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RIDE FLAILING

China is reining in one of its most successful tech businesses just days after its US IPO

A stock trader with a US flag emblazoned on his sleeve works in front of a screen displaying the logo for Chinese ride-hailing app Didi on the floor of the New York Stock Exchange.
Reuters/Brendan McDermid
  • Nicolás Rivero
By Nicolás Rivero

Tech Reporter

Published

China’s cybersecurity regulator has ordered all app stores in the country to block downloads of Didi Chuxing, China’s biggest ride-hailing app. The Cyberspace Administration accused Didi of improperly collecting and using its customers’ personal data.

For now, the app’s existing 600 million users and drivers customers can continue using Didi normally, so long as they have already downloaded the app. But new customers will not be able to start using the service until the company addresses the regulators’ data concerns.

“Didi will fully cooperate with the relevant government authority during the review,” the company said in a statement.

Didi’s ban follows a major US IPO

Beijing announced the download ban today (July 4), just days after Didi completed a $68 billion initial public offering on the New York Stock Exchange. It was one of the largest US IPOs in recent years, and the latest in a record-setting string of listings by Chinese companies on US exchanges. The listing was done the day before China’s Communist Party celebrated its 100th anniversary on July 1.

Didi’s valuation quickly crashed after Beijing announced an investigation into the company’s cybersecurity practices on July 2. Its shares fell more than 10% following the announcement, but eventually regained some of the lost ground. Chinese authorities have banned Didi from registering any new users for the duration of the investigation.

The download ban comes amid a broader crackdown on the power of major tech platforms in China, including Alibaba and Tencent, which have both faced antitrust scrutiny this year. Reuters reported in June that Didi also faces an antitrust probe.

Didi’s fate will also impact the fortunes of its biggest rival, Uber. The US ride share giant owns a 12% stake in Didi, meaning that any swings in the Chinese firm’s valuation could mean the difference of hundreds of millions of dollars in Uber’s assets.

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