International Journal of Administrative Science & Organization, January 2019 Volume 26, Number 1

Bisnis & Birokrasi: Jurnal Ilmu Administrasi dan Organisasi DOI: 10.20476/jbb.v26i1.10115

The Role of the Government Regulation in

Online Transportation: A Model Validation

Okki Chandra Ambarwati1, Rino A. Nugroho2, Didik G. Suharto3

Program of Public Administration, Faculty of Social and Political Sciences, Universitas Sebelas Maret,
Indonesia
okkiambarwati@student.uns.ac.id1; rino.nugroho@staff.uns.aac.id2; didikgsuharto@staff.uns.ac.id3

Abstract. The online transportation has been a concern in many countries. It caused social problems with more established
conventional transportation such as taxis and buses. Some countries had issued policy to regulate online transportation, while
some others did not. Indonesia is facing the similar dilemmas. On one hand online transportation provides new jobs but on the
other hand it adds congestion and creating threats to the conventional public transportation presence. This research is conducted
to reveal the public opinion towards the continued use of online transportation. The insight of this issue might help government
in deciding whether or not they are issuing a policy on online transportation. To do the research, this study used an information
system (IS) model to understand the context of continuance. As the practice of IS model use in public administration research is
still very limited this study will focus on the validity of IS model to be used in public administration area. Questionnaire was given
to 64 respondents that were chosen using convenient sampling approach. The items of the questionnaire were built based on the
well-known IS continuance model with some addition to the predictor variables. The result indicates that IS model could be used
in the public administration research as most of the items in the constructs were valid and reliable. Another important finding is that
government regulation is the valid predictor of public intention to reuse online transportation. This study suggests government to
issue a policy to regulate online transportation, by having a balance portion on maintaining economic growth and providing social
stability. Further suggestions are discussed in the paper.

Keywords: online transportation, government regulation, instrument validation, TCT, developing country

Abstrak. Transportasi online telah menjadi perhatian di banyak negara. Ini menyebabkan masalah sosial dengan transportasi
konvensional yang lebih mapan seperti taksi dan bus. Beberapa negara telah mengeluarkan kebijakan untuk mengatur
transportasi online, sementara yang lain tidak. Indonesia menghadapi dilema serupa. Di satu sisi transportasi online
menyediakan pekerjaan baru dan mengurangi pengangguran tetapi di sisi lain transportasi semacam ini menambah kemacetan
dan menciptakan ancaman bagi keberadaan angkutan umum konvensional. Penelitian ini dilakukan untuk mengungkap
opini publik terhadap kelanjutan penggunaan transportasi online. Wawasan masalah ini dapat membantu pemerintah dalam
memutuskan apakah mereka mengeluarkan kebijakan tentang transportasi online atau tidak. Untuk melakukan penelitian,
penelitian ini menggunakan model sistem informasi (IS) untuk memahami konteks kelanjutan. Penggunaan model IS dalam
penelitian administrasi publik masih sangat terbatas. Oleh karena itu penelitian ini akan fokus pada validasi model IS yang akan
digunakan di bidang administrasi publik. Kuesioner diberikan kepada 64 responden yang dipilih menggunakan pendekatan
sampling yang mudah. Item-item dari kuesioner dibangun berdasarkan pada model keberlanjutan IS yang banyak digunakan
oleh penelitian terdahulu dengan beberapa tambahan pada variabel prediktor. Hasil menunjukkan bahwa model IS dapat
digunakan dalam penelitian administrasi publik karena sebagian besar item dalam variable yang diajukan valid dan reliable.
Temuan penting lainnya adalah bahwa Peraturan Pemerintah adalah prediktor valid dari niat publik untuk menggunakan
kembali transportasi online. Studi ini menyarankan pemerintah untuk mengeluarkan kebijakan untuk mengatur transportasi
online, terutama transportasi online roda dua, dengan memiliki keseimbangan dalam menjaga pertumbuhan ekonomi dan
memberikan stabilitas sosial. Saran lebih lanjut dibahas di koran.

Kata kunci: transportasi online, regulasi pemerintah, validasi instrumen, TCT, negara berkembang

