Rivals are rushing to take advantage of security crackdown on Chinese Didi

Didi Chuxing’s rival apps are rushing to lure drivers and users as they try to take advantage of a cybersecurity crackdown against the Chinese travel market leader after its overproduction in New York.

Didi explains 90 The percentage of all car reserves in China, however, is estimated at 230 applications in the country trying to eliminate its leadership, accelerating expansion plans, offering discounts and increasing incentives for drivers, analysts said.

Many of Didi’s rivals are also backed by major Chinese carmakers. Cao Cao, a Geely app that uses electric cars, has recently reduced the prices of digital coupons that offer users various discounts and benefits by nearly a third.

T3 Chuxing, an Nanjing-based online taxi booking service launched by three of China’s largest automakers, including the FAW group, has announced plans to expand to 15 cities. according to an internal note quoted by Chinese media. The company did not respond to any requests for comment.

Didi also faces an onslaught Meituan, The main food delivery platform in China. Last week, the group relaunched its travel platform, which it abandoned in 2019, and offered Rmb100 drivers ($ 15.50) to join.

The China Cyberspace Administration investigation was announced two days later July’s initial public offering of $ 4.4 billion from Didi, the largest in the United States this year. The investigation, which could last up to ten weeks, came after the CAC asked Didi to consider it. delaying IPO even after an internal review of the security of your data, according to people familiar with the matter.

Didi years ago dominated the country’s on-demand transportation sector, which acquired the Chinese business from the U.S. group Uber in 2016. Uber held a stake in Didi alongside Japan’s SoftBank and China’s Tencent.

Didi’s main transport platform has been banned new user registration until the probe is completed, a development that jeopardizes its market share and expansion plans. Its platform and 25 others used by Didi employees and drivers have been removed from China’s app stores on the grounds of “serious violations” of personal data legislation.

Didi “fought with his hands tied behind his back,” said Tu Le, founder of Beijing-based consulting firm Sino Auto Insights.

Didi was caught in the pressure of investors to show he could grow and avoid angering regulators, Le added. “They will hesitate to do anything until the audit is completed.”

Didi’s goal for investors during last month’s brief roadshow was that it would continue to expand targeting dozens of medium-sized, underserved cities.

According to calculations by the Financial Times, at the current rate of growth of the company of about 50 million users a year, the shutdown of records under the ban on the app store could cost Didi more than 4 million of users for each month being investigated.

While undergoing the CAC probe, Didi sets its hopes for expansion on Piggy Express, a cheaper service launched in March 2020 aimed at younger users in smaller cities that was not withdrawn from stores. Chinese applications.

Analysts said Didi needed to retain his fleet of drivers as competition increased. In May, China’s transportation ministry warned the company and other travel groups not to charge high drivers’ commissions, forcing Didi to publicly explain why some had charged 30 percent of the fares.

But Didi’s efforts to keep his drivers could threaten his cost controls. In the first quarter, the company reduced earnings and other incentives it pays drivers to $ 5.7 billion, from $ 19.2 billion in the same period in 2020.

A driver from Didi in Beijing told FT that Didi had recently increased the subsidies he pays drivers to 100-150 Rmb for 30 trips.

However, the driver added that the municipal transport police had begun in recent weeks to make stricter checks on transport permits and suspend those who breached the rules for three months.

Didi “can only lose drivers,” he said.

Additional reports from Emma Zhou and Nian Liu in Beijing