Saturday, May 25, 2024

Chinese Uber rival revives UK launch plans

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Uber’s Chinese rival is laying the groundwork to enter the UK, three years after it was forced to suspend plans to launch in British cities.

Didi Global has acquired operating licences in cities including Rotherham, Rochdale and Salford in recent months in a move that would allow it to offer rides in Britain.

The company has also secured planning permission for offices, stating that it intends to run private hire operations from the building. 

It is understood that the company is not imminently intending to start offering rides in Britain but is keeping a skeleton operation running should it seek to revive plans in the future.

Didi entering the UK would mark a new challenge to Uber, which has been forced to grant workers’ rights to drivers and pay hundreds of millions in VAT to HMRC after court rulings in recent years.

Its Chinese rival made plans to start offering rides in the UK in 2021. At the time, MPs had raised concerns about whether the service would transfer users’ location data to China.

However, Didi suspended its launch plans and laid off staff amid a cybersecurity probe by the Chinese government, as first revealed by The Telegraph.

Its app was removed from Chinese app stores and the company was banned from signing up new users.

Didi’s move to list in New York also angered Beijing authorities and the company’s share price went into freefall amid the crackdown, before the company delisted in 2022

More recently Didi has focused on markets in Asia, Australasia and South America and is reportedly planning to list in Hong Kong this year.

However, Didi has continued to apply for licences in a way that would allow it to quickly start operating should it choose to expand. In 2022, it hired Matt Ratcliffe, a former executive at Addison Lee and taxi app Gett, and has secured planning permission for offices in Rochdale and Bolton.

Planning documents say the company plans to use the offices “for the purpose of undertaking the administrative functions of an app-based private hire vehicle operator”.

Demand for taxi apps is rising in Britain after operators overcame a driver shortage that pushed up prices in 2022. Uber’s UK sales grew to $6.2bn (£5bn) last year, up from $4.2bn the prior year, although employment and VAT changes have meant extra costs for the company.

Last month, Indian rival Ola shut down its UK operations, saying it wished to focus on its domestic market.

Uber has a stake in Didi worth around $2.2bn as a result of a deal in which the US company pulled out of China in 2016.

A Didi spokesman did not comment.

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