Didi's big fine |
When China’s ride-hailing giant Didi Global Inc. was hit with a $1.2 billion fine last week, the reactions were mixed. On one side, global investors cheered the news, reading it as the conclusion of Beijing’s closely watched data security probe into the company.
Some of its users, however, began deleting the app from their phones.
Yukin Pang is one such former rider. Pang, a Shenzhen resident who used to book Didi taxis as frequently as five times a week, was shocked at the government report stating Didi illegally collected almost 12 million screenshots from users’ photo albums.
“Data security matters a lot to me,” Pang said. She uninstalled the app.
It’s a common misconception that Chinese citizens—who toil under arguably the world’s most comprehensive surveillance machine—are happy to give up personal privacy for the sake of convenience. Protests in the country have forced apps to issue apologies and change their practices, and helped spur the creation of the Personal Information Protection Law, which seeks to curb tech giants’ power to hoover up large quantities of sensitive user data.
In its statement last week, China’s cybersecurity watchdog said Didi illegally analyzed users’ travel history without their consent, collected copy-and-paste content from phones and gathered troves of sensitive information such as facial recognition data, home addresses and family relationships. CAC’s findings spooked Chinese riders; one question about the security risks posed by Didi’s facial data collection attracted more than a million views on the country’s question-and-answer site Zhihu.
The public skepticism is adding to an already very bad year run for the company.
Didi’s massive fine, coupled with the regulators’ report, is the culmination of a year-long investigation into the company that has cost it a jaw-dropping $60 billion. Beijing’s concern over Didi’s data privacy boiled over after the company listed on the New York Stock Exchange in 2021, and was was driven by concerns over the power of big data and private corporations. Quickly, Didi became a poster child for China’s tech crackdown.
Did is now a shell of its former self. Since its US delisting, Didi trades over the counter on the New York pink-sheets market: home to penny stocks and other riskier businesses. Sales dropped 13% to 40.8 billion yuan for the three months ended December, according to the company’s latest financial filing. And in addition to the more-than-billion-dollar fine leveled by the government on Thursday, regulators ordered Didi’s co-founders Cheng Wei and Jean Liu to pay 1 million yuan apiece. It remains unknown exactly when China’s government will allow Didi to resume signing up new users.
As Didi has struggled, rivals such as food delivery conglomerate Meituan and tech upstart T3 Mobility have ramped up efforts to lure away its users. Tencent Holdings Ltd.—Didi’s third-largest institutional shareholder after SoftBank Group Corp. and Uber—has also quietly launched an aggregated ride-hailing service through its messaging app WeChat, joining a growing list of companies seeking to challenge the status quo in China’s on-demand transportation market.
It’s unclear how many people in China have deleted Didi’s apps or reconsidered their reliance on them. Jack Meng, a frequent Didi customer in Beijing, shrugged off the question about Didi’s misconduct in personal information protection. “Pretty much every Chinese company is guilty on that front,” Meng told me, adding that he has no intention of stopping using Didi’s services.
For her part, Pang acknowledges that privacy issues are a universal problem in China, but said she still wants to make a gesture. And it helps that Didi’s competitors aren’t far behind.
Even before deleting the Didi app last week, Pang said she had increasingly switched to Meituan’s platform. Now, she solely counts on tech billionaire Wang Xing’s car-hailing business to help avoid the city’s overcrowded public transportation. “I don’t think I’ll ever regret deleting Didi,” she says. —Coco Liu