ICFAI Business School

(IFHE University- Hyderabad)

MBA (2018-2020)

TITLE: A study on the dependency of ICFAI Business School’s MBA

students on taxicabs.

Course: Business Analytics-II

(SHRM502)
Section: J

Submitted to: Submitted by:

Prof. Shashikala P. Samriddhi Bhatnagar (18BSPHH01C1101) 61

Karan Bandal (18BSPHH01C0555) 62
Swati Shadija (18BSPHH01C1410) 63
Behroze Irani (18BSPHH01C0300) 64
Abhijeet Lamoria (18BSPHH01C0027) 65
Executive Summary:
The prime objective of this study is to understand the customer perception and customer
satisfaction level on taxicab services with special reference to ICFAI Business School,
Hyderabad campus being a residential college in the outskirts of Hyderabad city. We see that
during weekends students have to travel to the city and there is excess dependability on these
taxicabs. During such times, the app based taxicabs surge the price and it is a huge problem
for students. Thus, we are studying the demand of cabs of particular type and at particular
location and time, so that the company could make necessary arrangement of the taxicabs.
For e.g. small cars, luxury cars, vans etc.
The purpose of this study is to understand the variables influencing the consumers while
selecting cab services. The study checks the customer satisfaction about the app based
taxicab services, what variables are given importance in selection of the service provider be
it; tariff, comfort, convenience, service quality, offers & discounts and customer care. This will
help the service providers as an important input to understand about the customer
satisfaction in relation to the service provided by them, and to what extent they are with us
by utilizing our services.
The study is qualitative in nature and based on primary and secondary data collected from
different sources. The variables are divided into factors decided with the help of factor
analysis conducted using SAS Enterprise Guide 7.1.
Index:

Sr. No. Particulars Page No.

1 Literature Review 1

2 Introduction 4

3 Methodology 5

4 Data Analysis 8

5 Interpretation 9

6 Conclusion 14

7 References 15
Literature Review:
 A STUDY ON FACTORS INFLUENCING THE CONSUMERS IN SELECTION OF CAB SERVICE
This study conducted by Dr. P. Kishore Kumar and Dr. N. Ramesh Kumar, Warangal,
undertakes objectives and associated keen factors like price consciousness, innovation and
coupon redemption, stringent competition in this industry motivate consumers through
coupons and how price conscious consumers redeem coupons.
The study through regression and correlation analysis, establishes a positive relationship
between price consciousness, coupon redemption and the preferences of consumers on
selection of cab services. The consumers who are price conscious are likely to redeem
coupons while booking cabs. The innovative consumers are interested to adopt for new
technology like use apps for booking cabs and other services. The redemption of coupons is
motivating factor for consumption of cab services.
 A STUDY OF PASSENGERS’ MOTIVES FOR USING MOBILE APP BASED CABS
Study conducted by DR. Mukund H. Khupse found the reasons travel preferences of
consumers for app based taxi services and the validity of the reasons put forth. The study
undertakes mean, standard deviation and simple T- test to conduct sampling and analysis.
Through adoption of descriptive study, and close ended questionnaire the study takes factors
such as availability of taxis, wi-fi availability in taxis, app based charging mechanism and
transparency and safety, which help the operators to provide for better service which is
mostly app based. It is due to a large number of benefits provided to the travellers, app based
taxies are being very popular day by day, not only in the metro cities of India but also in the
other urban areas.
 E- CAB HAILING: A STUDY ON CONSUMER BEHAVIOUR
Study conducted by professors at University of Delhi, Shivangi Dhawan, Priyanka Yadav,
focuses on how penetration of e-cab hailing has made daily commute easier, and the reason
for hailing e-cabs. Different statistical measures i.e. Mean , Median , Mode, standard
deviation, variance, range and standard error were used to influence analysis and
interpretation of data. The study reveals that digital era has replaced taxi meters and increase
in e-cab hailing, which appeals majorly to younger generations due to less waiting time, point
to point service and avoiding inconvenience like parking, driving or public transportation.
 A NETWORK MODEL OF URBAN TAXI SERVICES
A network mode by Hai Yang and S. C. Wong is developed to describe how vacant and
occupied taxis will cruise in a road network to search for customers and provide
transportation services. The model can determine a number of system performance
measures at equilibrium, such as vacant taxi movements and taxi utilization for a given road
network and the customer origin–destination demand pattern. The effects of the taxi fleet
size and the uncertainty on the system performances are explicitly taken into account. The
model offers some interesting insights into the nature of the equilibrium of taxi services, and
offers some policy-relevant results for decision making. These include the findings that the
average taxi utilization decreases sharply with the number of taxis operating, and that the
higher the taxi utilization, the larger the average customer waiting time.

