Uber in China (C): The Cost of Success for Didi

On June 30, 2021, ride-hailing giant Didi Chuxing (Didi) raised $4.4 billion in its initial public offering (IPO) on the New York Stock Exchange (NYSE), the largest IPO of a Chinese company listed on an American exchange since Alibaba raised $25 billion in 2014. Celebration was short-lived. Two days after its IPO, the Cyberspace Administration of China (CAC), a government agency that regulates China's internet platforms, launched a national security probe into Didi's network security and ordered a comprehensive cybersecurity review.
Didi did not just end Uber's presence in China. With Uber gone, Didi's growth skyrocketed to become the largest online ride-hailing platform globally. How did everything change? Under Chinese President Xi Jinping, private companies faced emboldened regulators and increased government oversight. Was Didi's decision to move ahead with its IPO the correct business decision but the wrong political decision? What lessons could other Chinese tech companies learn from Didi's experience? How could Didi maintain its market position and rehabilitate its relationship with the Chinese government while local competitors tasted blood in the water?