INTRODUCTION online transportation is an example on how information

Nowadays, the advancement of technology has
supported almost all aspects of daily life, including
transportation. For example recent trends in transporta-
tion literature put a driverless city as the new direction
of research by using information technology as its core
discussion (Legacy et.al, 2019; Saranti et.al, 2018).
Another study also suggest the changing pattern of people
mobility with the presence of online based ridesourcing
in Indonesia (Priatama et.al, 2018). The emergence of
technology has changed people’s lifestyle. Online trans-
portation can be interpreted as transportation equipped
with applications that act as a bridge between passengers
and their drivers (Shen, 2015). This application has loca-
tion detection that makes the online transportation drivers
easier to locate passengers who have ordered their ser-
vices (Chan et al, 2016). The ability of this application
to locate passengers distinguishes online transportation
from conventional transportation. The presence of this
mode of online transportation in Indonesia has caused
24 International Journal of Administrative Science & Organization, January 2019
Bisnis & Birokrasi: Jurnal Ilmu Administrasi dan Organisasi
two problems. First, online transportation has reduced
conventional transportation income, mostly because
online transport involves cheaper tariffs and greater con-
venience (Harding et al, 2016). This problem occurs in
both four-wheeled and two-wheeled online transporta-
tion. The second problem comes for two-wheeled online
transportation (also known as ojek). Although ojek has
been used in more than a decades, they are still not regu-
lated by the government. The absence of such regulations
makes the presence of ojek online even in more difficult
than its four-wheeled companion. In Indonesia, to accom-
modate four-wheeled online transportation, the Minister
of Transportation Regulation No. 26 of 2017 concerning
the Implementation of People Transportation with Public
Vehicles Not in Route was implemented. The regulation
was finally revised and replaced with the government regu-
lation No. 108 (Wijayanto et al, 2018). The enactment of
this regulation has accommodated four-wheeled online
transportation. On the other hand, two-wheeled vehicles
are still unregulated. Without regulation, two-wheeled
transportation is still operational because of public need.
Because two-wheeled transportation is needed but they
remain unregulated, this study is interested in investigat-
ing this situation. Therefore, in this paper, two-wheeled
online transportation is the focus (or in Indonesia also
known as ojek online). The aforementioned problems had
led to the rejection of online transportation presence in
Indonesia (Ambarwati et al, 2017). This rejection has led
to social movements such as taxi driver strike, ojek driver
strike, even a rickshaw driver strike that may lead to riot.
Although the presence of online transportation has caused
social problems in Indonesia, no clear regulation has been
issued. There was government regulation at the beginning
of this online transportation phenomenon. The Indonesian
government had banned them. However, due to the fact that
the demand of this online transportation is still high and due
to the fact that the online transportation company provides
many jobs to those who are unemployed in Indonesia, it
did not last long.
The dilemma of this online transportation occurs not
Figure 1. TCT
Source: Liao et al (2009)
Perceived Ease of Use and confirmation.
Liao, et al (2009) explained that there is an exceptional
difference between satisfaction and attitude. Attitude is
defined as an individual evaluation of the overall product
or service offered, while satisfaction refers to a person’s
post-consumption evaluation of something (Bolton &
Drew, 1991; Hunt, 1977 in Liao et al, 2009). According
to the assimilation theory, attitude can only change slowly
Volume 26, Number 1
only in Indonesia but also in several other countries (i.e.,
US, Franch, Spain, Germany, etc) where online transporta-
tion has emerged (Cetin and Deakin, 2017). Prior studies
indicated that this societal problem arises because of the
absence of government regulations on two-wheeled online
transportation in Indonesia (Amajida, 2016; Harapan and
Purnomo, 2016). If this problem persists in the future, the
problem might get bigger impacts; therefore, it needs to
be well-anticipated. The aim of this study is to assess the
feasibility of government in issuing policies about two-
wheeled online transportation in Indonesia. This feasibility
study is conducted by doing a policy forecasting about the
continuation of online transportation. Such forecasting
will enable the government to regulate the presence online
transportation and reveal negative impacts it might have
in the future. The policy forecasting in this study will be
unique because it will combine public policy and informa-
tion systems approaches. Information system models were
used to understand better the factors that lead to online
transportation continuation that will affect the public policy
making.
There are some models many models that can explain
the continuation of an electronic system. Continuation
model has been well-developed in information system
theory (Bhattacherjee, 2001). It has been cited and dis-
cussed by more than 5.400 literature in google scholar
by 2019. Therefore this approach is used in this policy
forecasting study that aim to predict the continuation of
an online transportation system. The system continuation
concept basically tries to understand whether a tech-
nology will be reused again by its users by identifying
what the independent variables that led to continued use
(Bhattacherjee, 2001). The two models that can explain
continuation are Technology Continuance Theory (TCT)
and Expectation Confirmation Model (ECM). Developed
by Liao et al (2009), TCT is used to identify the continuous
use of a technology from its users. This model (Figure 1)
tries to capture the continuation intention of a technology
use by looking at user’s satisfaction and attitude where
these two variables were preceded by perceived usefulness,
over time, as the previous adaptation as the anchor for the
assessment of the subsequent experience (Oliver, 1980).
Therefore, satisfaction is temporary and the specific
experience will influence, while attitudes are relatively
more lasting than the previous experience. However, even
though attitudes and satisfaction are proposed as two dif-
ferent constructs, it is possible to synthesize the effects
of the user’s attitude and satisfaction behavior. TCT is a
 AMBARWATI, NUGROHO, SUHARTO, THE ROLE OF THE GOVERNMENT REGULATION
combination of Technology Acceptance Model (TAM),
Cognitive of Model (CoG) and ECM; therefore, TCT is
