Purpose: The primary purpose of this study is to examine the relationship between various types of the food delivery charge and the customers’ perceived fairness on the charge required by the online-to-offline (O2O) food delivery platform. In particular, it attempts to understand how fair customers perceive the food delivery charges to be and further to identify the rational condition in which the customers find the delivery charge to be fair in the O2O food delivery platform.
Research design, data, and methodology: A 2(Delivery charge by distance) x 2(Delivery charge by weekend/holiday) x 2(Minimum order amount) betweensubjects factorial design experiment was conducted in which the total of 326 subjects were invited and randomly assigned to one of the eight experimental conditions through an online survey panel data company. A three-way analysis of variance (ANOVA) was mainly performed to test the proposed research hypotheses.
Results: The result showed that customers find delivery charge by distance or weekend/holiday to be unfairer than any other type. In contrast, they are more likely and willing to accept the delivery charge contingent upon the minimum order charge. Additionally, we found that when the delivery charge type is combined with weekend/holiday charge requirement, the customer’s perceived fairness on the delivery charge significantly decreases in a negative direction.
Implications: This study provided empirical evidence to the O2O food delivery platform service and delivery food marketer in that the rate fence strategy and delivery charges should be specified at a reasonable and acceptable degree for customers. Additionally, this study paves the way for further empirical research into policy making for food delivery charge as it explores the causal relationship between various types of the food delivery charge and the customers’ perceived fairness on the charges.