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 A REGRESSION MODEL OF THE NUMBER OF TAXICABS IN THE U.S. CITIES
This study directed by Bruce Schaller talks about cities that control the number of taxicabs by
law or regulation, setting the number of cabs is one of the most important decisions made by
taxicab regulators and elected officials. Licensing either too many or too few cabs can have
serious harmful effects on the availability and quality of service and the economic viability of
the taxi business. Yet local officials often have difficulty quantifying the demand for taxi
service or tracking changes in demand. Multiple regression modelling of the number of cabs
in 118 U.S. cities identifies three primary demand factors: (1) the number of workers
commuting by subway, (2) the number of households with no vehicles available, and (3) the
number of airport taxi trips. These results are then used to identify peer cities for further
comparison and analysis to guide regulators in measuring changes in local demand for cab
service.
 IMPACT OF USE OF MOBILE APPS OF OLA CABS AND TAXI FOR SURE ON YELLOW AND
BLACK CABS
Pandya et al. [reference 6] studied the impact that the companies in the private taxi segment
had over the public sector market using a specific set of variables and studied the scenario
that is being set up in India. The variables taken were public/ private taxi market, technology
trends, ease of availability, price, comfort, safety and payment options. They found that
pricing, technology trends, comfort and safety affect the consumer choice greatly and is
highly considered when people are choosing the mode of transportation.
 CUSTOMER SATISFACTION TOWARDS CALL TAXI SERVICES- A STUDY WITH REFERNECE
TO CHENNAI
Kumar, Sentamilselvan et al. [reference 7] also focused on the customer satisfaction that is
there towards brands of aried nature and service providers in the southern Chennai hub. The
variables taken were level of comfort, safety, ease of access, promotion, convenience and the
kind of service that is being provided by the service providers. A descriptive research with a
convenient sampling was done and by using appropriate tools, feasible solutions are being
provided. They concluded a series of suggestions, on applying which, will result in the overall
growth in the future.
 A STUDY ON FEASIBILITY AND IMPACT OF RADIO TAXI AND APP-BASED VEHICLE MODEL
IN MUMBAI & BANGALORE MARKET
Study conducted by Mr. Shuvayan Bhowmik indulgences into the changing markets of
southern and western India and the customer satisfaction provided by radio taxis. It takes
into consideration successful implementation of taxicab in Mumbai, self-driven car models,
app based taxi services, etc. Based on descriptive analysis and questionnaires Change in the
people’s mindset has been the greatest factor in the growth of radio cab market. But there
are certain other aspects which are acting as the obstacles in widening the radio cab market
such as high fares, TRAI caps on the SMS and the unavailability of parking area. Radio taxi
companies have to strike a perfect balance between growth drivers and challenges to move
ahead.

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 DISRUPTIVE CHANGE IN THE TAXI BUSINESS: THE CASE OF UBER
Judd Cramer Alan B. Krueger, national bureau of economic research, has undertaken study
on Uber’s more efficient driver-passenger matching technology, the larger scale of Uber than
taxi companies, inefficient taxi regulations and Uber’s flexible labour supply model and surge
pricing more closely match supply with demand throughout the day. After statistical analysis
of the data, Uber has strategies that have to be change for the Indian economy due to
different policies and rules and driver sense. Although demand and supply is met easily it is
difficult to avoid surge pricing due to high demand for app based and web based taxis.
 A REVIEW OF THE MODELING OF TAXI SERVICES
This paper by Josep Maria Salanova presents a review of the different models developed for
the taxicab problem. Each model is analysed from different points of view, such as market
organization, operational organization and regulation issues. The conclusions obtained by the
authors are linked with the real market situations. It is concluded that; (1) the models cannot
prove the performance level, (2) the models have only investigated from the point of view of
the taxi driver (income) and the customer (waiting time, level of service, total cost), but no
model has studied the consequences of the market regulations on the city (contamination,
congestion) and lastly, (3) regulation of entry and fares don’t act together. Entry deregulation
should be accompanied with new regulations, such as fare regulation (almost with a
maximum fare control).

