On January 16, Chinese rideshare behemoth Didi was given the green light to resume new user registrations in China, putting an end to its 18-month-long regulatory-driven revamp.
“Over the past year, our company has earnestly cooperated with the country’s cybersecurity review, seriously dealt with the security problems found in the review and carried out comprehensive rectifications for more than one year,” the company stated in an official Weibo post.
“With the consent of the Cybersecurity Review Office, new user registration of ‘Didi Chuxing’ will be resumed from now on. In the future, the company will take measures to effectively ensure the security of platform facilities and the security of big data, and maintain national network security,” it added.
In 2021, Beijing ordered Didi to take down its 25 mobile apps from app stores and suspend new user registration on grounds that it did not comply with data protection laws. The company was subsequently fined a whopping 1.2 billion USD over data security breaches. To make matters worse, the ride-hailing company was forced to remove itself from the US Stock Exchange after only 11 months of trading.
Without a doubt, the suspension of new user registration in China coupled with the removal of its mobile apps has curbed the company’s growth. Prior to its listing on the US stock exchange, Didi boasted a grand total of 337 million active users in China, about 86% of its global user base. In 2021 alone, 92% of its revenue was generated from its mobile transportation services. Following the announcement of the cybersecurity investigation, Didi’s stock price had plunged 13% by the end of 2021.
Now having paid off its fines in full, Didi is ready to push the pedal to the metal and get back into the race of recruiting new customers. Regulatory woes aside, however, the ride-hailing company will now have to face rising industry rivals such as Geely and SAIC Motor, companies which equally seek to capture the rideshare market.
All in all, the latest move signals that Beijing is beginning to ease its grip on its internet giants which faced an excruciatingly long two years of chaotic clampdowns. Looking ahead, policymakers are counting on tech companies such as Didi in hopes of restoring private sector confidence and driving economic growth that was ravaged by the pandemic.
