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
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 (11). 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).
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). There
is however a difference between trust in general, referred to as natural propensity
trust, and trust in an online environment (17). According to research done by
Kiku Jones and Lori N.K. Leonard (18), natural propensity trust has no
connection with trust online. In other words, a consumer who trusts people a
lot in daily life does not have to be as trusting when making transactions
has shown that online purchases, according to consumers, 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).
it comes to mobile services, trust has the same important factor as it has on the
internet. It is the confidence a user of the mobile service has in the safety
and privacy of their information (13). In other words, trust in mobile services
means using the service thinking it will be risk free, while there will be
advantages in the future. For the digital platform companies who provide these mobile
services, trust is hard to earn and easy to lose (14).
Familiarity and reputation.
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.
In an online digital platform contributing to the
sharing economy, reputation is an important part for success (15). The strength
of the relationship between the consumer and the digital platform indicates the
level of reputation the platform has (15). Whereas a platform with a weak
relationship a lower level of reputation can be expected and a strong
relationship a higher level of reputation. The trust in consumer to consumer
businesses is different from a business to consumer trust. The reputation of
the platform providing consumer to consumer business is very important in
positively influencing trust (16). A good reputation can be achieved by strong
relationships (15), but also an excellent perception of the platform influences
a reputation positively (16).
3.1 The sharing economy in China.
The sharing economy has become an alternative
provider of products and services who used to be provided only by established
companies (18). The sharing economy can be referred as an economic ecosystem
that developed through ITC technologies and is connecting individuals,
organizations, governments and others, in order to create value by sharing goods
economy has emerged as alternative suppliers of goods and services tradition?
ally provided by long-established industries 27. The sharing economy can be defined as a socio-economic ecosystem that
commonly uses information technologies to connect different
stakeholders-individuals, companies, governments, and others, in order to make
value by sharing their excess capacities for products and services 13. Moreover, Botsman and Rogers 5 indicated that sharing the economy
underlies the business model in the operation of collaborative consumption,
where people offer and share underutil? ized resources in creative, new ways.
economy activities fall into four broad categories: recirculation of goods,
increased utilization of durable assets, exchange of services, and sharing of
productive assets 22.