Didi Global, a Chinese ride-hailing company, backpedaled on its announcement that it would stop its operations in Russia due to its invasion of Ukraine.
The company is currently under a cybersecurity investigation in Beijing. The initial decision of Didi Global about ceasing its operations in Russia came after several Western companies said that they would withdraw all operations in the country.
Didi Global to Continue Operations in Russia
In a post on Weibo on Saturday, Feb. 26, Didi Global wrote that the company would not shut down its operations in Russia. The company added that it would continue to operate in Russia and serve the country's drivers and passengers, according to SCMP.
This marked a U-turn for the company after announcing on Feb. 21 that it would exit Russia and Kazakhstan from Mar. 4 because of the changing market conditions and other problems that would prevent it from providing the best service for its customers.
Didi Global's sudden change of plan in Russia has fueled the rumors that it is currently under pressure because Beijing is opposing the economic sanctions against Moscow, according to Reuters.
Shirley Yu Ze, a political economist and senior practitioner fellow with the Ash Centre of Harvard Kennedy School, said that it would be plausible to assume that the Chinese state shareholders have been able to change the decision.
Yu said that a communique showed that the partnership between China and Russia has no defined boundaries.
The communique was released after Russian President Vladimir Putin and Chinese President Xi Jinping met during the Beijing Winter Olympics.
Yu added that Chinese foreign direct investment in Russia would be a massive indicator of this limitless partnership.
Although there is no evidence that political factors pushed Didi Global to change its decision to pull out of Russia, the company has been under pressure since 2021, just after its initial public offering of $4.4 billion in New York.
The Chinese company was said to have forced its way to an overseas listing after several warnings from Chinese market regulators over security issues, according to Protocol.
Didi Global Under Investigation
Cyberspace Administration of China, an internet watchdog, launched an investigation into Didi Global after its IPO, forcing the company to stop all of its sign-ups for new customers. This resulted in the apps being removed from the app stores.
In December 2021, Didi Global stated that it would begin delisting its stock from the United States for a listing in Hong Kong.
The company's payment options will be affected in Russia. It will strain its earnings after an agreement between the U.S. government and its Western allies to eject some Russian banks from the global payment system.
Aside from the financial services, the United States, the European Union, the United Kingdom, Canada, Taiwan, and New Zealand have initiated various sanctions targeting Russia's energy and transport sectors.
Didi Global posted a $285 million loss from its international operations in the third quarter of 2021, compared to a $4,590,000 million deficit from its domestic operations in the same period.
Aside from China and Russia, Didi Global operates in several countries across Central Asia, Asia-Pacific, South America, and Africa.
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Written by Sophie Webster
