Didi investigated by China’s cyberspace agency

Beijing-based Didi vehicle for hire firm has seen its shares fall after the Cyberspace Administration of China (CAC) announced it has started an investigation into China’s largest ride-hailing company.

The timing of the investigation comes at an unfortunate time for Didi, which launched an IPO a week ago valuing the business at $68 billion in the biggest listing on the New York Stock Exchange since 2014.

Often called China’s answer to Uber, Didi has more than 550 million users and tens of millions of drivers. The CAC say the investigation into Didi is to protect national security and the public interest. The business is not able to take on new users during the investigation process and the app has been taken down from app stores by CAC.

As part of its operations, Didi collects a huge amount of real-time data every minute, which it uses for a range of purposes including autonomous driving technologies and traffic analysis. Didi is not the only Chinese tech firm to face a regulatory crackdown with conglomerate Alibaba also dealing with major fines.

CAC said: “After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information.” Didi has openly said they expect the app removal to have a damaging impact on its revenue in China.

“The Company will strive to rectify any problems, improve its risk prevention awareness and technological capabilities, protect users’ privacy and data security, and continue to provide secure and convenient services to its users. Apart from the suspension of new user registration in China that was previously announced on July 2, 2021, and the app takedown in China as announced in this release, DiDi maintains normal operations globally,” Didi said in a statement.