Research: Didi's average daily users for August fell to 10.9M, from 15.6M in June, after its NYSE IPO triggered a fierce backlash by Chinese regulators
Ryan McMorrow / Financial Times : Tweets: @michaelxpettis Tweets: Michael Pettis / @michaelxpettis : Didi's many competitors are spending heavily to expand their shares of the ride-hailing market as Didi's share fell by 40%. This is temporarily very good for drivers and customers, but I wonder how good it might be for equity investors. https://www.ft.com/...
Context & Ripple Effects
The arc here runs back to June: Didi listed on the NYSE after reportedly giving Chinese regulators the impression it would pause the deal while telling New York bankers it had a green light from Beijing. Within days, authorities opened a cybersecurity review that barred Didi from registering new users, freezing the top of its growth funnel at the exact moment the IPO put its numbers under public scrutiny.
The August user data is the first hard readout of what that freeze costs. A fall from 15.6M to 10.9M daily users — roughly a 40% share decline — matters because the coverage already flagged that Didi's competitors are spending heavily to absorb displaced riders and drivers, and because the company has since moved to lock down insider share sales amid a collapse of roughly $38B in market value.
First-order effects
- Didi's new-user registration ban turns the cybersecurity review into a direct demand shock: every rider who churns during the review period is revenue Didi cannot replace through acquisition, hence the 15.6M-to-10.9M daily-user drop and ~40% share loss.
Second-order effects
- Rival ride-hailing operators respond by spending heavily to capture the displaced riders and drivers, triggering a subsidy war that is temporarily excellent for drivers and customers — Michael Pettis's open question is whether it is good at all for equity investors funding both sides.
Third-order effects
- If the pattern holds, Beijing's playbook — punish a controversial overseas listing with an operational review rather than a fine — becomes the binding constraint on Chinese tech IPOs, pushing companies like Didi toward the Hong Kong listing path it was still pursuing years later when it reported two straight profitable quarters ahead of that debut.
The trend: China is demonstrating that regulatory action, not competitive spending, is now the fastest force capable of unwinding a dominant platform's market position — repricing cross-border listing risk for the entire sector.