Eighteen months after its app in China was suspended, ride-sharing giant Didi returned on Monday. The move came as China showed signs of relaxing its extensive regulatory crackdown on the Internet sector over the past three years.
In July 2021, Chinese authorities ordered the country’s app stores to remove Didi, citing reasons the platform was “illegally collecting user data.” Earlier that same month, Didi went public in New York. It was a short-lived celebration for the company, which raised a hefty $4 billion from the first sale, as the event quickly turned out to be the root of its clash with Beijing.
Didi, according to multiple reports and an investor memo seen by TechCrunch at the time, failed to assure the government that its cross-border data practices were secure before going public in the US, where the data of hundreds of millions of citizens Chinese could supposedly come under scrutiny. The misstep led to a year-and-a-half security investigation by China’s main cyberspace watchdog.
It seems that Didi’s period of regret and rectification is over, as the company aware on Weibo on Monday afternoon:
“Our company has taken serious steps to cooperate with the country’s cyber security review, address security issues found in the investigation, and implement comprehensive rectifications.”
With the approval of the Cyber Security Review Bureau, a relatively new body appointed to address data security concerns raised by internet companies, Didi was allowed to resume new user registration for Didi Chuxing, its main transport platform, effective immediately.
In addition to a data refresh, Didi was also ordered to pay a $1 billion fine for breaking the rules. It finished delisting in the US in May last year and has been working to relist on the Hong Kong Stock Exchange, an increasingly preferable option for Chinese tech companies navigating growing tensions between the US and China.
Before the user registration relaunch, Didi users could still use the app if they already had it on their phones. But the app was besieged by hungry rivals. Alibaba-owned mapping service AutoNavi, for example, has been gaining ground as an aggregator for third-party ride-sharing services, including Didi.
The era of unbridled growth in the transport services sector is also gone. China has been tightening regulatory oversight over the new business in recent years, bringing it more in line with the traditional state-run taxi industry.
Following the regulatory review, Didi will surely be much more cautious about the government’s red line.
“In the future, the company will apply effective methods to ensure the security of platform infrastructure and big data to safeguard national cybersecurity,” he said in the Weibo post.