composed of several variables from the formation of these
three models to explain the usage cycle continuously.
ECM, on the other hand, was created by Battacherjee
(2001) and focuses on the continuous use of information
systems. Battacherjee (2001) revealed that the success of
technology adoption does not lie in the beginning of the use
of technology but in its continuous use. The ECM comes
from the development of the Expectation Confirmation
Theory (ECT) or the Expectation Disconfirmation Theory
model from Oliver (1980), which sees the consumer sat-
isfaction in repurchasing various kinds of products and
services in the marketing field (Battacherjee, 2001). From
ECT, it is stated that the consumer intention to repurchase
a product or continue service use (repurchase intention)
is determined primarily by his or her satisfaction with the
previous use of the product or service. Battacherjee (2001)
called the continuity of use the intention continuance.
Battacherjee (2001) describes the user process in making
reuse decisions just like the decision of a consumer to
repurchase a product (repurchase decision) where the user
usually has initial expectations. The expectations here are
the perceived usefulness and confirmation. Then, the user
assesses the performance through his or her experience
in using the information system. If the user judges that
the information system is useful and in accordance with
what is expected, there will be a sense of satisfaction that
affects the use of information systems on the regular basis
(or also known as IS Continuance Intention).
Previous studies conducted by Weng et al (2017) in
Malaysia show that this model can be used to identify the
intention of the continuity in the use of online transporta-
tion. He modified TCT by adding variables that related to
Asian culture (i.e., Subjective Norm and Perceived Risk
variables). Subjective Norms refers to individual percep-
tions of people who are important for them to approve or
reject certain behaviors. The reference from them depends
on the situation such as family, close friends, co-workers,
role models, and public figures. In this case, someone
will use the system because of the influence of the people
around who are considered important by him or her. This
addition is in line with Weng and de Run’s (2013) stud-
ies that also explained the characteristics of Asians’ in
continuing use a product is affected by their social sur-
roundings. Based in these prior studies, this research will
use TCT as the model for doing the forecasting of two-
wheeled online transportation in Indonesia. This model
is chosen for two reasons: first, it is suitable for online
transportation as the case of this study, and second, it is
suitable for Asian context where this study is located.
This study’s main focus is to analyze how government
regulation affects a two-wheeled online transportation
continuation in the future. Therefore, the variable of gov-
ernment regulation should be added to the model. One
information system model that can portray the role of
government regulations is Technology, Organization and
Environment (TOE) model introduced by of Tornatzky et
al (1990). The basic argument of government regulations
is the institutional theory which includes mimetic pressure,
coercive pressure, and normative pressure. Coercive pres-
sure has a major influence on the formation of behaviors/
25
actions (Meyer and Rowan, 1977). Government regula-
tion refers to the coercion from the environment in the
form of government regulations, policies, rules or laws
made by the government in forcing the public to continue
or not to continue an electronic system. Hart and Saunders
(1997) found that this regulation was a significant factor
in a technology continuation. Therefore, government
regulation was added as the independent variable in this
research.
As two-wheeled online transportation is growing,
issues have arisen. This study will forecast the future use
of two-wheeled online transportation by using a continu-
ation model approach. By identifying variables that lead
to system continuation, the government may regulate the
use of two-wheeled online transportation to avoid societal
problems in the future. The model used in this study to
forecast the continued use is based on TCT model that is
modified for the purpose of fulfilling this study objective.
RESEARCH METHOD
This research used a quantitative approach with a non-
probability sampling survey of 68 online motorcycle taxi
users. The instruments were spread using online surveys
through social media such as WhatsApp, Instagram, and
Line. The use of this online survey was chosen in addition
to saving costs and to ensure the survey data were col-
lected quickly. This research used the basic theory of TCT
from Liao et al (2009) with variables such as perceived
usefulness (PU), confirmation (COM), attitude (ATT),
satisfaction (SAT), and perceived ease of use (PEoU) to
identify the continuous use of online motorcycle taxis/
continuance intention (CI) in online transportation. Then,
variables such as government regulation (GR), and sub-
jective norm (SN) were also added to see the CI in the use
of online motorcycle taxis. The analysis in this research
used SEM with the PLS approach assisted with SMART
PLS 3.0 software in its processing. The advantage of
smart PLS is it is considered powerful because it is not
based on various assumptions. In addition, the number
of samples needed in the analysis is relatively small, and
the data in the smartPLS analysis do not have to have a
normal distribution. The measurement model phase was
carried out to determine the reliability and validity as a
result of the instrument validity in this research.
In the measurement model, the value of the loading
factor was obtained. This value shows the correlation
between the indicators and their constructs (Hair et.al
2014). If the indicator of the loading value is low, it
shows that the indicator does not work on the measure-
ment model. According to Ghozali (2008), an indicator is
considered valid if it has a correlation value above 0.70.
However, the loading of 0.50 to 0.60 for the preliminary
research is still acceptable to see the output of the correla-
tion between the indicators and their constructs (Hair et
al, 2014). The value of Cross Loading is also considered
in this analysis and is another measure of the discriminant
validity. It is expected that each indicator has a higher
loading value for the measured construct compared to
the loading value of the other constructs. In addition, the
reliability can be seen from the value of composite reli-
ability. This value shows internal consistency, meaning
26 International Journal of Administrative Science & Organization, January 2019 Volume 26, Number 1
Bisnis & Birokrasi: Jurnal Ilmu Administrasi dan Organisasi

