Chinese taxi aggregator cuts staff in Russia

Chinese taxi aggregator cuts staff in Russia

Chinese taxi aggregator DiDi is downsizing its head office in Russia. This was confirmed by three sources in the taxi market. According to one of them, up to 90% of employees were laid off at the end of last year. Some of DiDi's former employees had turned to rival taxi aggregators for employment, said the sources close to the two taxi market players.
Irina Gushchina, PR-director of DiDi in Russia said only that the service continues to operate in almost 40 cities, without giving a substantive answer to other questions. Representatives of Yandex.Taxi and Citymobile's press service declined to comment. Maxim's press service stated that "if DiDi is indeed experiencing some difficulties, it is bad for competition and for the market as a whole".
How DiDi is developing in Russia
DiDi Mobility Rus was registered at the end of 2019. According to SPARK Service, 99.99% of the company is owned by Singapore-based DiDi Mobiliti Pte. and 0.01% by Hong Kong-based Travis International Group Hong Kong Limited. Revenue in 2020 was  RUB 183k, while net loss amounted RUB 703.45m. As of December 31, 2020 the average number of employees in DiDi Mobility Rus office was 15. The data for 2021 is not available yet.
DiDi began operating in the Russian market in November 2020. Kazan was its first city of presence. At the beginning of this year, the company had a presence in 16 cities, currently 37, including Perm, Kazan, Izhevsk, Ufa and Tyumen, according to its website. As of August last year, the company had 5 million customers and 100,000 drivers.
In spring last year, Daniel Petin, Chief Operating Officer of DiDi in Russia, told RBC TV that the aggregator would expand its presence to 100 cities in Russia by the end of 2021. Among others, the company was looking at Moscow and St Petersburg.
In the middle of last year, DiDi began actively recruiting drivers in Novosibirsk and put up posters about the imminent launch in the city. However, in December, a DiDi representative told local media that the aggregator had no plans to launch the service in the city.

Current problems of the company
One of RBC's interlocutors, citing a former DiDi employee, identified the problems faced by the aggregator's parent company during the past year as the reason for the cuts at the Russian office.
In the summer of 2021, DiDi held an IPO on the New York Stock Exchange (NYSE) and raised $4.4 billion. One American depositary receipt of the company was valued at $14 and the entire company at $73 billion.
However, Chinese authorities were against listing the company on the US exchange because of concerns that DiDi would share user data with US authorities. Almost immediately after the listing, Chinese authorities accused the service of violating the law on customer data collection and demanded that 25 of the company's mobile apps be removed from shops. China's State Administration for Market Regulation initiated an investigation against DiDi, suspecting that the company may have used non-competitive tools to drive smaller players out of the market. In mid-July, Bloomberg agency, citing its sources, reported that the company faces an unprecedented fine, which could exceed that previously imposed on Alibaba Group ($2.8 billion). All this news has significantly reduced the company's capitalization on the NYSE. On Tuesday, January 18, one receipt was trading at $4.8 and the market value of the company was about $23 billion.
In early December, DiDi announced that its board of directors had approved a delisting from the NYSE, with the conversion of the receipts into company stock to be traded on another international exchange. At the same time, the board instructed the company to list its shares on the Hong Kong Stock Exchange. According to South China Morning Post sources, DiDi's IPO on that exchange could take place in the second quarter of this year.
There are also claims against DiDi in Russia. Maksut Shadaev, Head of the Duma's Information Policy, Information Technology and Communications Committee, and Alexander Khinstein expressed concern about foreign expansion in the Russian taxi market and suggested limiting the operation of foreign services. At the same time it became known that Maxim taxi servie had complained to the Federal Antimonopoly Service (FAS) about DiDi, but the agency did not find any violation in the aggregator's actions. "Maxim tried to appeal against the decision in court, but failed. Maxim's press service said it did not agree with the court's verdict and would appeal against it.
In addition, in July, due to the fact that the app processes users' personal data abroad, DiDi was reportedly complained about by the National Taxi Council association. A spokesman of the association told RBC that inspections were still ongoing and information about them had not been disclosed.

Photo:, Zuma / TASS

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