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Introduction:
As ICFAI Business School campus is located 35kms away from the city, a need for
transportation arises amongst the students. The MBA students’ dependency on taxicabs is
increasing and in turn increasing business against public transport. This study will help us
examine the demand for taxicabs from the MBA students of ICFAI Business School in
particular.
We are conducting a market research to know about the demand for taxicabs from ICFAI
Business School campus to the city of Hyderabad. This will be done by keeping only the MBA
students of the University in mind who fall in the age group of 18-28 years.
The parameters on which the dependency will be checked are:
1. Availability of taxicabs,
2. Availability of money,
3. Availability of different modes of public transport,
4. Waiting time,
5. Safety,
6. Car model of the taxicab,
7. Different modes of payment,
8. Frequency of usage of online application,
9. Online application ease of use,
10. Responsiveness of the online application,
11. Pricing,
12. Taxicab pooling/ sharing,
13. Multiple stop option,
14. Past customer experience,
15. App rating,
16. Driver rating,
17. Driver’s familiarity with the route,
18. Ambience,
19. Discounts and offers.

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Methodology:
This study will help us transform ambiguous problems such as availability of taxicabs, money,
mode of transport etc to a well-defined solutions with two tools viz.
1) secondary data: The secondary data used is readily available from the other sources and
as such, there is no specific collection methods. The data is obtained to find out the
various variables and also, the two cases mentioned in review of literature.
2) experience survey: We are using this technique to make sure we collect data from
participants who have knowledge or have experience of the situation.
a) Survey: The survey will be conducted using the interview method and questionnaire
method. The methodology used for the study will be a primary data collection
technique. This will be done with the help of a questionnaire circulated in the form of
Google forms using internet as a medium.
b) Observation: For the collection of data, we’ll be observing various other modes of
transportation available.
The data is collected on non-probability sampling method. The sample size consists of 150
MBA students of ICFAI Business School (IBS).
The data has been collected by resorting to the questionnaire survey method.
The questionnaire was personally administered to students who are dependent on taxicabs
to travel from ICFAI Business School (IBS) campus to the city of Hyderabad.

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Questionnaire

1. Age (in years): 18-22 23-28 28 and above

We are asking a few questions to you regarding “what affects the demand of ICFAI Business
School’s MBA students for taxicabs.”
Kindly read the factors affecting your demand for taxicabs and rate them on a score of 1 to
10. Here, 1 indicates “least likely” and 10 indicates “most likely”.
2. Availability of taxicabs.
1 2 3 4 5 6 7 8 9 10

3. Availability of money.
1 2 3 4 5 6 7 8 9 10

4. Availability of different modes of public transport other than Uber.

1 2 3 4 5 6 7 8 9 10

5. Waiting time for the taxicab to arrive.

1 2 3 4 5 6 7 8 9 10

6. Safety.
1 2 3 4 5 6 7 8 9 10

7. Car model of the taxicab i.e. luxury.

1 2 3 4 5 6 7 8 9 10

8. Different modes of payment.

1 2 3 4 5 6 7 8 9 10

9. Frequency of usage of online app.

1 2 3 4 5 6 7 8 9 10

10. Online app ease of use.

1 2 3 4 5 6 7 8 9 10

11. Responsiveness of the online app.

1 2 3 4 5 6 7 8 9 10

12. Pricing in comparison to other options; surge pricing.

1 2 3 4 5 6 7 8 9 10

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13. Taxicab pooling/ sharing. (How likely are you to prefer cab sharing?)
1 2 3 4 5 6 7 8 9 10

