Didi Chuxing Technology

DiDi is a Chinese conglomerate that provides taxi aggregator, car sharing and rideshare services. DiDi services at the beginning of 2022 are used by more than 450 million users in more than 400 cities in China and other countries.

History

2023: Sale of Electric Vehicle Division to Xpeng Motors

China At the end of August 2023, Didi, the largest taxi ordering service, announced an agreement to sell electromobile the company's business. Xpeng The transaction amount is approximately $744 million.

As part of the agreement, Xpeng plans to launch a new electric vehicle brand in partnership with Didi in 2024. The project, called Mona, is aimed at the mass market. It is expected that new cars with an electric power plant will be offered at a price of about 150,000 yuan (a little more than $20,000 at the exchange rate as of August 28, 2023).

Xpeng Motors bought Didi service

Xpeng, which has invested heavily in developing autonomous driving systems, said it would consider working with Didi in areas such as fleet management, marketing, insurance, robotaxis, charging infrastructure development, etc. In turn, Didi will receive a 3.25% stake in Xpeng under the terms of the agreement.

For Didi, the deal marks a departure from the automotive business that was once seen as a potential driver of the company's growth. At the same time, Xpeng, having bought Didi's electric car assets, will be able to eliminate a potential competitor in the crowded Chinese market.

The PRC electric car industry has great potential, but companies that entered the market late have little chance of success due to fierce competition. The deal allows Xpeng to take advantage of Didi's business platforms to promote its vehicles, said Cao Hua, a partner at Shanghai-based private equity firm Unity Asset Management.

After the deal, Xpeng will continue to develop the mobility ecosystem as well as autonomous driving technology. In addition, the possibility of bringing new budget electric vehicles to the international market is being considered.^[1]

2022

Fine of $1.2 billion for illegal collection of user data

At the end of July 2022, the largest Chinese online taxi ordering service Didi received a $1.2 billion fine from the Cyberspace Administration of China for illegally collecting user data. The Chinese authorities decided to impose a fine after an investigation that lasted a whole year revealed serious violations of the country's data security laws.

The violations turned out to be so serious that there should be a serious fine of $1.2 billion, the cyberspace department of China said. Company executives, namely Chief Executive Chen Wei and President Jeanne Liu, were also fined. Managers will have to pay about $150 thousand.

Chinese authorities fined Didi $1.2 billion

The use of users' personal data for commercial purposes is an everyday part of the work of IT companies, and they can hardly be blamed for this, because users voluntarily consent to this in the user agreement. However, it happens that the collected data is obtained from third parties, or the information that the user did not agree to disclose is processed. Protecting users from illegal and illegal use of their data in such situations is the responsibility of the Cyberspace Administration of China. On November 3, 2021, China limited the collection of personal data in social networks and instant messengers, and operators of 38 mobile applications received an order to stop illegal collection of personal data of users.

In a statement posted on an official account on China's Sina Weibo, Didi said it would follow the decision of the Chinese authorities. The company will conduct its own investigation to comply with relevant regulatory requirements received from the Chinese Authority. According to Chinese media reports, the listing never received clear approval from Chinese authorities, and all 26 Didi apps were subsequently removed from app stores in China.

In a statement, China's Cyberspace Authority did not say whether the apps would be returned to the network or not. Instead, the agency detailed violations committed by the company that the cybersecurity watchdog said began as early as 2015. Didi collected an excessive amount of personal information, including user addresses, biometric data, as well as their screenshots stored in the phone's albums. The company was also convicted of engaging in data processing activities that seriously threatened China's national security. Didi refused to comply with regulatory requirements and specifically evaded regulators, China's Cyberspace Authority said in a statement.^[2]

The company changed its mind about leaving Russia

On Saturday, February 26, 2022, the Chinese taxi operator Didi Global announced that it would continue its activities in Russia, canceling the decision announced on Monday to leave this country, as well as from Kazakhstan.

Announcement of termination of work in Russia and Kazakhstan

In February 2022, it became known that the Chinese taxi service Didi will stop working in Russia and Kazakhstan from March 4, 2022.

2021

Dismissal of 90% of employees in Russia

On January 19, 2022, it became known about the massive reduction in DiDi staff in Russia. But by this time, the Chinese taxi aggregator, as assured in the company, continues to work in 40 cities of the Russian Federation.

As three sources in the taxi market told RBC, DiDi is cutting the number of personnel in its central office in Russia. According to one of the interlocutors, at the end of 2021, up to 90% of employees were laid off. Some of the workers who left the company turned to competing taxi aggregators on the issue of employment. The publication notes that among them were those who held "rather high positions." DiDi itself refrained from commenting.

As the reason for the cuts in the Russian office, one of RBC's interlocutors named the problems with the Chinese authorities that the aggregator's parent company faced during 2021. DiDi drew Beijing's ire when the company continued its New York float despite regulatory demands to secure its data ahead of its IPO.

DiDi laid off 90% of employees in Russia, they go to competitors

In Russia, Didi was suspected of a potential threat to national security. According to the association "National Taxi Council," it may be related to the processing of personal data of passengers on foreign servers.

If DiDi is really experiencing difficulties, this is bad for competition and the market as a whole, the press service of the taxi aggregator Maxim, which filed a complaint against DiDi with the Federal Antimonopoly Service, told the publication.

