China Ride-Hailing Firm Didi Says Q4 Revenue Rises 7.1% as Demand Recovers After Crackdown

Post by: Omar Nasser

Photo : Reuters

Chinese ride-hailing company Didi Global shared that its fourth-quarter income went up by 7.1%, reaching 52.9 billion yuan ($7.32 billion). This growth shows that more people in China are using travel services again, even though the country’s economy is moving slowly.

However, Didi reported a loss of 1.3 billion yuan during the quarter, unlike the 45 million yuan profit it made during the same time last year. The company said the loss was mostly because of non-business reasons, including investment losses of 742 million yuan. It also adopted new accounting rules, which affected its financial results.

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Didi’s troubles with China’s government began in 2021 when it launched its U.S. stock market listing without getting approval from Chinese officials. This led to a government investigation, banning Didi from adding new users and removing many of its apps from stores. In July 2022, Didi was fined $1.2 billion by China’s cyberspace watchdog for breaking data security rules. The company was also removed from the U.S. stock market that year. However, in early 2023, Chinese regulators allowed Didi to relaunch its apps, helping the company get back on its feet.

In the fourth quarter, Didi handled 3.25 billion ride requests across its platforms in China. This was a 10.8% increase compared to the same time last year. Despite facing new rivals, Didi remained the top ride-hailing service in China. Companies like Alibaba and Meituan have entered the ride-hailing business by adding these services to their apps. They act as middlemen by linking riders with various smaller ride-hailing providers, unlike Didi, which operates its own service.

Didi’s business outside China also grew during the quarter. It made 3 billion yuan from its international operations, which was up from 2.2 billion yuan a year before. The company has a strong presence in countries like Brazil and Mexico, which helped boost its global income.

To focus on its main ride-hailing business, Didi has been selling off parts of its company that are not core to its operations. In August 2023, it sold its smart cockpit unit to NavInfo, a state-backed mapping company. Didi also sold most of its electric vehicle (EV) business to Chinese carmaker Xpeng. This move shows that Didi is aiming to focus on its main transport services instead of vehicle-making.

Despite the losses and challenges, Didi's rising income and growing ride requests show that it is making a steady comeback. With more people using its services and its overseas business expanding, Didi seems to be getting stronger again. However, the company still faces tough competition from digital platforms that are also offering ride-hailing services.

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