that the high composite reliability value shows the consis- Then, there is the value of average variance extracted
tency value of each indicator in measuring the construct. (AVE), which is used to measure the amount of variance
According to Ghozali (2008), the composite reliability that can be captured by the construct compared to the
result will show a satisfactory value if it is above 0.7. variance caused by measurement errors. The AVE value

Table 1. Research Instrument

Construct Code Items Reference
PU1 Using online motorcycle taxis is practical. Fleischer & Wahlin (2016)
Fleischer & Wahlin (2016)
PU2 Using online motorcycle taxis increases my productivity.
Bhattacharhee (2001)
Perceived PU3 Using online motorcycle taxis increases my performance. Bhattacharjee (2001)
Usefulness PU4 Using online motorcycle taxis makes me arrive at my destination faster. Weng et al (2017)
(PU)
PU5 Using online motorcycle taxis helps me travel with lower cost. Fleischer & Wahlin (2016)
PU6 Using online motorcycle taxis gives me choices of means of transportation. Fleischer & Wahlin (2016)
PU7 Overall, online motorcycle taxis give me benefits. Bhattacharjee (2001)
PEoU1 Learning to use online motorcycle taxi applications is not difficult. Weng et al (2017)
PEoU2 Learning to use online motorcycle taxi applications is easy for me. Weng et al (2017)
PEoU3 I find it easy to use online motorcycle taxi applications. Weng et al (2017)
Perceived PEoU4 I find it easy to use online motorcycle taxi applications in every service I want. Weng et al (2017)
Ease of Use
PEoU5 Online motorcycle taxi applications are clear and understandable. Weng et al (2017)
(PEoU)
PEoU6 Online motorcycle taxi setting is easy for me. Fleischer & Wahlin (2016)
PEoU7 Ordering online motorcycle taxis is easy. Fleischer & Wahlin (2016)
PEoU8 Overall, I find it easy to use online motorcycle taxi applications. Weng et al (2017)
CON 1 Based on my experience, using online motorcycle taxis is better than what I expected. Bhattacharjee(2001
The service provided by the online motorcycle taxi provider is better than what I expected
CON 2 Bhattacharjee (2001)
before.
Confirmation
(CON) CON 3 The information in the online motorcycle taxi is better than what I expected. Weng et al (2017)
CON 4 Payments to online motorcycle taxi services are easier than what I expected. Bhattacharjee (2001)
CON 5 Overall, most of my expectations for the use of online motorcycle taxis were satisfied. Bhattacharjee (2001)
SAT1 Overall based on my experience in using online motorcycle taxis, I am very satisfied. Bhattacharjee (2001)
SAT2 Overall based on my experience in using online motorcycle taxis, I am very happy. Bhattacharjee (2001)
Satisfaction
SAT3 Overall based on my experience in using online motorcycle taxis, the service is very complete. Bhattacharjee (2001)
(SAT)
Overall based on my experience in using online motorcycle taxis, the service is very
SAT4 Bhattacharjee (2001)
comfortable.

