China's ride-hailing giant expands to Sydney
With the coronavirus hurting business in China, Uber competitor Didi Chuxing looks overseas for growth
Didi Chuxing, China’s largest ride-hailing service provider, is stepping up growth initiatives overseas with the launch of new operations in Sydney, as the coronavirus outbreak slows down expansion in its home market.
Beijing-based Didi will start operations in Australia’s most populous city and largest ride-hailing market from March 16, according to the company. Didi, which entered the country in May 2018, currently operates in seven cities across four states.
“Didi’s driver-partners have served over 2 million riders across Australia,” said Lyn Ma, general manager of Didi Australia in a statement on Monday. “Introducing our services to the global economic and cultural hub of Sydney is a major milestone for our young team here.”
The company’s continued international expansion comes amid its industry’s difficulties in China, the world’s biggest ride-hailing market, where the coronavirus outbreak has led to a slowdown in demand.
Earlier this month, there were reports of multiple drivers being diagnosed with coronavirus, clouding prospects for an industry already hit hard by government-imposed travel restrictions across the country.
“The coronavirus outbreak will have a negative impact on China’s ride-hailing industry,” said Sun Naiyue, an analyst at research firm Analysys, who covers China’s broader mobility sector. “Because of the home quarantine orders and suspension of work, overall domestic demand is expected to shrink in the first quarter.”
The governments in Beijing and Shanghai recently announced measures to contain the spread of the coronavirus on taxi and ride-hailing services. Drivers have been directed to wear face masks, open the window after each ride and disinfect their vehicles regularly.
Such precautionary measures have gained urgency as cases of coronavirus infection have surpassed 70,000 and fatalities have reached more than 1,700 on the mainland.
“Although ride-hailing fares count as low-density compared to public transport, the slowdown in demand will affect all players in China,” said Sun of Analysys.
Unlike other ride-hailing app operators on the mainland, Didi’s advantage is that it has established an international footprint for its business. Apart from Australia, the company also does business in Brazil, Chile, Colombia, Japan and Mexico.
The company also has stakes in ride-hailing platforms Grab and Ola in Asia, Lyft in the United States, Taxify in Europe and Careem in the Middle East.
It offers a full range of app-based transport services for 550 million users across China and its overseas markets. Tens of millions of drivers who find flexible work opportunities on the Didi platform provide more than 10 billion passenger trips a year, according to the company.