14. Multiple stop option. (Options available to change/ modify / add stops to your route)
1 2 3 4 5 6 7 8 9 10

15. Past customer experience.

1 2 3 4 5 6 7 8 9 10

16. App rating. (How does play store/app store rating of the app affect your preference to use
Uber cabs?)
1 2 3 4 5 6 7 8 9 10

17. Driver rating. (Does driver rating affect your preference to use Uber cabs?)
1 2 3 4 5 6 7 8 9 10

18. Driver’s familiarity with the route.

1 2 3 4 5 6 7 8 9 10

19. Ambience. (In-Cab entertainment services, cleanliness, etc.)

1 2 3 4 5 6 7 8 9 10

20. Discounts and offers. (If given a discount voucher will it affect your choice of service
provider)
1 2 3 4 5 6 7 8 9 10

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Data Analysis:
The data is analysed using Factor Analysis to check the dependency of taxicabs. With factor
analysis number of co-related variables are reduced by grouping them into factors and
naming each factor. These factors can be treated as independent variables. Thus, it is also
referred to as Data Reduction technique.

Factor Analysis is done using the SAS Enterprise Guide 7.1 by performing the following steps:

Step 1: Run SAS and click on Import data under File.

Step 2: Select the excel sheet containing the data.

Step 3: Once the data is imported from the excel sheet click on Analyse.

Step 4: Under Analyse click on Multivariate and then click on Factor Analysis.

Step 5: DATA
Other than Name and Age all the 19 variables should be moved under Analysis variables.

Step 6: FACTORING METHOD

Principal component analysis.

Step 7: COMMUNALITY
Set all priors to one.

Step 8: ROTATION AND PLOTS

Orthogonal varimax ✔️ Show a scree plot of the eigenvalues
✔️ Kaizer’s normalization

Step 9: RESULTS
✔️Display output
✔️Means and standard deviation of input columns
✔️Kaizer’s measure of sampling adequacy

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Interpretation:
 ADEQUACY
Kaiser Mayer Olkin (KMO) test also used to test the sampling adequacy. KMO value is
generally between 0 to 1. If the KMO value is more than 0.7 then the data is supposed to be
Kaiser's Measure of Sampling Adequacy: Overall MSA = 0.74203693
adequate.
As the overall KMO value is more than 0.7, we can clearly see that the data is adequate.
The KMO values for individual variables are as follows:
Availability Money Other modes Waiting time Safety Car model
of transport
0.74656015 0.79619403 0.76580529 0.71143501 0.76243237 0.73439293

Modes of Usage of App ease of Responsiveness Surge Taxicab

payment online app use pricing pooling/
sharing
0.6725294 0.82265127 0.76813545 0.82082951 0.74418428 0.85342317

Multiple Past App rating Driver Driver's Ambience Discounts

stop option experience rating route and offers
familiarity
0.51792833 0.79329856 0.58062654 0.76977542 0.66877265 0.73582027 0.6087243
As all the variables have KMO value more than 0.5, this means that none of them need to be
corrected.

 NUMBER OF FACTORS:
METHOD 1:
The number of factors can be determined with the help of the Eigenvalue table;
Eigenvalues of the Correlation Matrix:
Total= 19 Average = 1
Eigenvalue Difference Proportion Cumulative
1 4.65174349 2.96985029 0.2448 0.2448
2 1.68189320 0.09342930 0.0885 0.3333
3 1.58846390 0.20793806 0.0836 0.4170
4 1.38052584 0.13897229 0.0727 0.4896
5 1.24155355 0.13863599 0.0653 0.5550
6 1.10291756 0.15720800 0.0580 0.6130
7 0.94570956 0.08752799 0.0498 0.6628
8 0.85818157 0.04321579 0.0452 0.7079
9 0.81496578 0.06502676 0.0429 0.7508
10 0.74993902 0.09872185 0.0395 0.7903

