Cab service Didi cancels launch in Ukraine and some other markets
About a year ago, AIN.UA reported that the cab service Didi was planning to launch in Ukraine. Subsequently, it was confirmed by the first job opening. It is already February 2022, but the service has never been launched. The editor of AIN.UA found out the reasons and shares why it will not appear in Ukraine.
Didi is a Chinese cab service with the majority of its users from there. In 2020, the service began its expansion to post-Soviet countries and planned to launch in Ukraine and other Central-Eastern European countries. The first ones were Russia (November 2020) and Kazakhstan (May 2021).
In 2021, the company started to build a team in Ukraine and even opened an office for it. Didi planned to enter the market by the end of 2021. But the Ukrainian team of 10 people worked on development in other locations.
Chinese government ruins all plans
At one point, all Didi’s plans were turned upside down because of the government’s actions.
- June 30, 2021 — Didi goes public in New York and raises $4.4 billion, the biggest IPO for Chinese companies since Alibaba’s IPO in 2014.
- July 4, 2021 — The Chinese government demands Didi stop signing up new users in its home market, as well as remove its application from local online platforms. The government is not satisfied that the service went public in the US and not in China. However, its official version says that Didi collects a lot of information about Chinese residents, and this information could be lost/stolen.
- At the end of July, it was reported that Didi could become partially state-owned: officials would be given a so-called golden share with the right to veto any decision.
- On December 3, 2021, Didi announced its delisting from the New York Stock Exchange. The company was returning to China.
Winding down of development
Probably, if it were not for the actions of the Chinese government, the company would have entered the new market. But the Ukrainian office has been closed, and the employees — fired. There is no plan to enter Ukraine at the moment. Moreover, there were cuts in other markets as well.
Why it is interesting: The cab services currently working in the Ukrainian market can breathe a sigh of relief. If Didi had entered the market, it would have taken a significant market share. As a result, other players would have needed to incur additional costs to retain customers. Besides that, they would also have had to fight for drivers, who are already in short supply in big cities. The Ukrainian customers and drivers, of course, would have benefitted.