Didi loses 30% of daily users after Beijing crackdown following IPO

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Didi update

Didi, China’s leading ride-haling app, has seen a 30% drop in daily users since its initial public offering in New York in June caused a fierce backlash by Beijing.

In the days following Diddy’s IPO, Chinese regulators banned the company from registering new customers while conducting ongoing data security investigations. Regulators have also ordered the app store to remove 25 of Diddy’s other apps, including apps that register new drivers.

Didi’s share price has fallen by more than 40% since IPOs and their rivals began to seduce customers with promotions.

According to data from Aurora Mobile, which surveys the behavior of mobile users in China, the average daily number of users of Didi in August fell from 15.6 million in June to 10.9 million. Its main rivals have increased the number of users or reduced the rate of decrease.

Based on past registration rates, Didi is robbing about 4 million users a month due to the ban on opening new customer accounts.

The company has not yet reported its second-quarter earnings to US shareholders and has not announced when to report them. Most companies reported a few weeks ago.

As a foreign issuer, Diddy is not obliged to report quarterly financial statements in response to repeated requests for daily users and comments on financial reporting plans.

Apart from this, China’s transportation sector figures show that the number of dispatching companies that completed more than 300,000 rides a month increased to 17 for the first time in July.

“Since I started using Amap, I’ve found it more convenient and more options,” said a 26-year-old man named Jiang in Beijing. He turned to Alibaba’s Amap, a collection of ride-haling providers, after government action increased the waiting time for Diddy cars.

The competing Chinese ride-hailing service group is rolling out numerous promotions and discounts to seduce both Didi users and drivers.

“Meituan offers a wealth of cash bonuses to newly registered drivers,” said one Beijing driver who left Didi for the Meituan platform in mid-July to take advantage of this opportunity. ..

“Everyone knew that this could be a big change .. .. Cao Cao, head of rival Cao Mobility, told local media this month. State-owned funds Accelerate its expansion.

The new rules announced by the transport sector last week could also hinder Diddy’s operations in the long run. The rule prohibits unlicensed drivers and vehicles and requires providers to “speed up” the process of removing violations of existing drivers and vehicle pools.

Authorities have been blind to the issue for several years, with Didi and its subsidiary Piggy Express being the beneficiaries. According to government data, every month this year, the percentage of fully compliant vehicles is ranked at the bottom of China’s vehicle dispatch providers.

According to transportation sector data, only 41% of Diddy’s vehicles in July were fully compliant, while Piggie Express was only 24%.

Still, some analysts believe Diddy may be able to survive the storm.

“Didi is still the biggest player on the market, and if Diddy acts to address concerns, consumer transfers will be temporary,” said Guoyama, an analyst at Beijing-based consultancy Plenum. It could be. “

“Regulations can have a bigger impact. If Beijing asks Diddy to split or abandon its exclusive contract with the driver, it will be much easier for competitors to eat up market share.” She said.

Cybersecurity research guidelines state that the process should be completed within three months, but Didi makes little mention of its progress.

Additional report by Nian Liu and Emma Zhou in Beijing

Didi loses 30% of daily users after Beijing crackdown following IPO Source link Didi loses 30% of daily users after Beijing crackdown following IPO

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