Assessing the economic value of reducing perceived risk in ride-hailing: Evidence from US cities

Soo Jeong Hong () and Kwangjin Lee ()
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Soo Jeong Hong: Sejong University
Kwangjin Lee: Soongsil University

Electronic Markets, 2025, vol. 35, issue 1, No 90, 24 pages

Abstract: Abstract The new forms of service provision in ride-hailing raise multiple issues that influence consumer decisions about adopting such services. Empirical data reveal mixed responses: some individuals embrace these services, whereas others remain hesitant during the growth phase. Using a discrete choice experiment, this study examines the types of perceived risks that influence consumers’ and non-consumers’ willingness to pay for service attributes aimed at reducing perceived risks in ride-hailing, one of the largest sectors in the sharing economy. The results indicate that individuals’ utility significantly increases when the service avoids requiring private information, provides a driver-tracking system, mandates commercial driver’s licences for drivers, includes a driver-rating system, offers comprehensive compensation for negative incidents, and guarantees a minimum wage and benefit plan for drivers. This research expands and enriches the theory of perceived risk by introducing perceived fairness risk as a new dimension. We provide theoretical and practical implications to assist platform companies and policymakers.

Keywords: Ride-hailing; Perceived risk; Choice experiment; Random parameter logit; Latent class logit; Sharing economy (search for similar items in EconPapers)
JEL-codes: M13 M15 M20 O33 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s12525-025-00850-3

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