Customer Satisfaction and Trust as a Mediating Mechanism in Bid-Based Ride-Hailing Systems

Abstract

This research focuses on how bid price, system quality and service quality affect the customer loyalty of ride-hailing services in Indonesia, with customer satisfaction and trust as the mediating variables. A quantitative approach was used to collect data through online questionnaires from 384 respondents, of which 365 respondents had used bid price ride-hailing services. The data were processed using SmartPLS 4.0 to analyze validity, reliability, and test the hypotheses. The results show that bid price positively affects customer satisfaction and loyalty. On the other hand, system quality positively affects customer satisfaction and does not directly affect customer loyalty. This means that having a system that functions well is not enough to create customer loyalty. Subsequent research demonstrates that service quality exerts the most substantial effect on customer satisfaction and indirectly affects customer loyalty through trust, highlighting the importance of relationship dynamics. Customer satisfaction operates as a first-order mediator and encapsulates the effectiveness of services, the elasticity of prices, and the total experience. It should be noted that satisfaction by itself does not result in loyalty; rather, it promotes trust by increasing customer confidence in the system's reliability, safety, and integrity. The result shows that loyalty is most affected by a mediated construct, in this case, satisfaction and trust, that strengthens the correlation of the attributes of the service and loyalty. Trust is the critical mediating factor that converts service experience and satisfaction into long-term commitment, continued use, and advocacy. It follows that ride-hailing companies, considering the competition, must go beyond the improvement of trust-promoting service quality and customer support to system and pricing elasticity enhancements to improve loyalty.