In addition, the head of the Ministry of Digital Science Maksut Shadayev and the chairman of the committee on information policy, information technology and communications of the State Duma Alexander Khinshtein expressed concern about foreign expansion into the Russian taxi market and proposed limiting the work of foreign services.^[3]

2021

Didi begins preparations for exit from American stock exchanges

In December 2021, Didi began preparations to exit American stock exchanges and list in Hong Kong, planning to apply in March 2022.

Shares of the company are down about 44% since debuting in June. Didi is likely to be the biggest drop among Chinese companies in the first half of the year, according to Bloomberg data.

The transition of the controlling stake of the company to the Beijing administration

According to Bloomberg sources for September 2021, the Chinese giant for the provision of passenger transportation services DiDi Chuxing has come (or will soon) under the control of the Chinese authorities.

Under the new agreement, the Chinese government through the city of Beijing will have a controlling and majority stake in the company, manage the company and manage its day-to-day operations.

Beijing has offered to invest in DIDI to state-owned companies.

Going public with the NYSE

At the end of June 2021, Didi entered the New York Stock Exchange, placing shares there under the ticker symbol DIDI. Thanks to the IPO, the Chinese taxi aggregator earned $4.4 billion, and this listing in the United States turned out to be the largest for companies from China since the Alibaba deal in 2014, when it raised $25 billion.

As part of the listing, Didi planned to sell 288 million depositary shares at a price of $13-14 apiece, but the demand from investors was higher. According to Reuters, the company sold 314 million securities for $14/pc. This allowed Didi to be valued at $73 billion, but in March 2021 the company hoped for a higher market capitalization - from $80 billion to $100 billion. The lower valuation comes as investors worry about the company's growth prospects and scrutiny from Chinese authorities.

Taxi aggregator Didi, operating in Russia, entered the NYSE exchange and earned $4.4 billion

Earlier in June 2021, the State Office of Market Regulation launched an antitrust investigation into Didi. The regulator is checking whether Didi used any non-competitive practices to force smaller services out of the market, and whether the pricing mechanism operating in its taxi ordering service is quite transparent.

Didi held an IPO just three days after the start of the road show, and due to the time difference it communicated with investors in virtual mode, The Wall Street Journal newspaper notes, citing informed sources. Presenting the IPO, the service focused on the scale of operations and the potential for further business development.

By the end of June 2021, Didi offers ride-hailing services in 15 countries outside, China including,, Australia,, New Zealand,, Japan,, Brazil,, Mexico,,,, and Chile Colombia. Peru Costa Rica Panama Russia Dominican Republic Ecuador Argentina^[4]

2020

China's Didi plans to launch 1 million robo-taxis on PRC roads by 2030

The company from China Didi Chuxing plans to launch more than 1 million unmanned robo-taxis (robotaxis) in China by 2030. In May, the company raised $500 million to finance its autonomous unmanned taxi division. ^[5].

In the past 2019, Didi announced that the first unmanned taxis will appear in Beijing, Shanghai and Shenzhen back in 2020, but have not yet worked out.

At the same time, analysts emphasize that people will need some time to begin to trust driverless cars without a driver.

Currently, there is already an example of working robo-taxis in China: this is the Guangzhou-based WeRide company, which already has 40 robo-taxis and 60 more test cars are being tested. This company is supported by Nissan, Renault and Mitsubishi.

Baidu also began offering robo-taxi services in the city of Charsha in 2019.

Company registration in Russia

On May 18, 2020, it became known that the Chinese taxi ordering service Didi Chuxing created Didi Mobility Rus in Russia. Judging by the data of the Kontur. Focus system,  this company is owned by the Singapore-based Didi Mobility Pte. LTD. " (99.9%) and Travis International Group Hong Kong Limited (0.1%). Read more here.

Using facial recognition to check driver identity and sleepiness

In early January 2020, the largest taxi service in Asia, Didi, began using artificial intelligence facial recognition technology in its cars. The system is used to check the identity of drivers, as well as to detect drowsiness while driving.

Didi has launched a pilot project to assess the effectiveness of the new system in several cities in China. The company claims that in order to protect confidential data, all information collected will be encrypted and available only to security teams in case of accidents. The facial recognition system will use special cameras that confirm the identity of the driver through a special application on the client's smartphone, and also assess his drowsiness. In addition, the system uses GPS and accelerometer data to identify dangerous driving patterns.

Didi taxi started using facial recognition technology in its cars

Didi announced the new technology in preparation for the Chinese New Year, which is considered the period of the largest annual migration of people within the country. Didi, however, is not the only taxi company looking to keep its customers safe. Its main competitor - Uber - is also rolling out a campaign to combat sleepy driving, but the company has opted for a less high-tech approach. Uber simply uses special notifications and automatically blocks the app for drivers after 12 hours of operation.

One way or another, waking drivers is of paramount importance for safety, and Didi is not alone in developing technologies for assessing their sleepiness - for example, companies such as Boch and Panasonic are doing the same. Some of these systems are so smart that they do not allow drivers to fall asleep by reducing the temperature in the cabin or vibrating the front seat, the South China Morning Post notes.^[6]

Notes