Empirical Study on the Determinants of Service Quality Deterioration of Taxi Industry : Based on Traffic Accidents by Taxi in Seoul

Taxi, one of the passenger services, is an essential transporta tion system in our society. In spite of the importance of taxi service, deterioration of the service quality is continuously reported. In particular, taxi service failures due to traffic accidents have emerged as the most serious social probl em which may incur a considerable amount of social costs. In this study, we focus on analyzing the causes of servi ce quality deterioration- traffic accidents of both corpo-rately owned and privately owned taxies in Seoul. The research objective is to find out the determinants of service quality deterioration of Taxi industry and to suggest policies for improving the taxi service in Seoul. We collected the archival data from KTSA (Korea Transportation Safety Authority) and ODP (Open Data Portal), which span from 2005 to 2014. Hierarchical regression analyses and a set of mediatio n tests are conducted. The root factors inducing traffic accidents of taxies are divided into competitive, and profitabi lity factors. The statistical results indicate that the acci-dent ratio per taxi is not only affected by competitive/profita bility factors such as number of active taxi drivers, number of bus passengers, and taxi fare, but also mediated by the traf fic violation ratio. To alleviate the current problems with taxi service in Seoul, we conclude that the number of taxi es be reduced and the taxi fare be increased. Finally, we suggest several policies to improve the endemic taxi industr y problems, over-supply and the low profitability by enhancing the linkage between service quality and profitability.