China's Didi will remain in Russia

China's Didi  will remain in Russia

The Chinese taxi service Didi changed its mind about leaving Russia, two sources told Izvestia - in the company and in the taxi market. Didi announced the cessation of work in our country from March 4 on February 21. As "Izvestia" found out, the service will keep the application running, but will cut the entire management team. Russian employees of the service attribute the change of plans to the need to support Russia amid the isolation of the market after the start of the military operation in Ukraine. Didi may also try to buy Uber's stake in Yandex.Taxi, experts have not ruled out.

Chinese partner
The Chinese taxi service Didi abandoned plans to leave the Russian market and will continue to work in our country, a source in the company and an interlocutor in the taxi market who is familiar with the situation told Izvestia.

- Didi will continue to work in Russia, but the entire Russian staff of the company is being reduced. The service will be managed directly from China, a source in the company said.

He clarified that now all driver initiatives (programs for additional payments to driver partners, the so-called guaranteed income) are included in the internal program of the service until April 18. That is, at least until this date, the service will work in Russia.

According to the source, parent holding Didi Chuxing will not invest in the development of the application and business in Russia. The service will work on its own, he said.

Another source confirmed that the taxi app will continue to work.

Before the cuts, the staff of Didi in Russia was about 350 people, and today it is no more than 10, the source added. Now the service continues to operate in 38 cities, including Belgorod, Bryansk, Vladimir, Izhevsk, Yoshkar-Ola, Kursk, Lipetsk, Naberezhnye Chelny, Orenburg.

Route rebuilt
Didi announced her departure from Russia on February 21, a year and a half after starting work in the country. The company explained this by "changing market conditions and other challenges" that did not allow for the best results in Russia and Kazakhstan. Irina Gushchina, PR director of Didi in Russia, reported that the service would become unavailable from March 4.

As one of the sources on the market told Izvestia, the planned withdrawal was due to the tightening of inspections and control over the operation of the service by Chinese regulators. Chinese authorities have launched an investigation into competition violations by five Chinese taxi services (including Didi). The companies are also suspected of the lack of a transparent mechanism for setting prices, transferring orders to drivers without documents, violating the order of work and rest of taxi drivers.

In addition, the Chinese authorities opposed the listing of shares of Didi Chuxing on the New York Stock Exchange. The company held an IPO in June 2021, raised $4.4 billion during the placement. In December, Didi's board of directors approved the delisting of the company's securities from New York and the placement of shares on the Hong Kong Stock Exchange.

However, on February 26, in a microblog on the Chinese platform Weibo, Didi unexpectedly announced that she would continue to work in Russia. The report did not specify the reasons for this decision. All last weekend, the company's management in the Russian Federation had no information whether the service would work in the country or not, said a source on the market.

— There is talk among Didi employees in Russia that the decision to stay was due to the situation in Ukraine. Allegedly, Didi, as a Chinese company, decided to support the Russian Federation, one of the interlocutors said.

The representative of the service in Russia did not respond to Izvestia's request. The editors also asked the press service of the global office for comment.

Irina Zaripova, Chairman of the Public Council for Taxi Development, believes that in order to build a high-quality Didi service in Russia, it is necessary to have Russian-speaking staff to communicate with taxi companies and technical support to resolve issues from drivers and passengers.

- We doubt that it will be possible to successfully manage the business without having staff who will interact here and now "on the ground" with the drivers of partners, taxi fleets, and local regulatory bodies," agreed Vitaly Bedarev, General Director of Citimobile.

At the same time, Didi's share in Russia will not grow without new solutions and interesting marketing ideas, Irina Zaripova added. Since the app's inception, users have noted problems with its maps and geo-positioning of ordering locations, she said.

Share in Yandex.Taxi
The decision by Didi is either political in nature or the Chinese company intends to buy the U.S. Uber's stake in their joint venture with Yandex, says Stanislav Shvagerus, head of the Taxi International Eurasia Forum's center of competence. According to him, a number of experts in the transport market are inclined to the second option. Uber now owns a 29% stake in MLU B.V., which develops cab ordering services, carsharing and scooter rentals under the Yandex.Taxi brand. At the same time, Didi and Uber have an agreement on strategic cooperation.

Izvestia's sources in the market have not confirmed that such an option is being discussed. In December 2021, when Yandex closed the first part of the deal to buy Uber's stake in other joint services, the Russian company said it had received an option to buy the remaining 29% stake in the joint venture over two years for $1.8-2 billion.

On March 1, Uber said it plans to exit the joint venture with Yandex as soon as possible, Bloomberg reported, citing a statement from the company. A representative of Yandex.Taxi declined to comment.

The representative of Uber only confirmed to Izvestia that "in the light of recent events" the company is actively looking for ways to expedite the sale of assets remaining in Russia and exclude representatives of Uber's management from the board of directors of the joint venture.

Photo:, RIA Novosti/Maxim Bogodvid

Back to list