Didi Chuxing would continue subsidising rides

Didi Chuxing

Didi Chuxing, the Chinese ride-hailing group, said it would continue subsidising rides “for the foreseeable future”, despite this week’s merger with rival Uber aimed at staunching losses from a long-term price war. The policy spells an about-face from statements last month when Didi said it would axe discounts in several cities — subsidies that fuelled a two-year battle for market share that has cost Didi and Uber China billions of dollars in losses. The continuation of subsidies spells bad news for Didi’s financiers, who were keen to see the merger with Uber China — in which the San Francisco-based ride-hailing app took a 20 per cent interest in the Chinese local champion — put an end to subsidies. The price war between Didi and Uber, which saw both sides pay drivers subsidies of up to three times the cost of the normal ride fare, cost Uber $1 billion last year and is likely to have cost Didi a similar amount.
Charles Clover