The Demise of DiDi

Issue 87

The take no prisoners approach that brought so many American tech start-ups to be multi-billion-dollar cash cows, apparently does not work in China, well not for long.  Companies like Uber, Lyft, Airbnb, Bird, and Lime all rushed into markets with all the force of a panzer division seeking to grab as much market share as possible breaking plenty of rules in the process.  DiDi, China’s leading ride-hailing giant mimicked the same model and now it’s paying the price.

When DiDi got its big break in 2012 it lacked the necessary state licenses to conduct its business.  Major Chinese cities demanded that ride-hailing drivers needed to bee local residents something that DiDi protested and ignored.  Today the company still remains out of compliance.  It continued to under-invest in real-time trip data citing privacy concerns until the company had two heinous crimes committed against its passengers.

Even then, Beijing largely let the company continue to play in gray legality as it rose to become the largest ride-hailing platform on the planet.  Now the government is moving to bring the entire Chinese tech sector to heel with state-orchestrated app store bans, crackdowns, fines, and even having government officials camped down in the company’s offices.  Unlike ByteDances government squeeze, there is no subtly to be found here once.  

Source: New York Times