China's Didi says ride-hailing app takedown could hurt revenue

The removal of Didi's app comes days after Didi made its trading debut on the New York Stock Exchange. PHOTO: REUTERS

BEIJING (REUTERS, BLOOMBERG) - China's biggest ride-hailing firm Didi Global said on Sunday (July 4) that the removal of its "DiDi Chuxing" app from smartphone app stores in China is expected to have an adverse impact on its revenue.

Earlier on Sunday, China's cyberspace regulator ordered app stores to stop offering Didi's app after finding that the company had illegally collected users' personal data.

"The company expects that the app takedown may have an adverse impact on its revenue in China," the company said in a statement.

The removal of Didi's app, which does not affect existing users, comes days after Didi made its trading debut on the New York Stock Exchange in an initial public offering that raised US$4.4 billion (S$5.9 billion).

In a June filing, Didi reported revenue of about 42.2 billion yuan (S$8.8 billion) for the three months ended March 31.

Of that, 39.2 billion yuan came from its China mobility division while about 800 million yuan came from its international business.

Didi has a dominant position in the online ride-hailing business in China and operates in 4,000 locations across 16 countries.

Didi said it will strive to rectify any problems and will protect users' privacy and data security.

Since late last year, Chinese Internet regulators have cracked down more sharply on the country's tech giants for violations of rules.

The Global Times, a tabloid published by the ruling Communist Party's official People's Daily newspaper, said in a Chinese-language commentary on Monday that Didi's apparent "big data analysis" capability could pose risks to the security of individuals' personal information.

"No Internet giant can be allowed to become a super database of Chinese people's personal information that contains more details than the country, and these companies cannot be allowed to use the data however they want," Global Times said.

To protect personal data as well as national security, China must be even stricter in its oversight of Didi's data security, given that it is listed in the United States and its two largest shareholders are foreign companies, it added.

While it is not clear how Didi illegally collected personal data, companies should gather the least amount of information required for their services, the newspaper added.

SoftBank Group owned roughly 20 per cent of the firm following the listing, while Uber Technologies owned about 12 per cent, according to an earlier Didi filing. Founder Cheng Wei owns about 6.5 per cent, just ahead of the 6.4 per cent held by Tencent Holdings.

Didi gathers vast amounts of real-time mobility data everyday. It uses some of the data for autonomous driving technologies and traffic analysis.

In its IPO prospectus, Didi said "we follow strict procedures in collecting, transmitting, storing and using user data pursuant to our data security and privacy policies".

A senior Didi executive said on Saturday that the company stores all China user and roads data at servers in the country and it is "absolutely not possible" that it passed data to the US.

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