Government GR1 In my opinion, the legal status of the online motorcycle taxi is important. Fleischer & Wahlin (2016)
Regulation GR2 If the city government prohibits the use of online motorcycle taxis, I will comply. Tornatzky et al (1990)
(GR) GR3 The government regulation currently supports the use of online motorcycle taxis. Tornatzky et al (1990)
SN1 My closest friends use online motorcycle taxis. Fleischer &Wahlin (2016)
SN2 My friends advised me to use online motorcycle taxis. Weng et al (2017)
Subjective SN3 What my friends think about online motorcycle taxis is important to me. Fleisher & Wahlin (2016)
Norm (SN) SN4 People’s opinions about online motorcycle taxis are generally positive. Fleischer & Wahlin (2016)
The media attention about online motorcycle taxis influences me to use online motorcycle taxi
SN5 Fleischer & Wahlin (2016)
services.
Bhattacharjee (2001)
CI1 I prefer to use online motorcycle taxis rather than conventional/base motorcycle taxis.
Weng et al (2017)
Bhattacharjee (2001)
Continuance CI2 I will use the online motorcycle taxi when I need a motorcycle taxi.
Weng et al (2017)
Intention
Bhattacharjee (2001)
(CI) CI3 I intend to continue using the online motorcycle taxi application rather than stopping to use it.
Weng et al (2017)
If possible, I want to continue to use the online motorcycle taxi application as much as Bhattacharjee (2001)
CI4
possible. Weng et al (2017)
ATT1 Using online motorcycle taxis is a better choice compared to using the conventional ones. Davis et al (1989)
Attitude ATT2 Using online motorcycle taxis is a wiser choice compared to using the conventional ones. Davis et al (1989)
(ATT)
ATT3 I prefer to use online motorcycle taxis to travel. Davis et al (1989)
Source: Source by the Author
 AMBARWATI, NUGROHO, SUHARTO, THE ROLE OF THE GOVERNMENT REGULATION
must be greater than 0.5.
The research instruments in Table 1 were used in
previous studies’ surveys of intentional research to reuse
a technology which was then developed according to
the research context. The statements in the question-
naire were prepared based on the theoretical framework
variables, namely by determining the indicators that
have been developed by several experts in the previous
studies by adjusting the research context. In this case,
the author adjusted it to the research context related
to the use of online motorcycle taxis. The informa-
tion system or application referred to in the previous
research in the context of this research is the online
motorcycle taxi. It means that the online transporta-
tion or online motorcycle taxi refers to the motorcycle
taxi that is equipped with an online-based application
from the cellular telephone. Table 1 shows the codes
and research instrument questions.
In this research, the preparation of data instruments
was carried out by compiling a list of questions in the
survey. The answers to the questions were measured
using a Likert scale consisting of 5 points, with the
following categories: 1 = Strongly Disagree (SD), 2
= Disagree (D), 3 = Neutral (N), 4 = Agree (A), and
5 = Strongly Agree. The instruments of this research
comprised three parts. The first is the consent form
section. The second is related to the respondent's iden-
tity data that must be filled. The third is the statement
and answer section of the questionnaire about the TCT
indicators of using online motorcycle taxis in which the
respondent only needs to tick (√) in the answer column
considered appropriate.
RESULTS AND DISCUSSION
Respondent Profile
Of the respondents that were filling the question-
naire, 25% were male and 75% were female. In. The age
of the respondents in this research was between 16–20
years (21%), 21–30 years (63%), 26–30 years (10%),
and 31–35 years and over 35 years (3%), respectively.
From the age classification above, the respondents of
this research were mostly those who were under 30
years old. From the respondents’ intensity of use, 31%
used online transportation 1–5 times, 55% more than
10 times, and 14% 6–10 times. Based on the type of
service used by the respondents, 10% used the services
of delivering goods, 1% used the services to buy goods,
50% used the services to take/pick up (motorcycle taxi),
and 39% used food ordering services. Hence, the major-
ity of services used by the respondents in this research
are the pickup and drop and food ordering services.
Validation Results
Instrument validation is intended to indicate how the
research instrument measure what should be measured.
Valid means that the instrument can be used to mea-
sure what should be measured (Sugiyono, 2011). The
variable validity is seen from the convergent validity
and discriminant validity. Convergent validity occurs
if the scores obtained from two different instruments
that measure the same variable have a high correlation.
27
It is assessed from the correlation between the item/
indicator scores and the variable scores. According to
Ghozali (2014), the indicator is considered reliable if
it has a correlation value above 0.7. On one hand, the
reliability testing shows the extent to which a measur-
ing instrument can provide the relatively similar results
if the measurement is carried out again on the same
subject. Reliability measurement can be done by look-
ing at the reliability composite value and Cronbach's
alpha. A variable is considered reliable if the composite
reliability value and the Cronbach’s alpha are above
0.70 (Ghozali, 2014: 65).
Table 2 shows that the stage of the reflective mea-
surement model procedure in PLS - SEM analysis is
measured by several steps, including composite reli-
ability, indicator reliability, AVE, and discriminant
validity. To determine whether the construct is reliable,
we must examine the outer loadings. Outer loading is
how much variation of the indicator item is explained
by the construct (Hair et.al 2014). The variation in the
value of the outer loading is between 0 and 1 of which
the greater the value is, the higher the level of reliability
will be. According to Nunally & Bernstein in Hair et al
(2014), the accepted value in a research study is 0.60 to
0.70. For the satisfactory value is between 0.70 and 0.90.
According to Hair et al (2014), a value below 0.60 indi-
cates that the indicator item lacks reliable consistency.
Outer loading is also related to the AVE and composite
reliability. The relationship can be seen in the small outer
loading value, making the value of AVE, and composite
reliability also small. If the value of the outer loading is
small, according to Hair et al (2014), the next step is to
delete the indicator item. The value of the outer loading
between 0.40–0.70 can be deleted if the value of AVE
and composite reliability is increased. According to Hair
et al (2011), the value of the outer loading below 0.40
must be eliminated.
Table 2 shows that the indicator items that have a
value below 0.4 that must be eliminated (Hair, 2011)
are GR 2. Thus, this item is eliminated. PU4 and PU5,
with values below 0.7, were deleted. The absence of the
items can increase the AVE value so that the value is
greater than 0.5. On the other hand, PEoU1 was not omit-
ted despite having a value below 0.7. This is because
removing PEoU1 does not increase the AVE value.
The composite reliability value is between 0 and 1. The
higher the value is, the more realistic the construct will
be. According to Ghozali (2008), the composite reliability
result will show a satisfactory value if it is above 0.7.
The table above shows the composite reliability value
above 0.7 so that the value is satisfactory. However, the
Cronbach’s alpha from the GR still shows the value below
0.7. After examining the reliability, the validity is ensured
by assessing the convergent validity value (AVE). Hair
et al. (2014) stated that the valid standard is 0.5. The
higher the value, the more valid the construct will be.
The table above shows that all the constructs have values
above 0.5. Discriminant validity is a value that shows
the how big the construct value is toward it compared to
the other constructs. The table above also shows that the
discriminant validity is said to be yes so that the value of
all variables toward it is greater than the other constructs.
28 International Journal of Administrative Science & Organization, January 2019 Volume 26, Number 1
Bisnis & Birokrasi: Jurnal Ilmu Administrasi dan Organisasi

