Longer waiting, more cancellation? Empirical evidence from an on-demand service platform

Abstract

Consumer cancellation disrupts companies’ normal operations and incurs significant costs. This urges companies to understand the reasons for consumer cancellation. However, existing literature has barely discussed consumers’ cancellation behavior in the on-demand service context. This study examines the impact of consumers’ waiting time on cancellation on the on-demand food service platform. We find consumers’ longer waiting time for service production, but not for delivery, increases cancellation. Additionally, merchant popularity and price negatively affect consumer cancellation. Category and location of the merchant moderate the effect of waiting time on consumer cancellation. This study contributes to the cognitive timer theory through highlighting that consumers can have different perceived waiting time when they wait for service production versus wait for delivery. Our findings provide insights for platforms and merchants to cooperate to enhance information transparency and achieve a quick response upon receiving consumer orders to reduce waiting time in the on-demand service context.