Impact of dynamic pricing and driver behavior on service quality in ride-hailing operations: a study of Bangalore’s urban dynamics

Purpose The study evaluates the influence of the dynamic pricing factors, price transparency, seasonality and driver behavior on the ride-hailing services’ perceived quality. While many technological changes are detected in the service, dissatisfaction continues to persist between customers about prices surging higher and dangerous practices of driving in the service. Design/methodology/approach In the context of an urban area such as Bangalore, service quality and customer satisfaction are mostly a result of dynamic pricing and driver behavior. In order to better understand the associations in these relations, the study utilizes PLS-SEM in quantitative. Findings The study identifies the user-ride-hailing survey key service quality drivers – reliability, comfort, responsiveness and safety. Although the results indicate that dynamic pricing can successfully manage demand, this is contingent on whether it is implemented in a transparent manner and with a sense of equity perceived by customers. Driver professionalism is the important variable that strengthens or weakens the effect of pricing policies on customer satisfaction. Research limitations/implications This study contributes to the expanding body of knowledge on urban mobility and provides actionable insights for improving ride-hailing operations in developing economies. Practical implications Implications to industrial stakeholders entail reorienting in driver training and refining algorithms and strategies about dynamic pricing that boost customer trust and loyalty. Originality/value This is one of the few studies that explore the dynamics of urban mobility from developing countries perspective like India.