Table 1. Measurement Model Result

Composite Cronbach Discriminant
Latent variable Indicators Loadings AVE
reliable Alfa validity
PU1 0,708
PU2 0,729
PU3 0,802
Perceived of PU4 0,657** 0,890 0.845 0,619 Yes
usefulness
PU5 0,646**
PU6 0,732
PU7 0,823
CON1 0,868
CON2 0,912
Confirmation CON3 0,849 0,940 0.919 0,757 Yes
CON4 0,849
CON5 0,870
SAT1 0.950
SAT2 0,955
Satisfaction 0,968 0.955 0,882 Yes
SAT3 0,916
SAT4 0,934
PEOU1 0,605
PEOU2 0,922
PEOU3 0,810
Perceived essay PEOU4 0,891 0.943 0.927 0,704 Yes
of use
PEOU5 0,869
PEOU6 0,820
PEOU7 0,913
ATT1 0,892
Attitude ATT2 0,834 0.889 0.812 0.727 Yes
ATT3 0,831
SN1 0,722
SN2 0,876
Subjective norm SN3 0,853 0.912 0.879 0.674 Yes
SN4 0,820
SN5 0,779
GR1 0,689
Government GR2 0,014* 0.789 0.508 0.657 Yes
regulation
GR3 0,910
CI1 0,804
Continuance CI2 0,817
0.893 0.840 0.677 Yes
intention CI3 0,885
CI4 0,781
*delete because under 0.4
** delete to increase AVE
Source: Processed by the Author

