Chinese taxi app Didi has told staff it has put plans for major international expansion on hold until at least 2025 and cut its UK staff in half under pressure from Beijing on one of its tech companies. more important.
Didi Chuxing has been on the back burner since last summer when the Cyberspace Administration of China, a powerful regulator, banned the country’s leading ride-sharing company from listing its app on the country’s mobile app stores.
The ban came just days after the company listed on the New York Stock Exchange and sent shockwaves through China’s tech sector. The move was widely seen by analysts as an attempt by the ruling Communist Party to rein in the country’s tech companies after their market value and power grew rapidly.
Didi, which is backed by Japanese investment firm Softbank, announced in December that it would withdraw its equity instruments from New York, and the U.S. Securities and Exchange Commission is investigating the initial public offering, according to the company’s latest annual report. The shares which were worth nearly $80bn (£65bn) when they went public were valued at just $7.6bn as of Tuesday night.
Didi had previously planned to launch in the UK and Europe, with an office in London which would have overseen a direct challenge to other transport and food delivery companies such as Uber in the US and Bolt in Estonia. Uber is also Didi’s second largest shareholder after pulling out of China in exchange for a 12% stake in its rival.
However, it halted that expansion in August following the Chinese crackdown and, at a meeting in February, told staff in several markets it would halt until 2025, according to a person familiar with the meeting. Didi announced last month that he would also withdraw from South Africa.
The company had around 40 employees in the UK, many of whom have left the Latin American markets where Didi retains a strong presence. About half of these staff will remain in London but work in other markets after consultation. Didi recently announced expansions in Chile and the Dominican Republic, and also holds strong positions in Mexico and Brazil.
There are other signs that Didi could come under pressure from the Chinese government, including a swift reversal on the decision to withdraw from Russia, an ally of China, as Nikkei first reported. .
On February 21, three days before Vladimir Putin’s regime invaded Ukraine, Didi announced to staff that he would withdraw from Russia by March 4. The company wrote to drivers informing them of the decision, but within five days – soon after the invasion began – it had announced it would stay in the country.
A spokesperson for Didi did not comment on the company’s plans beyond highlighting its recent expansions into South America and Egypt.