, Assurance, Empathy, and Passengers'

Satisfaction & Loyalty in Bangladesh, Service.

H7a: Service Quality plays a significant mediating role in the relationship between Tangi-

bility and Passengers' Satisfaction & Loyalty.

H7b: Service Quality plays a significant mediating role in the relationship between Respon-

siveness and Passengers' Satisfaction & Loyalty.

H7c: Service Quality significantly mediates the relationship between Reliability and

Passengers' Satisfaction & Loyalty.

H7d: Service Quality significantly mediates the relationship between Assurance and

Passengers' Satisfaction & Loyalty.

H7e: Service Quality significantly mediates the relationship between Empathy and Passen-

gers' Satisfaction & Loyalty.

4. Research Methodology

4.1 Context

This study focuses on Dhaka, Bangladesh's dynamic and expanding app-based ride-sharing

service sector. Rahman et al., (2020) found that Dhaka, as the capital and one of the most

densely populated cities in the country, poses a distinctive and complex environment for

urban transportation. With an increasing number of people moving to cities rapidly, there

is a growing demand for simpler and more efficient modes of transportation. This has led

to a lot of people using apps to share rides, making transportation more convenient and

efficient for everyone (Mollah, 2020; Tusher et al., 2020). The relevance of Dhaka lies in

the crucial role these services play in tackling transportation challenges such as traffic

congestion, air pollution, and limited public transportation infrastructure (Bank, 2022;

Sakib & Hasan, 2020). The cultural and economic diversity within Dhaka's population

adds to the complexity of understanding passengers' preferences and expectations regard-

ing ride-sharing services (ISLAM, 2022; T. R. Shah, 2021). This study attempts to offer

insightful information about the dynamics of loyalty, passenger happiness, and service

quality in the context of Dhaka's app-based ride-sharing services. Focusing on this specific

location, the study seeks to uncover implications that are pertinent to the setting and can

facilitate the continuous advancement and enhancement of ride-sharing services in the city.

4.2 Instrument Development

This study employed a quantitative method to explore how service quality relates to

passenger satisfaction, which in turn influences passenger loyalty, comparing different

ride-sharing services in Dhaka city. Primary data collection was conducted through a

survey consisting of 25 items aimed at customers of ride-sharing services.

4.3 Data collection

The current study employed a formative model built upon literature review findings and

empirical evidence from prior studies. It utilized a self-administered survey questionnaire

to explore passenger perceptions of app-based ride-sharing services in Bangladesh. The

study employed specific items to assess service quality, passenger satisfaction, and loyalty

within these services. These research instruments were adapted from earlier studies, with

service quality items being derived from(T. R. Shah, 2021) , value for money items from

(Ahmed et al., 2021), both passenger satisfaction and loyalty items were adapted from

Sikder et al., (2021)and Ahmed et al., (2021). Following their adaptation, the research

instruments underwent pretesting by subject-matter specialists. A 5-point Likert scale was

used to score responses to all research variable measurement items. Email, messaging

services like WhatsApp, and social media sites like Facebook and LinkedIn were used to

communicate with the respondents. Respondents were first asked about their recent usage

of ride-sharing apps. They received an invitation to take the survey after their recent usage

was verified. Respondents might opt out at any moment, as participation was entirely

voluntary. Using a Google form, first disseminated 157 self-administered survey question-

naires. Of those, 102 useful responses were received, yielding a response rate of 70.25%.

Structural equation modeling (SEM) was used to test the study's research model and

hypotheses following the data collection. First, measured construct reliability and validity

to assess the preliminary validity of the data. Next, used both SPSS 26 and SmartPLS 3 to

assess the construct validity and convergent validity in order to validate the validity of

partial least square-structural equation modeling (PLS-SEM). SPSS Version 25 and Partial

Least Squares Structural Equation Modeling (PLS-SEM) have been utilized to assess the

collected data.

The respondents' demographics have been analyzed using descriptive statistics (frequency

and percentage). To evaluate the data for each variable and the questionnaire items, the

mean and standard deviation were taken into account. The reliability and consistency of the

data have been assessed using Cronbach's Alpha. The instrument's validity and reliability

have been assessed by factor loading computations. Cronbach's Alpha has been used to

evaluate the reliability of data. PLS-SEM has been used to test the theories.

