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Safety is a major considering factor of passengers taking a transportation vehicle. For a passenger transportation company, to ensure passengers' safety is done by entrust the drivers. From the agency theory perspective, the company-driver relationship can be viewed as principal-agent where the company is the principal and the drivers are agents. The principal-agent relationship is binded by employment contract in so doing to ensure driving safety. Normally, the payment to the drivers mainly is based on the driving mileages that might easily lead to fast driving to accomplish the task assuming the drivers are economic men. However, the company would put its first priority in safety driving for earning the customers' trust and preference in advancing its competitive advantage and operating profits. Consequently, there must be a conflict between principal and agent in seeking their goals. Therefore, this research is to investigate whether if when principal has sufficient information about the execution of agent's behavior the agent would behave accordingly for the benefit of principal. This research uses Aloha passenger transportation company as a case study. Aloha tested the VDO information monitoring system in the year of 2004 and deployed the system in 2005. This research is to find out whether the deployment of VDO system, i.e., when the principal holds sufficient information to ensure the agent's behavior of doing contra deeds, the drivers would help the company achieving the company's goal or the company's competitiveness is improved. By the comparison of driving records of before and after the installation of monitoring system, and the comparison of Aloha and its competitors' driving records this research would provide a relatively objective observation and analysis. Three sources of data are used for empirical analysis: the internal driving records of Aloha, major emergency and accident statistics from highway police bureau, and the customer satisfaction survey are used for this empirical research. The multiplicity of the research data is one of the major contributions of this research whereas a longitudinal data analysis is the other contribution. Through the analysis this research confirmed that the accident rate of the company indeed is reduced after the installation of VDO system. When compared with competitors, Aloha enjoyed lower emergency and accident counts from the traffic authority. Moreover, Aloha is ranked the highest in the ability to ensure the passengers safety and customer satisfaction. This result demonstrated that when the drivers (the agents) know that the company (the principal) holds the driving records which reduces the asymmetry of information, the drivers will try their best to comply the contra behavior. This observation confirmed the point raised by Eisenhardt (1989, p. 60): " When the principal has information to verify agent behavior, the agent is more likely to behave in the interests of the principal." The principal (Aloha) ensures its safety to passengers and advances its competitive advantages.
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