Impact of Public Transport’s Ticket Service Quality on Customers’Behavioral Intention: A Case of Bus Rapid Transit (BRT) Line 1 (Kim Ma - Yen Nghia) in Hanoi City, Vietnam

VIETNAM NATIONAL UNIVERSITY VIETNAM JAPAN UNIVERSITY NGUYEN HONG HANH IMPACT OF PUBLIC TRANSPORT’S TICKET SERVICE QUALITY ON CUSTOMERS’ BEHAVIORAL INTENTION: A CASE OF BUS RAPID TRANSIT (BRT) LINE (KIM MA-YEN NGHIA) IN HANOI CITY, VIETNAM MASTER’S THESIS BUSINESS ADMINISTRATION Hanoi, 2019 VIETNAM NATIONAL UNIVERSITY VIETNAM JAPAN UNIVERSITY NGUYEN HONG HANH IMPACT OF PUBLIC TRANSPORT’S TICKET SERVICE QUALITY ON CUSTOMERS’ BEHAVIORAL INTENTION: A CASE OF BUS RAPID TRANSIT (BRT) LINE (KIM MA-YEN NGHIA) IN HANOI CITY, VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 60340102 RESEARCH SUPERVISORS: DR MAI ANH PROF MOTONARI TANABU Hanoi, 2019 TABLE OF CONTENTS CHAPTER INTRODUCTION 1.1 Rationality 1.2 Research objectives 1.3 Research questions 1.4 Subjects of research 1.5 Scope of research CHAPTER LITERATURE REVIEW 2.1 Service Quality 2.2 Customer Satisfaction 11 2.3 Behavioral Intentions 13 2.4 Service Quality and Customer Satisfaction 15 2.5 Service Quality and Behavioral Intentions 17 2.6 Customer Satisfaction and Behavioral Intentions 18 2.7 Customer Satisfaction on the relationship of Service Quality and Behavioral Intentions 19 CHAPTER THEORETICAL FRAMEWORK, METHODOLOGY 20 3.1 Theoretical framework 20 3.2 Methodology 20 CHAPTER RESULT ANALYSIS AND FINDINGS 24 4.1 Validity of measurement 24 4.2 Descriptive statistics and correlation 30 4.3 Hypotheses tests and result analysis 32 CHAPTER CONCLUSIONS AND RECOMMENDATIONS 36 5.1 Conclusions 36 5.2 Recommendations 38 5.3 Limitations 39 5.4 Suggestions 40 REFERENCES 41 APPENDIX Questionnaire 46 APPENDIX SPSS results 53 ACKNOWLEDGEMENTS This thesis has become a reality thanks to the kind support of many individuals I would like to extend my heartfelt thanks to all of them Firstly, I would like to express my deep gratitude to my supervisors Prof Motonari TANABU of the MBA Faculty at Yokohama National University and Dr Mai Anh of the International Faculty at Vietnam National University for their continuous support and assistance whenever I encountered trouble or had questions I am also highly indebted to all Professors and Doctors of the MBA Program at Vietnam – Japan University of Vietnam National University for their guidance and provision of necessary information regarding this research I would like to express my special gratitude to officers of MBA Program for your patience and endless assistance during the implementation of this thesis, as well as for Department of Academics and R&D Promotion for consistent backup of the thesis’ execution My appreciations and thanks also go to my colleagues and people who have willingly helped me to complete this thesis Nguyen Hong Hanh TABLES AND FIGURES LIST OF FIGURES Figure 1.1 BRT Line alignment Figure 2.1 Service Quality model by Gronroos (1984) Figure 2.2 Service Quality model by Rust and Oliver (1994) 10 Figure 2.3 Service Quality Model by Cronin & Brady (2001) 10 Figure 2.4 Expectation Confirmation Theory (Oliver, 1980) 12 Figure 2.5 Theory of Planned Behavior 14 Figure 3.1 Conceptual research framework 20 LIST OF TABLES Table 3.1 Questionnaire sources 22 Table 3.2 Demographic Profile of Respondents .23 Table 4.1 Rotated Component Matrix .26 Table 4.2 KMO and Bartlett's Test 27 Table 4.3 Exploratory Factor Analysis and Reliability Estimated Results .29 Table 4.4 Descriptive Statistics and Correlations 31 Table 4.5 Linear regression results 33 Table 4.6 Summary of Hypothesis testing results 35 ABBREVIATIONS AFC: Automatic Fare Collection HPC: Hanoi People’s Committee DOT: Hanoi Department of Transport TRAMOC: Public Transport Operation and Controlling Center of Hanoi TRANSERCO: Hanoi Transport and Services Corporation IC Card: Integrated Chip Card FeliCa: Operating System for IC card invented and marketed by SONY BRT: Bus Rapid Transit MRT: Mass Rapid Transit (Urban Railway) TPB: Theory of Planned Behavior CHAPTER INTRODUCTION 1.1 Rationality The role of public transport in mega city In a megacity, transport would be the most critical system among various urban structures The scale for demand growth in transport services is in line with a city’s growth, which is more than any other urban services like water, electricity, internet, etc It is distributed by space, flow direction and time unevenly In addition, this system also needs to take care of different kind of services which are dependent on individual choices Therefore, this system has uncertainties in terms of demand and service quality (Morichi et al., 2013) Public transport includes Mass Rapid Transit (MRT or Urban railway network), Bus, Bus rapid transit (BRT) and Taxi However, there are problems in transport systems in developing megacities in Asia Passenger mobility in these cities are high thanks to high economic growth and rapid urbanization Meanwhile, the infrastructure is insufficient to respond to the growing demand Model share in public transport seems declining in comparison to private ones due to increasing affordability In developing big cities like Hanoi which has the population of about 9.8 million as of 2018, the introduction of public transport like bus or BRT has been considered early approach to gradually provide incentives for passengers to stick more to public transport, decreasing private modes Still, how to encourage more passengers to this system is always a headache to policymakers Among many different policies and strategies to enforce the use of public transport, the improvement in service quality is always crucial matter Importance of Ticketing system in public transport operation The operation of public transport includes various services such as transport service, station services and ticketing services, etc Ticketing system is considered one of important factors since passengers firstly interact with a transport system by its ticketing system The Government always discussed about how to provide incentive policies to assure the ridership for public transport and decreasing