This Financial Times article today spelled out just how fucked DiDi is. Here’s a quick summary and my analysis of the situation.
While DiDi recently accounted for 90% of ride-hailing bookings, they’re not the only player in the game. Two of them in particular, Cao Cao and T3, have been going apeshit on customer promos and driver incentives since DiDi’s apps got pulled from app stores. They’re also accelerating their plans to expand into new cities. Worst of all, China’s leader in food delivery, Meituan, also just entered the ridesharing game last week. Crazy timing, that. Surely it’s a coincidence right?
It gets worse. At DiDi’s current growth rate of about 50m new users per year, the app store ban theoretically costs more than 4m users every month. Those are customers that can and will choose a competitor instead. Rideshare growth in China mostly comes from expanding to underserved regions, so DiDi essentially won’t be able to establish any presence in new markets until the investigation closes.
So, clearly, the CCP is going for DiDi’s neck here. They don’t want their tech giants listing on foreign exchanges anymore. I think DiDi could be made an example of. They are certainly replaceable. It’s not a leap of the imagination for Meituan to emerge as the new rideshare leader. And China-US relations are already pretty fucked, so there’s not much perceived downside to burning US investors.
I bought DiDi at IPO and sold yesterday for a 20% loss. I don’t regret a thing. Fuck the CCP, fuck Winnie the Pooh, and fuck communism.
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