the effects of perceived risk and service quality on

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PURCHASE INTENTION IN ONLINE TRANSPORTATION IN GREATER JAKARTA

(A STUDY ON GO-JEK AND GRAB DRIVERS)

By

Kennedy Putrautama 11503094

BACHELOR’S DEGREE in

BUSINESS ADMINISTRATION

FACULTY OF BUSINESS AND COMMUNICATION

SWISS GERMAN UNIVERSITY The Prominence Tower

Jalan Jalur Sutera Barat No. 15, Alam Sutera Tangerang, Banten 15143 - Indonesia

July 2019

Revision after Thesis Defense on 19 July 2019

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Kennedy Putrautama STATEMENT BY THE AUTHOR

I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.

Kennedy Putrautama

_____________________________________________

Student Date

Approved by:

Super SPL Tobing, S.E., M.M.

________________________________________________

Thesis Advisor Date

Dr. Nila Krisnawati Hidayat, S.E., M.M.

________________________________________________

Dean Date

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Kennedy Putrautama ABSTRACT

THE EFFECTS OF PERCEIVED RISK AND SERVICE QUALITY ON PURCHASE INTENTION IN ONLINE TRANSPORTATION IN GREATER

JAKARTA

(A STUDY ON GO-JEK AND GRAB DRIVERS) By

Kennedy Putrautama

Mr. Super SPL Tobing. S.E, M.M, Advisor

SWISS GERMAN UNIVERSITY

The growth of technology has been a tremendous impact on online transportation services. Evidently, the increase in the usage of internet and smartphone across Indonesia has been increasing. However, there are concerns due to the increase in the usage of online transportations that service quality has seen a recent drop.

Furthermore, there are several risks as well in using online transportation services due to drivers and service providers. Thus, the aim of this research is to find the effects of perceived risk and service quality with their dimensions associated with drivers in affecting purchase intention or intention to use online transportation services in the greater Jakarta region (JABODETABEK). This research uses quantitative approach and collects data through questionnaires distributed to 180 respondents. Which uses Multiple Regression Analysis. The findings of the research found that 10 out of 11 independent variables: Functional Risk, Physical Risk, Psychological Risk, Privacy Risk, Perceived Risk, Tangible, Empathy, Responsiveness, Assurance and Service Quality have significant impact while Reliability have no significant impact on purchase intention. Therefore, by understanding these influencing factors to develop better strategies for increasing purchase intention.

Keywords: Perceived Risk, Service Quality, Purchase Intention, Online Transportation Services, Consumer Behavior

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Kennedy Putrautama

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Kennedy Putrautama DEDICATION

This study is dedicated to my beloved parents, who have been my source of inspiration and strength in completing this research.

To my brother, sister, relatives, mentors, friends and classmates who share their words, advice and encouragement to finish this study.

And lastly, I dedicate this work to the Almighty GOD, Thank you for the guidance, strength, power of mind, protection and skills.

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Kennedy Putrautama ACKNOWLEDGEMENTS

First and foremost, I would like to give my thanks to the almighty God above for His graces and mercy in guiding me in completing this Thesis. There has been many ups and downs in the process of this Thesis. However, luckily, I am very grateful for the many people who have helped me towards the process of conducting this Thesis.

I would like to express my never-ending gratitude to my beloved parents and siblings for their support in my life and completion of this Thesis. Furthermore, I would like to thank my advisor Mr. Super Tobing and all of the other lecturers for the guidance that they have given me.

Moreover, I would like to also thank my friends and classmates of SGU IBA 2015 for the good times we all share during our university live. With regards, I pray that all of you are well and succeeds in life.

Finally, I would also like to express the respondents which provided the essences of this research and without them this research will never cease.