Result Analysis can improve the performance of their users (Davis et al,
Perceived of Usefulness (PU) is interpreted as the indi- 1989). In this context, PU is defined as using an online
vidual degree of believing that using certain technologies motorcycle taxi that is believed to improve the perfor-
mance of its users. PU in this model has a direct influence
 AMBARWATI, NUGROHO, SUHARTO, THE ROLE OF THE GOVERNMENT REGULATION
on the satisfaction, attitude, and CI to use. PU in this
model supports the previous research model where PU
influences the attitude to use a technology (Bhattacharjee,
2001; Weng et al, 2017; Fleischer and Wahlin, 2016). PU
also influences the satisfaction in using a technology and
also the intention to use it continuously toward the system
or technology (Bhattacharjee, 2001; Weng et al, 2017).
Therefore, the validity and reliability of the PU variable
in the instrument to look for satisfaction, attitude, and
CI to use on the use of relevant online transportation
are used and supported by the previous research. In this
research, there are seven indicators (PU1-PU7) devel-
oped in PU representing the dimensions of effectiveness,
speed, usefulness, and advantages. Of the seven indica-
tors compiled, there are five valid and reliable indicators
and two invalid indicators (PU4 and PU5) because they
have problems with the discriminant validity. These two
indicator items represent a statement that the use of online
motorcycle taxis is advantageous in terms of speed and
lower prices. This is relevant if the results of the items
inconsistent with the road conditions and price competi-
tion among online transportation companies cannot be
predicted in developing countries. Hence, five items can
be adopted and two items cannot be adopted in seeing
online transportation PU in developing countries.
Confirmation (COM) is the continuance of the
user’s initial expectations before using technology
and the performance rating after using technology
(Bhattacharjee, 2001). In this context, the continu-
ance between expectations or initial expectations
and the actual performance is assessed when using
online motorcycle taxis. The confirmation variable
in this model has a significant influence on the PU
and satisfaction. This is consistent with the previous
research model by Bhattacharjee (2001) and Weng et
al (2017). Therefore, the confirmation variable validity
in this instrument is relevant to the previous research
(Bhattacharjee, 2001; Weng et al, 2017), which can
see the effect on PU and satisfaction in using online
transportation. There are five indicators used in the
confirmation of the use of online motorcycle taxis that
represent the objective, inferred, and perceived dimen-
sions. From the results of this research, five compiled
indicators (COM1-COM5) were considered valid and
reliable to see the online transportation use in devel-
oping countries. Hence, the confirmation indicator
adopted in developed countries is the same and can
be used in the developing countries.
Satisfaction (SAT) is an evaluation of emotions
based on the performance of a product or service from
the use of products (Bhattacharjee, 2001). In this case,
SAT is an assessment of the use of online motorcycle
taxis. Satisfaction is included in this model to deter-
mine its influence on the attitude and the CI of online
transportation. Previous research supporting the rela-
tionship of the variables in this model was carried out
by Bhattacherjee (2001), on an e-learning technology,
and by Weng et al (2017), on the online transportation
applications in Malaysia. Therefore, the validity of the
variable satisfaction in seeing attitudes and CI for the
use of online transportation is relevant to be used and
supported by the previous research.
29
There are four indicators (SAT1-SAT4) which repre-
sent the satisfaction of the use of online motorcycle taxis
in this instrument. From these four indicators, it was
found that all were considered valid and reliable. It can
be said that the satisfaction items adopted in developed
countries are the same and can be used to see the online
transportation used in developing countries.
Perceived Ease of Use (PEoU) is defined as the degree
to which individuals believe that using technology can
be free from effort (Davis et al, 1989). In this context,
PEoU is interpreted as the level of ease in using and
learning motorcycle taxi applications. The PEoU vari-
able in this model has an effect on the PU and attitude.
Previous research conducted by Weng et al (2017) on
online transportation in Malaysia shows that PEoU is
significant with regards to PU but not significant regard-
ing ATT. On the other hand, research from Fleischer
and Wahlin (2016) has the opposite results from that of
Fleischer and Wahlin (2016) of the relationship between
PEoU and ATT, in which PEO is significant toward ATT.
In the TAM model of Davis et al (1989), the PEoU is
significant toward PU and ATT. Then the use of PEoU
variable to identify PU and ATT on the online transporta-
tion is relevant to be used and has been supported in the
previous research. Eight indicators (PEOU1-PEOU8) are
used for PEOU to represent the dimensions of Easiness,
Clarity and Understandability, Ease to Learn and Overall
Easiness in the use of online motorcycle taxis adapted
from the previous research (Davis et al, 1989; Weng
et al, 2017; Fleischer & Wahlin, 2016). Of these eight
indicators in this research, all were considered valid in
seeing the PEoU of online transportation in the develop-
ing countries.
Attitude (ATT) is someone’s positive or negative
feelings toward certain behaviors (Oliver, 1980). In this
context, ATT can be interpreted as the positive or nega-
tive feelings of online motorcycle taxis. ATT is parallel to
the Intention of Use in Technology Adoption Model from
Davis et al (1989) in which the ATT variable has an influ-
ence on CI. In the research of Weng et al (2017), ATT is
significant to the CI of online transportation in Malaysia.
In addition, the research of Fleischer and Wahlin (2016)
on ATT addresses online transportation use in Sweden.
Therefore, the use of ATT variable in this model to under-
stand the CI in the use of online transportation is relevant
and has been supported in the previous research. Three
indicators have been identified that are related to the indi-
cators (ATT1, ATT2, and ATT3) adapted from Davis et
al (1989) and Fleischer and Wahlin (2016) to identify the
ATT of the online motorcycle taxi use. From the results of
this research, the three indicators were considered valid
and reliable to be used to see the online transportation
use in the developing countries.
Government Regulation (GR) is a of government
regulations, policies, rules or laws that support/hinder
electronic system adoption (Tornatzky et al, 1990). GR
is part of the TOE theory of Tornatzky et al (1990). GR is
precisely in the aspect of organization and environment.
In this case, the GR to discuss is the governing of online
motorcycle taxis. This concept is close to the institu-
tional theory concept, which can be understood from
the dimensions of mimetic pressure, coercive pressure,
30 International Journal of Administrative Science & Organization, January 2019
Bisnis & Birokrasi: Jurnal Ilmu Administrasi dan Organisasi
and normative pressure. The GR variable in this research
model is seen as having an effect on the attitude of use
