Didi Chuxing is China’s ride-hailing company which is one of the most successful in terms of growth. It grew rapidly since its inception and follows a similar path to that of Ola. However, it is ten times bigger than Ola and has a lot of other businesses. It was founded in 2012 by Cheng Wei. In six years it has moved to six different countries and continues to operate in Mainland China. It has set foot in Japan as well which is another milestone for a Chinese company. Didi is one of the allies of OYO and it has helped the Indian company become what it is in China.
Didi, however, offers a lot of other business in comparison with other ride-hailing companies. It is one of those companies which is obsessed with Artificial Intelligence and autonomous technology. It is one of the most successful companies but is having a rough time as of now. The company is trying to cut down on its losses which have been amazingly risen from the last year. The company’s policy of growth has been hampered to a great extent. The company is trying to stop the losses and it is not able to do it.
Didi Chuxing has been facing losses for the past six years and they were under control. Even though the losses didn’t substantially increase the company took some steps upwards. That said, 2018 proved to be near-fatal for the company as its losses skyrocketed through the roof. The company was unable to retrieve most of its money lost and there was a huge problem. The CEO of the company Cheng Wei also said that the company is looking at tough times ahead.
Didi is planning to fire almost 2000 employees to cut down the losses. The company is ready to stop the progress in the ride-hailing business as it has stagnated and there is little growth. On top of that, there are very strict government regulations which it has to follow. Everything is coupled with lessening consumer demand. This made the company lose almost $1.6 billion in 2018 alone. The company is valued at $56 billion but it is still finding it hard to bring the losses down.
The first six months of 2018 saw it lose $590 million. These losses were increased by 334% from 2017 which is extremely high. That said, the company is also looking to hire 2500 employees. However, none of those employees will go into the ride-hailing part of the business and will enter the technology and offline market side of the company. This is where the Chinese cab-aggregator is looking to improve the numbers.
The company has also stopped its expansion plans as it might face existential problems if the company starts to lose money at this pace. The future of the company might be at stake and Chung Wei is aware of it. The company will look to find better solutions for the same as well.