Didi Chuxing Updates
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China’s leading driving app, Didi, has dropped its daily users by 30 percent since its initial public offering in New York in June caused a severe backlash from Beijing.
In the days following Didi’s IPO, Chinese regulators banned the company from registering new customers while conducting a data security investigation. Regulators have also ordered app stores to remove 25 of Didi’s other programs, including those registering new drivers.
Didi shares have fallen more than 40 percent since the stock market and its competitors began attracting its customers with promotions.
Data from Aurora Mobile, which examines the behavior of Chinese mobile users, shows that Didi’s average daily number of users for August fell to 10.9 million, from 15.6 million in June. The main competitors either increased their user numbers or decreased by a smaller share.
Based on the historical sign-up rate, the ban on opening new client accounts deprives Didi of about 4 million users per month.
The company has yet to report its earnings to its U.S. shareholders in the second quarter and has not indicated when that will happen. Most companies reported weeks ago.
Didi did not respond to repeated requests for comment on its daily users or its financial reporting plans, and as a foreign issuer he is not required to report quarterly financial statements.
Separately, figures from the Chinese Department of Transportation show that the number of travel companies that completed more than 300,000 monthly trips increased to 17 for the first time in July.
“After I started using Amap, I found it more convenient, with more options,” said a 26-year-old nickname Jiang in Beijing. He turned to Alibaba’s Amap, which collects suppliers, after waiting times for Didi cars rose after government action.
Competitive Chinese groups for visitors have offered a slew of promotions and discounts to lure away both Didi users and drivers.
“Meituan is giving away a lot of cash bonuses to newly registered drivers,” said a manager in Beijing who left Didi to Meituan’s platform in mid-July to take advantage of the opportunity.
“We all knew it could be a big change. . . it was indeed an opportunity, ‘Gong Xin, head of rival Cao Cao Mobility, told local media. Cao Cao raised R3.8 billion ($ 591 million) from a group this month state-owned funds to accelerate its expansion.
New rules announced by the Department of Transportation last week could also hamper Didi’s long-term operations. The rules prohibit zip services from taking unlicensed drivers or cars on board, and require suppliers to speed up the process of non-compliance in their existing driver and vehicle pool.
The authorities have kept the matter blind for several years and Didi and the subsidiary Piggy Express were beneficiaries. Every month this year, they are part of the rides that fully meet the rankings below the bottom level of China’s zipper suppliers, according to the government.
Only 41 percent of the Didi rides were fully compliant in July, while Piggy Express stood at just 24 percent, according to data from the Department of Transportation.
Some analysts still believe that Didi can withstand the storm.
“Didi is still the largest player in the market and consumer change could be temporary if Didi acts to address their concerns,” said Guo Shan, an analyst at Consultant Plenum in Beijing.
‘Regulations can have a greater impact. “If Beijing asks Didi to split or abandon their exclusive agreements with managers, it will be much easier for its competitors to take its market share,” she said.
Guidelines for cyber security investigations indicate that the process should be completed within three months, but Didi said very little about its progress.
Additional post by Nian Liu and Emma Zhou in Beijing