By Dhirendra Tripathi
Investing.com – Didi Global ADRs (NYSE:DIDI) traded 1.6% lower in Thursday’s premarket after a report said the company has lost 30% of its daily users since July when the authorities in its home country began their crackdown on the company.
According to Aurora Mobile (NASDAQ:JG), a data solutions platform which researches the behavior of Chinese mobile users, Didi’s average daily user count fell to 10.9 million in August from 15.6 million in June.
A few days after the company listed on the NYSE on June 30, regulators in China banned the company from signing up new customers while they carried out a probe into its data handling practices. That exercise continues. Regulators also ordered app stores to remove 25 of Didi’s other apps.
The shares were issued to the public at $14 apiece and have rarely traded above that price. As per their Wednesday closing, they traded 69% below the issue price.
Based on its historical rate of sign-ups, the ban on opening new accounts is depriving Didi of about 4 million users every month.
A report in The Wall Street Journal in July said the regulators were miffed with the ride-hailing company as it had ignored their advice against going public pending their investigation.
Since the ban, authorities in China have further tightened rules governing the ride-hailing industry. The rules make it mandatory for companies to on-board only licensed drivers and stricter fines for non-compliance.