Didi Chuxing
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Didi Chuxing’s mobile application seen on a smartphone in Shanghai on July 3, 2021. Photo: EPA-EFE

Didi freezes Europe, UK expansion for a year amid data and cybersecurity concerns

  • Didi has suspended plans to expand in Europe for at least a year, including several British cities, and some jobs will be cut
  • The ride-hailing giant continues to face pressure at home resulting from a cybersecurity review from the Cyberspace Administration of China
Didi Chuxing
Didi Global Inc suspended plans to expand in Europe partly because of concerns over how the Chinese ride-hailing company handles passenger data, according to a person familiar with the matter.

Plans to challenge Uber Technologies Inc in Europe, including several British cities, have been tabled and some jobs will be cut, said the person, who asked not to be identified discussing private information. The European expansion will be paused for at least a year, according to The Telegraph, which earlier reported the news of the suspension.

“We have established an international talent hub in the UK, recognising the exceptional quality of people in the market,” a company spokesperson said in a statement. “Beyond that, any personnel matters remain strictly confidential.” The Didi spokesperson also said that the company will “continue to explore additional new markets”, and had recently launched services in South Africa, Ecuador and Kazakhstan. 

Didi expands ride-hailing market share despite Beijing’s crackdown

The Chinese transport giant had initially considered rolling out service in European markets including the UK, France and Germany as soon as the first half of this year, people familiar with the matter told Bloomberg News in February. At the time, the company was hiring locally and setting up a team dedicated to Europe, they said.

The news that the company, which is dominant in China, might be expanding sent shares of potential rivals, such as Uber and Berlin-based Delivery Hero SE lower. Didi began offering car-hailing services in Russia last year, marking its first direct foray into Europe, and it’s already an investor in Estonia-based Bolt Technology OU.

Didi will survive the storm but profitability may be capped

But since then, China has begun a regulatory crackdown on ride-hailing fees. The new restrictions could cut Didi’s margin in the business in half, according to calculations from Bloomberg Intelligence analysts. The new regulation “may accelerate an exit from unprofitable international markets where it faces unrelenting competition in ride sharing”, the analysts wrote in a report. 

Didi said last month that it would halt registration of new users during a Chinese government review into its cybersecurity practices. The Cyberspace Administration of China said the move is to prevent data security risks, safeguard national security and protect public interest. 

In an article in The Times earlier this month, UK lawmakers had also called for Didi’s roll-out in the country to be closely monitored over concerns that local user data could be accessed by China. 

This article appeared in the South China Morning Post print edition as: Didi puts Europe expansion on hold