Didi Chuxing: Transforming Transportation in China
(9 pages of text)
Case (Pub Mat)
In August 2016, China’s home-grown ride-hailing company Didi Chuxing Technology Co., Ltd. (Didi) acquired the Chinese assets of Uber Technologies Inc. (Uber), including Uber China’s brand, business, and data. Didi had previously ventured into Uber’s territory by investing and collaborating with Lyft Inc., Uber’s main competitor in the United States. Didi’s transformation from its beginning as a humble mobile application into a technology giant that was re-shaping transportation both within and beyond China was related to significant transformations in its social and business context. These transformations included the rapid growth of China’s cities and China’s status as one of the first countries to formally recognize the legality of Internet-based private car services. Looking to the future, Didi faced questions about its development in a rapidly changing global digital economy: How could it expand its products and services to the international market? Could Didi achieve the same impressive market record abroad? How could Didi continue to innovate? What was a truly sustainable business model for an online ride-hailing firm? How could it maintain its current leading position in the market?
After working through the case and assignment questions, students will be able to do the following:
- Explain the effects of macro-level factors such as government policy and local labour markets on the business strategies of technology start-ups.
- Describe the platform-based business model, and explain its success and its improvement of same-side network effects and cross-side network effects.
- Recommend ways for Didi Chuxing to continue innovating and expanding in the global market.
Information, Media & Telecommunications
China, Large, 2016
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