the private vehicles There are PUSH and PULL policies, in which, PUSH focused on forcing measures such as imposing high tax or banning private vehicles in certain conditions, and PULL refers to those with more incentives to attract passengers such as improving the service quality As a part of the overall services of public transport, any improvements in ticketing service quality shall contribute to the realization of the Government’s goals The introduction of new technology for public transport in Vietnam BRT Line (Kim Ma – Yen Nghia) is the only BRT line in Hanoi so far, which was constructed by the support of World Bank to Hanoi City This line started its operation on December 31, 2016 by TRANSERCO as operator This line included 27 stations along the alignment, spreading through Giang Vo, Lang Ha, Le Van Luong, To Huu, Le Trong Tan and Quang Trung (Ha Dong District) streets BRT buses operate on their own dedicated lane which is marked on the road Dedicated lane for BRT does not allow any other vehicles, this characteristic ensures the frequency of BRT which is designed as 30 minutes per round and 60 turns per day This makes BRT differentiated to ordinary city bus because it will be faster by using dedicated lane Source: TRAMOC Figure 1.1 BRT Line alignment The Government of Vietnam is getting more and more concerned with introducing high technology in operation and management of public transport New electronic ticket system applying smartcard and QR code tickets is expected to benefit the operation and management of public transport system such as bus services, Bus Rapid Transit (BRT) and future Mass Rapid Transit (MRT) Hence, Hanoi City has recently introduced the first electronic ticket system for BRT Line (from Kim Ma to Yen Nghia) as a pilot to evaluate and understand the feasibility of this application in the context of Hanoi City The experience of a new ticketing system which is mostly automatic and very advanced would cause different behavioral intentions of passengers in Hanoi City – who have been, for very long time, only familiar with manual paper-based system Due to characteristics of the local people, it is necessary to know how loyal the passengers would like to be thanks to the introduction of this new service The research is focusing on ticketing service in public transport, i.e the case of BRT line in Hanoi City, Vietnam In this system, the ticketing was changed from ordinary manual paper-based tickets to smartcard and QR code-based tickets Passengers, after purchasing the card/QR code ticket, can pass through the automatic gates at BRT stations by tapping on the validators/scanners This research will inspect the impact of service quality aspects based on Brady & Cronin model (2001) with constructs mostly related to the ticketing service of BRT Line (Proposed conceptual framework is explained later) Pilot application of ticket service for BRT Line in Hanoi, Vietnam The pilot of ticketing system for BRT 01 was launched on October 10, 2018 to inspect the community’s reaction as well as seeing the system performance The pilot was instructed by Hanoi People’s Committee, and organized and invested by a consortium of technology and operating companies including Viettel Telecom – the biggest network carrier in Vietnam, Hanoi Transport and Services Corporation (TRANSERCO) – Hanoi’s major bus operator, MK Smart – a card-maker based in Vietnam, and Nhat Cuong Software The ticket system of BRT issues smart cards or QR code tickets and validate the tickets by the device at automatic gates installed inside BRT stations The issuance is made by the customer’s online operation, or computer operation by ticket staff at ticket office in Kim Ma station Since this is the transition period from manual ticketing system to automatic system, ticket staff is always allocated in stations to support passengers whenever passengers have problem in operation According to the implementer and management organization (Hanoi Public Transport Control and Management Center (TRAMOC) under Hanoi Department of Transport), passengers are getting used to the operation of the system, but they have both positive and negative opinions on this new electronic system of ticketing It is the goal of municipal government to realize e-ticket system for the whole public transport network in Hanoi However, its realization will be executed based on the evaluation’s result of the pilot system, and the subsequent improvement and implementation strategy will be discussed after the pilot Thus, to understand how service quality of this ticket system would impact the behavioral intentions, i.e the intention to reuse, recommend and to have positive word of mouth, is meaningful to managers and decision makers in Hanoi Department of Transport Advanced technology, or contactless technology as in this case, will be definitely the trend for application all over public transport system in Hanoi City in particular and in Vietnam in general As a result, decision makers will always need to observe the quality of the service as well as the consequences it may cause to the passengers, since it is always the goal of the City that is to increase the ridership of public transport, and mitigating the number of private vehicles, contributing to easing the traffic congestion in such a crowded city like Hanoi Hence, the research is not only theoretical meaningful because it would provide empirical evidence on the impacts of ticket service quality on behavioral intentions of ...VIETNAM NATIONAL UNIVERSITY VIETNAM JAPAN UNIVERSITY NGUYEN HONG HANH IMPACT OF PUBLIC TRANSPORT’S TICKET SERVICE QUALITY ON CUSTOMERS’ BEHAVIORAL INTENTION: A CASE OF BUS RAPID TRANSIT (BRT) LINE. .. (KIM MA -YEN NGHIA) IN HANOI CITY, VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 6034 010 2 RESEARCH SUPERVISORS: DR MAI ANH PROF MOTONARI TANABU Hanoi, 2 019 TABLE OF CONTENTS CHAPTER INTRODUCTION ... Prof Motonari TANABU of the MBA Faculty at Yokohama National University and Dr Mai Anh of the International Faculty at Vietnam National University for their continuous support and assistance whenever