ESTIMATING THE DETERMINANTS OF DEMAND FOR UBER SERVICES IN LAGOS-STATE, NIGERIA

Lukman  Oyeyinka OYELAMI; Babatunde  ADEKUNLE; Sulaimon Olanrewaju  ADEBIYI; Nurudeen. A.  SOFOLUWE

Lukman Oyeyinka OYELAMI Economics Unit of Distance Learning Institute, University of Lagos, Nigeria.
Babatunde ADEKUNLE Economics Unit of Distance Learning Institute, University of Lagos, Nigeria.
Sulaimon Olanrewaju ADEBIYI Department of Business Administration, University of Lagos. Akoka. Nigeria
Nurudeen. A. SOFOLUWE Department of Cooperative and Rural Development, Olabisi Onabanjo University, Ago-iwoye. Nigeria

Keywords: Demand, Regression, Transportation, Uber, Nigeria

Abstract

The advent of technology has reinvented the taxicab business model. Uber applications assist matching people who want a ride with a car driver with people who will like to provide the service using their personal/private cars. It is against this background that this study sought to estimate the determinants of demand for Uber services in Lagos. To this effect, a sum of 600 consumers of Uber services was sampled using purposive sampling techniques within the Lagos metropolis. This sample size was determined using an infinite population formula since the number of people commuting in Lagos-state daily is very large and follows a random distribution. Responses from the sampled customers were elicited using a structured questionnaire. The research instrument was validated through content validity while Cronbach's alpha test of reliability was conducted with a Cronbach's alpha scores 0.785 for customers’ safety and trust (CST), 0.812 for customers’ convenience (CCV), 0.834 for the price (PRC), 0.878 for drivers’ efficiency (DRF) and 0.856 for Uber benefits. Regression was performed on the variables with demand for Uber service with the results showing an R-square value of 0.533 suggesting that 53.3% of the variation in the demand for Uber services can be explained by the included variables (CST, The parameter estimates of the model show that customer safety and trust (CST, CCV, PRC, and DRF) is positive and significantly (β = 0.618, t = 1.828) related to demand Uber services in Lagos State at 10% level of significance. Thus, customers’ safety and trust, customers’ convenience, price, and drivers’ efficiency are the main determinants of demand for Uber in Lagos metropolis. The study, therefore, recommends that stakeholders in private transportation businesses such as Uber should augment the training of drivers towards the determinants of Uber`s service patronage as suggested by the study.