INDUSTRY FORCES INFLUENCING THE PERFORMANCE OF ONLINE APPLICATION BASED TAXI DRIVERS IN KENYA: A DESCRIPTIVE CASE STUDY OF UBER, BOLT AND LITTLE CABS DRIVERS
Abstract
Purpose of the Study: The objective of the study was to determine the industry forces affecting the performance of online-based taxi drivers in Nairobi, Kenya. In particular, the investigation sought to determine how threat of new entrant, competition in the industry, buyer power, supplier power and threat of substitute products affect the performance of online-based taxi drivers.
Statement of the problem: To survive and be successful in the online ride-hailing industry, investors of taxi application services must strengthen and reshape their operations with a view to becoming more competitive and profitable despite the increased number of players in the sector.
Research methodology: The study used descriptive research design. The target population included all online-based taxi drivers operating in Nairobi metropolitan amounting to 4320. The unit of observation were drivers. The sample size was 366 that included 142 from Uber, 105 from Little Cab and 119 from Bolt.
Findings: The study found that threat of new entrant was negatively and significantly related to performance (β=-.051, p=0.037). Competition was positively and significantly related to performance (β=.075, p=0.008). Buyer power and performance was negatively and insignificantly related to performance (β=-.036, p=0.054). Supplier power and performance was negatively and significantly related to performance (β=-.067, p=0.025).Threat of substitute product and performance was positively and significantly related to performance (β=.077, p=0.006).
Conclusions: It was concluded that buyer power had a low impact on the performance of online-based taxi drivers. The study also concluded that threat of new entrant in the industry has a low and negative impact on the performance. Further it was concluded that supplier in the industry was the third most significant predictor of performance among online-based taxi drivers. The study further concluded that competition had the second most significant impact on the performance. Finally, substitute products were the most significant predictor of performance among online-based taxi drivers.
Recommendations: It was recommended that online-based taxi drivers to enhance their service delivery not only to retain customers but also enhance consumer satisfaction with their services. It was also recommended drivers should be concerned about the threat of new entrant and focus on enhancing their brand image to fend off such rivals. Recommendations were made that high number of suppliers in the market was considered to have a considerable impact on performance and therefore drivers should cast their nets wide and work with more suppliers in the market. It was further recommended that drivers need to find approaches to fend off substitute products and compete with them effectively. The study also recommended drivers not only ensure that their clients are satisfied with their services but also their products are of superior quality compared to substitute services available in the market.
Keywords: Bargaining, suppliers, customers, substitute products, new entry, competition, performance, online-based taxi drivers
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