What Does Your Phone Say About You? An Empirical Analysis of Ride-Hailing Service Spending and Digital Coupon Redemption

The estimated value of the global ride-hailing industry in 2024 is $ 167.6 billion, which is predicted to increase by 27% by 2029. Ride-hailing companies attempt to increase market share and decrease the customer churn rate by sending out digital coupons. Unfortunately, low redemption rates of digital coupons have been a concern for marketers and organizations in this market sector. This study aims to provide a more comprehensive understanding by analyzing behavior in the ride-hailing context from a sociotechnical perspective, drawing on self-determination theory. Our data was collected from a South Korean ride-hailing service provider in Seoul. We constructed an unbalanced panel dataset to conduct the analysis. The results show that individual motivation and behavior may be associated with the mobile phone operating system (iOS and Android) used by individuals. We also find that the receipt of a digital coupon (an extrinsic reward) has a negative impact on iOS (self-determined) clients but exerts no effect on Android (non-self-determined) clients. Findings from this study may be used as a starting point to develop potential avenues to differentiate customers (self-determined and non-self-determined) and allow ride-hailing companies to segment their promotion strategies better.