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Kennedy Putrautama TABLE OF CONTENTS

STATEMENT BY THE AUTHOR ... 2

ABSTRACT ... 3

DEDICATION ... 5

ACKNOWLEDGEMENTS ... 6

CHAPTER 1 - INTRODUCTION ... 13

1.1 Background ... 13

1.2 Research Problem ... 20

1.3 Research Question ... 20

1.4 Research Objective ... 20

1.5 Scope and Limitations ... 20

1.6 Significance of Study ... 21

1.7 Thesis Structure ... 21

CHAPTER 2 - LITERATURE REVIEW ... 22

2.1 Framework of Thinking ... 22

2.2 Consumer Behavior ... 23

2.2.1 Purchase Intention ... 24

2.2.2 Online Purchase Intention ... 24

2.3 Perceived Risk ... 26

2.3.1 Functional Risk ... 28

2.3.2 Physical Risk ... 28

2.3.3 Psychological Risk ... 29

2.3.6 Privacy Risk ... 29

2.4 Service Quality ... 30

2.4.1 Tangibles ... 31

2.4.2 Empathy ... 31

2.4.3 Reliability ... 31

2.4.4 Responsiveness ... 31

2.4.5 Assurance ... 32

2.5 Previous Study ... 33

2.6 Study Differences ... 35

CHAPTER 3 – RESEARCH METHODS ... 36

3.1 Type of Study ... 36

3.2 Unit of Analysis ... 36

3.3 Population and Sampling ... 37

3.3.1 Population ... 37

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3.4 Location and Time Frame ... 39

3.5 Data Source and Collection... 40

3.5.1 Types of Data ... 40

3.5.2 Data Collection ... 40

3.5.3 Questionnaire Structure ... 43

3.5.4 Screening Questions ... 43

3.5.5 Respondent Profile ... 44

3.6 Research Model ... 45

3.7 Hypothesis ... 46

3.8 Operationalization Variable ... 48

3.8 Data Analysis Technique ... 50

3.8.1 Pre-test ... 51

3.8.2 Post-test ... 51

CHAPTER 4 – RESULTS AND DISCUSSIONS ... 52

4.1 Company Background ... 52

4.1.1 PT. Aplikasi Karya Anak Bangsa (GO-JEK) ... 52

4.1.2 PT. Solusi Transportasi Indonesia (GRAB) ... 54

4.2 Data Validity and Reliability ... 55

4.2.1 Pre-test Validity and Reliability for Functional Risk (X1)... 56

4.2.2 Pre-test Validity and Reliability for Physical Risk (X2) ... 57

4.2.3 Pre-test Validity and Reliability for Psychological Risk (X3) ... 58

4.2.4 Pre-test Validity and Reliability for Privacy Risk (X4) ... 59

4.2.5 Pre-test Validity and Reliability for Perceived Risk (X5) ... 60

4.2.6 Pre-test Validity and Reliability for Tangible (X6) ... 61

4.2.7 Pre-test Validity and Reliability for Empathy (X7) ... 62

4.2.8 Pre-test Validity and Reliability for Responsiveness (X8) ... 63

4.2.9 Pre-test Validity and Reliability for Assurance (X9) ... 64

4.2.10 Pre-test Validity and Reliability for Reliability (X10) ... 65

4.2.11 Pre-test Validity and Reliability for Service Quality (X11) ... 66

4.2.12 Pre-test Validity and Reliability for Purchase Intention (Y) ... 67

4.2.13 Pre-test Validity and Reliability Summary ... 68

4.3 Post Test Result ... 70

4.4 Respondent Profile ... 71

4.4.1 Gender ... 71

4.4.2 Age ... 72

4.4.3 Education ... 72

4.4.4 Occupation ... 73

4.4.5 Income ... 73

4.4.6 Service Used ... 74

4.4.7 Usage in the last Three (3) Month ... 74

4.4.8 Area of Domicile ... 75

4.5 Mean Score and Overall Mean Score ... 76

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4.6.1 Normality Test ... 78

4.6.2 Multicollinearity Test ... 80

4.6.3 Heteroscedasticity Test ... 81

4.7 Multiple Regression Analysis ... 82

4.7.1 T-test (Partial) ... 82

4.7.2 F-test (simultaneous) ... 84

4.7.3 Coefficient Determination (R²) ... 84

4.8 Hypothesis Result ... 85

4.9 Hypothesis Analysis ... 89

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS ... 91

5.1 Conclusion ... 91

5.2 Recommendation ... 93

5.2.1 Managerial Implications ... 93

5.2.2 Recommendation for Further Study ... 98

REFERENCES ... 99

APPENDICES ... 106

Appendix 1. Table of Critical Values: Pearson Correlation ... 106

Appendix 2. Bahasa Indonesia Questionnaire ... 108

Appendix 3. Questionnaire Result ... 112

Curriculum Vitae ... 127