Table 1: Demographic Characteristics of the Sample

A total of 102 persons filled out the surveys that were offered. As to the findings, 86.3% of

RSS users were in the age range of 15 to 25, 80.4% of respondents were men, and 36.8%

of RSS users were based in Bangladesh's capital city. Additionally, students made up

89.2% of the replies.

5. Results and Analysis

5.1 Data Analysis

The multi-phase PLS-SEM methodology, which is predicated on SmartPLS version

3.2.7, was used to evaluate the data. According to Gefen & Straub, (2005) as part of the

evaluation process, the measuring model's validity and reliability are examined initially.

The structural model is utilized to examine a direct relationship between external and

endogenous components in phase two of the evaluation process. The validity and

reliability of the constructs are examined in each linked postulation. The structural

model is then tested by the second stage of the bootstrapping procedure, which involves

5000 bootstrap resampling.

5.2 Measurement Model Assessment

Two approaches have been used to analyze the measurement model: first, its construct,

convergent, and discriminant validity have been examined. The evaluation adhered to the

standards outlined by Hair et al.,2022, which included examining loadings, composite

reliability (CR), and average variance extracted (AVE).The term "construct validity" refers

to how closely the test's findings correspond to the hypotheses that informed their develop-

ment (Sekaran & Bougie, 2010). Measurement models deemed appropriate typically

exhibit internal consistency and dependability higher than the 0.708 cutoff value. (Hair et

al. 2022). But according to Hair et al. (2022), researchers should carefully evaluate the

effects of item removal on the validity of the constructs and the composite reliability (CR).

Only items that increase CR when the indicator is removed should be considered for

removal from the scale. In other words, researchers should only look at those items for

removal from the scale that led to an increase in CR when the indicator is removed. In other

words, researchers should only consider removing items from the scale that lead to an

increase in CR when the indicator is removed. Almost all of the item loadings were more

than 0.70, which means they pass the fit test. Furthermore, the concept may explain for

more than half of the variation in its indicators if the AVE is 0.5 or higher, indicating

acceptable convergent validity (Bagozzi & Yi, 1988; Fornell & Larcker, 1981). All item

loadings were over 0.5, and composite reliabilities were all in excess of 0.7(J. F. Hair,

2009). The AVE for this investigation ranged from 0.764 to 0.834, which indicates that the

indicators caught a significant portion of the variation when compared to the measurement

error. The findings are summarized in Table 2, which demonstrates that all five components

can be measured with high reliability and validity. In other words, the study's indicators

meet the validity and reliability criteria established by SEM-PLS.

Table 2: Reflective measurement model evaluation results using PLS-SEM

Fornell and Larcker's method and the hetero-trait mono-trait (HTMT) method was used to

evaluate the components' discriminant validity. For a model to be discriminant, its square root

of the average variance across items (AVE) must be smaller than the correlations between its

individual components. (Fornell & Larcker, 1981). Using Fornell and Larcker's method

determine that for all reflective constructions, the correlation (provided off-diagonally) is

smaller than the square roots of the AVE of the construct (stated diagonally and boldly).

Table 3 : Discriminant Validity of the Data Sets (Fornell and Larcker’s Technique)

The results of the further HTMT evaluation are shown in Table 3; all values are smaller

than the HTMT.85 value of 0.85 (Kline, 2023) and the recommendations made by Henseler

et al. (2015) were adhered to the HTMT.90 value of 0.90, indicating that the requirements

for discriminant validity have been satisfied. Convergent and discriminant validity of the

measurement model were found to be good in the end. All values were found to be greater

than 0.707 in the cross-loading assessment, indicating a strong association between each

item and its corresponding underlying construct. Table 4 displays the cross-loading values

in detail. Overall, every signal supports the discriminant validity of the notions. Conver-

gent validity, indicator reliability, and construct reliability all show satisfactory results,

therefore the constructs can be used to verify the conceptual model.

Table 4 : Discriminant Validity using Hetero-trait Mono-trait ratio (HTMT).