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 11 0.65121717 0.03678263 0.0343 0.8246
12 0.61443454 0.08112898 0.0323 0.8569
13 0.53330556 0.01930833 0.0281 0.8850
14 0.51399723 0.06907531 0.0271 0.9120
15 0.44492192 0.07775898 0.0234 0.9355
16 0.36716294 0.04821379 0.0193 0.9548
17 0.31894914 0.02121174 0.0168 0.9716
18 0.29773740 0.05535679 0.0157 0.9872
19 0.24238061 0.0128 1.0000
The above table gives us the number of factors to be considered.
The two criterions that tell us the number of factors to be considered are:
1. Till the point Eigenvalue ≥ 1
2. The cumulative variance till that point should be ≥ 60%
From the above table we can see that the number of factors to be considered are 6.
It satisfies both the criterions viz, Eigenvalue ≥ 1 and cumulative ≥ 60%.
It can be seen that the 6 factors together contribute to 61.30%.
Proportion can be found by dividing Eigenvalue to the Total Eigenvalue.
Proportion = _____Eigenvalue______
Total Eigenvalue

METHOD 2:
The next method to find out the number of factors is through the Scree and Variance plot.

1) The Scree plot gives us the number of factors with the help of elbow cut. One can see an
elbow cut at 6.
2) The Variance plot gives us the variance explained by each factor and cumulative variance
of all factors together. At 6 the cumulative is 61.30%.

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 GROUPING OF VARIABLES TO FORM FACTORS:
The rotated factor pattern table helps us group the variables accordingly. The variables with
values > 0.6 should be grouped under the particular factor.
Rotated Factor Pattern
Factor1 Factor2 Factor3 Factor4 Factor5 Factor6
Availability 0.30565 0.14162 0.36727 0.09485 0.45813 0.31947
Money 0.72692 0.14764 0.02823 0.19712 -0.05107 0.17476

Other modes of transport 0.48145 0.21239 0.03989 0.22930 0.34510 0.44206

Waiting time 0.62698 -0.06022 0.49550 -0.14432 0.06261 -0.04348

Safety 0.61518 0.11747 0.07353 0.13315 0.45171 -0.23865

Car model 0.08122 0.11263 0.68656 0.04137 -0.02352 0.07658

Modes of payment 0.08857 0.11766 0.73459 0.02483 0.29443 0.04730

Usage of online app 0.13740 0.66616 0.23728 0.04103 0.04597 0.21309
App ease of use 0.23803 0.76827 -0.00045 0.05519 0.02818 0.14786

Responsiveness 0.29258 0.61475 -0.08414 -0.05434 0.33583 0.21676

Surge pricing 0.77527 0.18451 0.03879 0.06824 -0.06135 -0.02894

Taxicab pooling/sharing 0.21621 0.00999 -0.04992 0.48627 0.16344 0.27253

Multiple stop option -0.10707 0.01056 0.23199 -0.05968 0.07517 0.73695

Past experience -0.03772 0.57972 0.10273 -0.00460 0.01677 -0.16157

App rating -0.13719 0.46219 0.47053 0.32778 -0.44887 0.06933

Driver rating 0.11521 0.48148 0.09321 0.40965 0.35493 -0.22431

Driver's route familiarity 0.04468 -0.00705 0.12093 0.85149 0.10913 -0.08763

Ambience -0.12310 0.13405 0.16101 0.22838 0.71534 0.10425

Discounts and offers 0.23138 0.20935 -0.28054 0.43996 -0.08395 0.52746

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Using the above mentioned criteria each factor contain the following variables :
Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6
Money Usage of online Car model Taxicab Availability Multiple
app pooling/sharing stop option
Other App ease of use Modes of Driver's route Ambience Discounts
modes of payment familiarity and offers
transport
Waiting Responsiveness App rating
time
Safety Past experience
Surge Driver rating
pricing

 NAMING OF FACTORS:
The next step after grouping all the corelated variables is to name the factors.
Factor 1 could be renamed as Personal factor.
Factor 2 could be renamed as Functional factor.
Factor 3 could be renamed as Purposeful factor.
Factor 4 could be renamed as Locational factor.
Factor 5 could be renamed as Convenience.
Factor 6 could be renamed as Customer benefits.

