As ICT is developing
rapidly, the sharing economy has been growing alongside. Especially the growth
of this economy within the travel industry is huge (1). As the definition of a
sharing economy in academic terms is still vacant, in this paper the sharing economy
refers to a digital platform where people acquire, deliver and share access to assets
and services (2). There is a lot of value created within this economy, this is
due to the fact that the basic idea of a sharing economy is sharing goods and
service with the entire population (3).
Digital platform companies (e.g., Zipcar, WeWork, Didi
Chuxing) see their chance in dominating markets and providing more services fitting
the needs of the customers, therefore the part of these companies within the
Sharing economy are getting more important (4). These companies set up people
to share a range of products and services.
have existed for centuries. Train platforms connect people with transportation;
malls connect customers to vendors (5). What is changed now is that the ICT
development allows these companies to gain success without owning anything. The
digital platforms are easily built and whereas it used to be a business-to-business
or a business-to-consumer relationship these new platforms allow a consumer-to-consumer
relationship (6). Study shows that this new consumer-to-consumer relationship
is often stimulated by the fact that it is cheaper, more convenient, and more sustainable
than the traditional relationships (7). The trust within these consumer-to-consumer
relationship is the main reason why these digital platform companies have such
success, it is a number one priority for consumers to feel secure when buying
products and services through online platforms (8). Although research has been
done to the trust within the ride-sharing industry in the western part of the
world, only little research has been done in the developing parts.
Therefore, the focus of
this paper will be Didi Chuxing, which is the biggest ride-sharing company in
China. The company was founded by Cheng Wei in 2012, and its business model is
based on providing transportation. With 450 million users across over 400
cities in China, Didi has the biggest market share in its industry (Crunchbase).
All services from Didi are offered through a digital platform (the Didi app)
and include on-demand taxi service, on-demand private car service and hitch-hiking.
The on-demand taxi service can be subdivided in different levels from budget to
luxury cars (Crunchbase). While focussing on Didi Chuxing, the main goal is
grasping to what extent trust is important for this ride-sharing company
operating in developing country China.
To answer this question a
literature review will be used, the literature consists of previous research and
academic articles which gives us insight into the theoretical term trust, the
development of the sharing economy in China and how they both affect the company
Didi Chuxing. The research papers and articles have been retrieved through
online university library databases and books from the UVA library.
The paper is structured
as followed: section two starts with a theoretical framework existing of theory’s,
models, and previous research. In the third section discussion of the findings
and a hypothesis will be described. Section 4 is a conclusion of the paper.
2 Theoretical Framework
Trust and Reputation/Familiarity in consumer to consumer digital platforms.
with other people whose minds cannot be read is difficult for the human being.
As human beings have an inborn need of wanting to understand everything, this in-ability
leaves them with a huge complexity. But as people need communication on a
day-to-day basis, trust is one of the factors that shrinks this in-ability and
makes us able to communicate with each other the way people do. Without thrust this
communication would not be sufficient and human beings would less likely
communicate. Therefore, it is a very important part in interaction, especially
interactions that are not regulated or governed (11).
can broadly be defined as the confidence a person has in his or her most
desired expectations of the actions from others, based on foregoing communication.
In spite of the fact that another person’s previous behaviour cannot warrant
the behaviour will be exactly the same in the future, previous behaviour of a
person that has been correctly expected in the past increases trust (12).
of the other factors that simplify the communication between people is familiarity.
Familiarity is a comprehension, often established on communications, events,
and the understanding of what, why, when and where other people do what they do
(11). Trust and familiarity are connected, but different. As trust focusses on
actions in the future, familiarity is based on focussing on these actions in
the present. For example, familiarity with Uber one of the largest digital
platform taxi hail service would be knowing how to order a taxi, choose between
different types of taxis, and eventually finding the taxi in real life. Familiarity
here is based on previous interactions with the app and therefore knowing how
to use it. Trust in Uber on the contrary, might imply providing credit card
information to pay while there is not a 100% confidence in that your credit
card information will be used appropriately in the future.
has shown that online purchases, done in the consumers point of view, are
risky, therefore trust plays a very important role in giving confidence to
customers (9). The customer is always left between the risks and the benefits
when it comes to buying online, the transaction will be done when the benefits
of the product weigh up against the risks of it. This framework complies with
Lewin’s theory (10).