Commentary
China’s largest ride-hailing service is currently being investigated by Chinese regulators. The accusations against Didi involve the illegal collection of users’ data. The app is no longer available for download in China. Shares in Didi have plunged by 20 percent.
The Chinese Communist Party’s (CCP’s) announcement came just days after Didi made its much-publicized Wall Street debut. The reasons for the announcement are clear, and I will discuss them later in this short piece. However, before delving into the timing of the announcement, it’s important to remember what Didi appears to be, and that’s an abuser of data. Both Tencent, owner of the heavily-monitored WeChat messaging app, and Alibaba own sizable stakes in Didi. Both companies have a history of shady data breaches and information mismanagement. Although Didi is synonymous with its domination of the Chinese market, it also operates in 14 other countries around the world, including Australia, Brazil, Japan, Mexico, and Russia. Last year, in Brazil alone, Didi Chuxing, the parent company of Didi, announced the completion of its one-billionth trip. So, if you happen to be a regular Didi customer, are there reasons for concern? Are there reasons to think that your data is being mismanaged? Considering there is an ongoing investigation, the answer is yes, and even if no investigation was taking place, the answer would still be yes.
More Than Meets the Eye
With Didi and the illegal collection of riders’ data, there are plenty of reasons for concern. As I have written elsewhere, officials in Beijing recently ordered China’s biggest tech companies to share their data with government insiders. With headquarters in Beijing, there is every reason to believe that Didi, one of the most popular apps in China, will end up sharing all of its data with Chinese officials. Perhaps it already does. According to the FBI, the Chinese regime uses “every tool” at its disposal, “including state-owned businesses, students, researchers, and ostensibly private companies, all in an attempt “to systematically steal information.” Why not use an app like Didi?But, even if the Chinese regime wanted to use Didi to harvest data, both domestically and abroad, how would this work? And what purpose would this data serve, anyway? With an individual simply ordering a ride from one place to another, what information is there to be exploited?
Such a mindset, though understandable, is dangerously myopic. When we think of apps like Uber and Didi, we think of them as singular entities. We see them as nothing more than ride-hailing providers. Uber, however, also offers services like food delivery, package delivery, courier services, freight transportation, as well as electric bicycle and scooter rental services. Uber is, first and foremost, a Big Tech company. Ride-hailing is just one string in its mighty bow.
The same goes for Didi. With 550 million users worldwide and tens of millions of drivers, Didi is much more than a popular ride-hailing app. Besides offering car rental services and food delivery options, the company is also, according to recent reports, aggressively researching “innovations like deep learning, machine learning, artificial intelligence and the Internet of Things.” Instead of viewing Didi as a one-dimensional island, it’s best to view it as an ever-expanding archipelago.
A smartphone shows the two apps, Kuaidi Dache–part-owned by Alibaba–and Didi Dache– backed by Tencent–which together control 99 percent of China's domestic market for booking taxis by smartphone, being display in Hangzhou, China's Zhejiang Province on Feb. 14, 2015. STR/AFP/Getty Images
The Misuse and Abuse of Data
When using apps like Uber and Didi, what information is required from a rider? Real-time location data and payment information, which usually involve access to credit card details. Such data, as obvious as it sounds, can be mishandled and exploited. More worryingly, apps like Uber and Didi, according to researchers at NortonLifeLock, a leading internet security firm, often “require the user to link to a social networking account, usually Facebook, as a way of verifying identity. By doing so, the user then grants that company access to the personal information that is in their Facebook account.”Furthermore, as the NortonLifeLock team warns, “if riders don’t turn off location access after completing their rides the app could potentially track and collect data around the clock on where the user is, where they go, and, sometimes, even how long they stay there.” In other words, a person’s whereabouts may very well be tracked for an indefinite period of time.
The Timing of the Announcement
The force with which the CCP cracked down on Didi was as swift as it was fierce. Why now? According to Kyle Bass, a hedge fund manager and vocal critic of the Chinese regime, the crackdown should be viewed as nothing less than a “big F-U to the United States.” Considering the ban arrived on Independence Day, the founder of Hayman Capital Management makes a very valid point.As Bass states, “the Chinese believe deeply in symbolism and numerology,” and that is why they chose to first take “US investor money,” then ban Didi on July 4th. With the abrupt announcement, plenty of American investors suffered financially, some severely so. What could or should be done? Bass believes that investors should be allowed to “rescind the transaction and recover their money.”
Will those who were scammed get the justice they deserve? Maybe. U.S. shareholders are now taking legal action against the Chinese company. For the sake of all American investors, let’s hope justice prevails. Because, as Bass so clearly outlined, the Didi debacle is a blatant “F-U” to the American people. Sadly, it wasn’t the first act of disrespect, and it certainly won’t be the last. Buyer beware!
John Mac Ghlionn is a researcher and essayist. His work has been published by the likes of the New York Post, Sydney Morning Herald, The American Conservative, National Review, The Public Discourse, and other respectable outlets. He is also a columnist at Cointelegraph.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