The findings shown in Table 4 demonstrate that the HTMT values satisfied the discrimi-

nant validity requirement since they were all lower than the HTMT 0.85 and 0.90 values

respectively (Kline, 2023). As a whole, the measuring model demonstrated sufficient

discriminant and convergent validity. The results indicated that each item had a larger

loading with its own underlying construct. When the cross-loading values were examined,

they were all greater than 0.707.

Table 5 : Discriminant Validity of the Data Sets (Cross Loading).

In conclusion, each construct's discriminant validity requirements are satisfied by the

measurements. The conceptual model is now prepared for testing after receiving positive

assessments for construct reliability, convergent validity, and indicator reliability.

5.3 Structural Model Assessment

The methodological rigor of our study extended to the examination of relationship path

coefficients, the coefficient of determination (R²), and effect size (f²), following by J. Hair

et al., (2022) comprehensive framework for structural model evaluation. We took particu-

lar care to address the presence of lateral collinearity, as underscored by assessing the

variance inflation factor (VIF) for all constructs(Kock & Lynn, 2012). Notably, our VIF

analysis revealed values well below the critical threshold of 5, affirming the absence of

collinearity issues within our structural model (J. Hair et al., 2022). Leveraging the Smart-

PLS 3 program, we meticulously evaluated the significance and t-statistics of each path

using bootstrapping with 5000 replicates. The synthesized findings, graphically depicted in

Figure 2 and concisely summarized in Table 4, included R², f², and t-values corresponding

to the investigated paths. Our scrutiny unveiled pivotal insights into the relationships

within the app-based ride-sharing context in Bangladesh.

Table 6: Analysis of the structural model

Even though the p-value can be used to evaluate each relationship's statistical significance

between exogenous constructions and endogenous components, it does not provide infor-

mation about the influence's extent, which is synonymous with the findings' practical

importance. In this research, we used a rule of thumb proposed by Cohen, (2013) to deter-

mine the impact's magnitude. An effect size of 0.02, 0.15, or 0.35 according to this criterion

denoted a mild, medium, or significant impact, respectively (J. Hair et al., 2022). We

observed a mixed pattern of results regarding the relationship between antecedent variables

and service quality dimensions, as reflected in the path coefficients.

While certain paths, such as AS -> PSL, AS -> SQ, EM -> PSL, EM -> SQ, RE -> PSL, RS

-> PSL, and TA -> PSL, did not meet the threshold for statistical significance, others,

specifically RE -> SQ and RS -> SQ, demonstrated robust support; (Saha & Mukherjee,

2022). Additionally, as per A. Kumar et al., (2022) research, it is explored that the quality

of service has a mediation influence on the antecedent factors as well as the satisfaction and

loyalty of passengers. This study also reveals the most significant mediating pathways.

Particularly noteworthy were the mediating effects observed for RE -> SQ -> PSL and RS

-> SQ -> PSL, highlighting the crucial part that service quality plays in determining how

satisfied and devoted customers are to Bangladesh's app-based ride-sharing industry.

In this dynamic industry landscape, service providers and policymakers can benefit from

actionable insights that highlight the complexity of factors influencing long-term loyalty

and passenger satisfaction in app-based ride-sharing services

Figure 2: Structural Model with T-values.

6. Discussion

The structural model analysis offers valuable insights into the intricate dynamics of service

quality and passenger satisfaction and loyalty within the ride-sharing industry. Let's delve

into our findings and their implications. Initially, this study explored the relationships

between various factors and service quality (SQ). The results underscored the significance

of responsiveness (RS) and reliability (RE) in shaping passengers' perceptions of service

quality (T. R. Shah, 2021), aligning with established frameworks such as the SERVQUAL

model, which emphasizes the pivotal role of reliability in service quality assessment (Para-

suraman et al., 1988). However, several hypothesized relationships did not find support in

our analysis. Factors like assurance (AS) did not demonstrate a significant association with

service quality (SQ) or passenger satisfaction and loyalty (PSL). This result is contradicto-

ry to previous research, which has shown a positive relationship between assurance and

service quality, influence the relationship between service quality constructs to PSL (Lin,

