The Rise and Fall of the World’s Ride-Hailing Giant

China’s leading ride-hailing company, Didi, was an operation of dubious legality when it raised its first big bucket of money nearly a decade ago. And in one way or another, it has been testing the authorities ever since.

When a venture capital firm invested $3 million in the company in 2012, Didi lacked several of the state-issued licenses it needed to do business, two people familiar with the matter said. When Beijing, Shanghai and other big cities began requiring that drivers for ride-hailing platforms be local residents, Didi protested. Today, the company acknowledges that many rides are still being provided by drivers and vehicles that don’t meet local requirements.

And when China’s government demanded that ride-hailing services share real-time trip data for safety purposes, Didi dragged its feet, citing privacy concerns — until the rapes and murders of two female passengers finally pushed the company to relent.

Didi and other Chinese internet giants grew big and powerful by learning to thrive in regulatory gray zones. And by and large, Beijing was fine with that. The companies were making China richer, more productive and better entertained. They moved fast, and they might have broken a few rules. But so long as online conversations were filtered, search results were sanitized and videos were censored, internet companies’ success was the nation’s.