 EIGENVALUE AFTER ROTATION:

After using Orthogonal Varimax, the values change. The new eigenvalues can be found using
the Variance Explained table.
Variance Explained by Each Factor
Factor1 Factor2 Factor3 Factor4 Factor5 Factor6
2.5642244 2.4204550 1.8802888 1.6397058 1.6370164 1.5054071
This value is obtained in the following manner for each factor:
e.g. for Factor 1, Eigenvalue = (0.30565)2+ (0.72692)2+ (0.48145)2+ (0.62698)2+ (0.61518)2+
(0.08122)2+ (0.08857)2+ (0.13740)2+ (0.23803)2+ (0.29258)2+ (0.77527)2+ (0.21621)2+ (-
0.10707)2+ (-0.03772)2+ (-0.13719)2+ (0.11521)2+ (0.04468)2+ (-0.12310)2+ (0.23138)2

 FINAL COMMUNALITY ESTIMATES:

Final Communality Estimates: Total = 11.647098
Availability Money Other modes of Waiting time Safety Car model
transport
0.569307 0.623016 0.645585 0.668887 0.676379 0.498779

Modes of Usage of App ease Responsiveness Surge Taxicab

payment online app of use pricing pooling/sharing
0.650858 0.568148 0.672598 0.633314 0.645852 0.38678

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 Multiple Past App rating Driver Driver's Ambience Discounts
stop experience rating route and offers
option familiarity
0.6177 0.374464 0.767572 0.597883 0.761294 0.633789 0.654893
The final communality estimates are the values of each variables. They are found from the
rotated factor pattern table.
e.g. for Availability = (0.30565)2+ (0.14162)2+ (0.36727)2+ (0.09485)2+ (0.45813)2+ (0.31947)2

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Conclusion:
We can see that the data is adequate with the help of KMO value.
The 19 variables namely; availability of taxicabs, availability of money, availability of different
modes of public transport, waiting time, safety, car model of the taxicab, different modes of
payment, frequency of usage of online application, online application ease of use,
responsiveness of the online application, pricing, taxicab pooling/ sharing, multiple stop
option, past customer experience, app rating, driver rating, driver’s familiarity with the route,
ambience and discounts and offers can be easily grouped together into 6 factors namely;
personal factor, functional factor, purposeful factor, locational factor, convenience and
customer benefits.
While selecting a cab service from ICFAI Business School Campus, Hyderabad the students
usually feel money, other means of transport, waiting time, safety and surge pricing are
correlated.
While making the decision the students find usage of online app, ease of use of app,
responsiveness, past experience and driver rating going hand in hand.
Car model, modes of payment and app rating form a factor together named purposeful factor.
The taxicab pooling/ sharing and driver’s route familiarity is named as locational factor.
The availability and ambience are both very important variables while choosing the taxicab
services from ICFAI Business School, Hyderabad campus. Together they are named as
convenience.
Lastly, we can conclude by saying that multiple stop options and discounts & offers are
clubbed together to be known as customer benefits.

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References:
 https://www.researchgate.net/publication/308214151_A_Study_on_Factors_Influencin
g_the_Consumers_in_Selection_of_Cab_Services
 http://www.kaavpublications.org/journals/journal-1/article/article-1451.pdf
 https://www.elkjournals.com/MasterAdmin/UploadFolder/E-
CAB%20HAILING%20A%20STUDY%20ON%20CONSUMER%20BEHAVIOUR-2-3/E-
CAB%20HAILING%20A%20STUDY%20ON%20CONSUMER%20BEHAVIOUR-2-3.pdf
 https://www.sciencedirect.com/science/article/pii/S0191261597000428
 https://scholarcommons.usf.edu/jpt/vol8/iss5/4/
 http://www.pbr.co.in/2017/2017_month/March/11.pdf
 http://reflections.rustomjee.com/index.php/reflections/article/viewFile/102/pdf
 https://www.sciencedirect.com/science/article/pii/S1877042811014005

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