2022). This discrepancy urges a reassessment of the key determinants of passenger percep-

tions within the ride-sharing context, suggesting a potential need for reevaluation and

refinement of existing service quality frameworks. Saha & Mukherjee (2022) investigated

the mediating role of service quality (SQ) between various factors and passenger satisfac-

tion and loyalty (PSL). While service quality (SQ) was found to mediate the relationship

between responsiveness (RS) and passenger satisfaction and loyalty (PSL), similar media-

tion effects were not observed for other factors like empathy (EM) and tangibility (TA)

which is contradictory of the previous research (Lin, 2022; Man et al., 2019). This

highlights the nuanced nature of passenger satisfaction and loyalty, influenced by a multi-

tude of factors beyond just service quality. Furthermore, our analysis delved into the

interaction effects between service quality (SQ) and other factors on passenger satisfaction

and loyalty (PSL). While certain interactions, notably between responsiveness (RS) and

service quality (SQ), exhibited significant effects on passenger satisfaction and loyalty

(PSL), others did not yield statistically significant results. This underscores the importance

of considering the synergistic effects of different service attributes on passenger percep-

tions and behaviors.our study contributes to the discussion on service quality and passen-

ger satisfaction and loyalty in the ride-sharing industry. Through an explanation of the

supporting and non-supporting links found in the structural model analysis, the results

provide ride-sharing companies with practical advice on how to improve service quality

and foster customer loyalty in a market that is becoming more and more competitive.

7. Conclusion, Design Implication, Limitations and Further Research

7.1 Conclusion

This study has shed light on important aspects of service quality, customer satisfaction, and

loyalty while navigating the ever-changing landscape of ride-sharing services in Dhaka.

The study has shown the critical role that tangibility, responsiveness, reliability, certainty,

and empathy play in influencing the experiences and decisions of ride-sharing customers

as they navigate the busy streets of one of the most populous cities on Earth. In Dhaka, the

use of ride-sharing apps has gone beyond practicality; it represents a transformative

response to the challenges posed by rapid urbanization. These services offer a tangible

solution to the pressing issues of traffic congestion and limited public infrastructure,

providing a flexible and accessible alternative for city dwellers. Theoretical contributions

enable an understanding of the complex connections between aspects of service quality and

passenger satisfaction and loyalty. The study provides practical conclusions enabling

service providers to improve service quality, increase customer satisfaction, and foster

long-term passenger loyalty. However, this research marks a significant stride in app-based

ride-sharing services.

7.2 Theoretical & Practical Contribution

This study advances our understanding of ride-sharing services, particularly in Dhaka,

Bangladesh, by offering both theoretical and practical insights. Theoretically, it advances

our understanding of service quality dimensions—tangibility, responsiveness, assurance,

and empathy—by investigating their impact on passenger satisfaction and loyalty. The

study's approach also reveals the mediating role of service quality in determining overall

customer satisfaction and loyalty, with insights adapted to Dhaka's cultural and economic

environment that are applicable to similar urban areas contexts. Practically, this study

provides practical insights for ride-sharing service providers to improve critical service

quality features, enhance the passenger experience, and encourage loyalty through targeted

initiatives. These findings can be used by providers and stakeholders in Dhaka to produce

services that are relevant to local preferences, guide operational strategies, and help the

establishment of effective regulations to ensure long-term passenger satisfaction and loyal-

ty. This study thereby connects theoretical frameworks and practical applications, expand-

ing conversations about service quality while providing real-world strategies for Dhaka's

ride-sharing market.

7.3 Limitations and Future Research

Although this study gives significant insights about Dhaka's ride-sharing services, it has

certain limitations also. Self-reported and individual data can be biased, and the study's

cross-sectional design may be more accurate to detect cause-and-effect relationships.

While the sample size is large, it may not fully represent the diversity of Dhaka's ride-shar-

ing consumers, and key service quality characteristics that influence happiness and loyalty

were not included. Furthermore, the survey does not include the opinions of ride-sharing

companies, restricting a comprehensive understanding of business difficulties. Future

research could address these shortcomings by undertaking longitudinal studies to track

changes in passenger perceptions over time, incorporating provider viewpoints, and inves-

tigating additional issues like as new technology and regulatory consequences. Compara-

tive studies across different regions could also reveal how local factors shape passenger

preferences. Despite its limitations, this research lays a strong foundation for future studies

that can offer a more complete understanding of the evolving ride-sharing industry.

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