Chinese ride-hailing giant Didi Chuxing reveals expenditure breakdown
Jun 05, 2019 (China Knowledge) - Didi Chuxing’s first-time public disclosure of its expenses breakdown reveals it is still losing money. On average, Didi made an average of 2 percent loss for each trip fare in the fourth quarter of 2018. The loss is filled with the capital Didi raised in previous funding.
Chen Xi, a representative from Didi Chuxing, said that the situation is not sustainable since the company may run out of money one day. However, this loss-making situation is common across the ride-hailing industry.
At the start of the year, Didi announced a large-scale restructuring of organizational structure in order to cut operation costs. Employees with overlapping job scopes and subpar performance were laid off. The overall layoffs accounted for 15% of the total staff, involving about 2,000 people.
Didi Chuxing’s accumulated loss in the past six years totaled about RMB 39 bln, and the overall net loss in the first half of 2018 was RMB 4.04 bln. In comparison, Uber and Lyft, the leading ride-hailing companies in the US, reported ratios of 22 per cent and 26.8 per cent respectively for net revenue as a percentage of total bookings in 2018
Didi is now under greater regulatory scrutiny and stepped up safety measures and driver background checks. After the deaths of two passenger last August, Didi has not restarted its car-pooling services.
Once ranked as the world’s most valuable Chinese start-up, Didi pulled back its plan to list in the Hong Kong Stock Exchange early last year. Since then, there has been no talk of any initial public offering.
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