and the intention of continuing use. Hart and Saunders
(1997) found that this regulation was a significant factor
in the adoption of technology. The adoption of technol-
ogy involves the attitude of someone deciding to use and
continuity of use. Then, the validity of GR variable is
relevant to understand ATT and CI in the use of online
transportation. Nevertheless, the reliability of GR is still
not in accordance with the standard if it is associated with
the findings of Pudjianto (2011) that GR is significant at
the local level and insignificant at the central (national)
level. Then, the GR at the local level will be significant in
supporting the adoption of technology use. Three indica-
tors (GR1, GR2, and GR3) are used to identify the GR of
online motorcycle taxis. Two of the indicators are valid
and reliable (GR1 and GR3), and one is unreliable (GR)
because the Cronbach’s alpha value is below 0.7. GR1 is
a statement regarding the importance of the legality of
online motorcycle taxis. In this research, GR1 was con-
sidered valid and reliable. It is different from the results
of the research by Fleischer and Wahlin (2016), which
state that the item was eliminated. This shows that there
are differences in indicators used by the GR of the online
transportation in the developing countries.
Subjective Norm (SN) refers to an individual’s percep-
tion, which influences them to approve or reject certain
behaviors (Ajzen, 2005.) These perceptions are shaped
by interactions with family, close friends, co-workers,
role models, and public figures. In this case, SN refers to
the people surrounding and individual or something that
affects the use of online motorcycle taxis. The dimensions
in this variable are seen from figure influence, media
influence, and public opinion. SN is part of the form-
ing variable of the Planned of Behavior Theory. In this
research model, SN has a relationship with ATT and
CI. In previous research by Weng et al (2016), SN had
a significant effect on ATT but not CI. The research of
Fleischer and Wahlin (2016) SN does not affect the use.
The use of the SN variable in relation to ATT and CI in
using online transportation is relevant to be used and has
been supported in the previous research. In this research,
five indicators (SN1, SN2, SN3, SN4, and SN 5) are used
to understand SN in the use of online motorcycle taxis in
developing countries. The results of this research indicate
that the five indicators are valid and reliable.
Continuance Intention (CI) is defined as the will-
ingness to stop or to reuse an information technology
(Bhattacharjee, 2001). In this case, it is the decision to
use online motorcycle taxis. CI is the dependent vari-
able in this model. The models of TCT (Liao et al, 2009)
and ECM (Bhattacharjee, 2001) focus on the CI as the
dependent variable from other independent variables. The
variables that directly influence CI in this model are PU,
SAT, ATT, SN, and GR. The development of the model’s
validity from this variable is relevant when looking at the
use of online transportation that has been supported in the
previous research model. Four indicators (CI1, CI2, CI3,
and CI4) are used to measure the CI in the two-wheeled
online transportation. The results of this research show
that all relevant adapted indicators are used to see the
online transportation use.
Volume 26, Number 1
Discussion
Based on the results above, it can be concluded
that a modified continuance model based on the TCT
model enable to predict the online transportation
use in Indonesia. Among five independent variables
(Confirmation, Perceived Usefulness, Perceived Ease of
Use, Subjective Norm and Government Regulation) and
two mediating variables (Satisfaction and Attitude) were
proven to be the valid predictors of two-wheeled online
transportation continuation by the respondents. This
finding validates variables in prior studies which were
mostly use developed country setting (Bhattacherjee,
2001; Liao et al, 2009; Tornatzky et al, 1990) to be used
in developing country context. Therefore, this study
found that respondents perception toward the reuse
of two-wheeled online transportation were able to be
predicted by: (i) their experience in using the services
(Confirmation - COM), (ii) usefulness of the online
system in supporting their daily activities (Perceived
Usefulness - PU), (iii) easiness to operate the system
(Perceived Ease of Use - PEoU), (iv) personal judge-
ment that is influenced by their surroundings (Subjective
Norm - SN), and (v) government regulation (GR). These
variables could act as a basis in making the policy on
two-wheeled online transportation by the policy makers
if policy would be taken.
The interesting finding in this study is the validity
of government regulation, it is said that this is the valid
predictors of the two-wheeled online transportation. This
result indicates the importance of government regula-
tion presence in respondents’ perception towards the
reuse of two-wheeled online transportation, yet so far
very limited policy has been issued in regulating this
online transportation in Indonesian local or national gov-
ernment. Indonesian government might mimic London
city council in issuing a policy to regulate online and
conventional taxis without causing a social problem in
the society (Dudley, Banister, and Schwanen, 2017).The
inability of government in issuing a policy that regu-
lates online transportation might hinder the economic
development as this new types of business potentially
improve the economic growth of a city (Jonas, 2016).
Without government regulation the conventional taxi
will be unable to compete with online taxi tariffs, on the
other hand if the regulation is too strict then the potential
economic growth might be hampered. Thus government
should issue a policy that foster economic growth while
maintaining social stability in the society. The regulation
might have different standards for both conventional and
online transportation (Wyman, 2017) as long as it enables
economic, promote stability in the society and protecting
public as the consumer of online transportation (Rauch
and Schleicher, 2015). In order to cope with this issue
government might making a policy that enable public
to choose what service they would like to use but in the
same time maintaining public safety as suggested by
prior studies (Posen, 2015).
CONCLUSION
The presence of two-wheeled online transportation
had led to several social problems in the society. The
 AMBARWATI, NUGROHO, SUHARTO, THE ROLE OF THE GOVERNMENT REGULATION
Indonesian government has been quiet on this issue by
not issuing regulations regarding this matter whereas
the social problems might appear in the near future.
This study tries to identify the variables that affect two-
wheeled online transportation continuance. If the public
still need this mode of transportation so that government
should regulate it to ensure public safety as the consumer.
The results of this study indicate that the public still
wants to continue to use two-wheeled online transporta-
tion in the future and put government regulation as one
of the predictors of this service continuance. Therefore
this study suggests Indonesian government to issue a
Figure 2. Framework
Source: Source by the Author
ACKNOWLEDGMENT
This research acknowledge PNBP UNS 2018 research
grant for funding this study.
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