Chinese ride-hailing giant Didi Chuxing could face tougher regulatory oversight that will make it more difficult to hire drivers and could lengthen customers’ waiting times in the wake of the death of a second passenger using its now-suspended carpool service, according to Reuters.
The company issued a groveling apology on Tuesday that echoed accusations made against Didi that it has prioritized growth over passenger safety. However, the company appears to have lost its halo as the home-grown “unicorn” startup that drove Uber from the Chinese market, and analysts expect the government to keep a closer eye on Didi in the future.
The killing of the passenger last weekend, which followed a similar incident in May, could even threaten the company’s dominance in China’s ride-hailing market—where Didi’s market share is 90%–and damage its plans to launch a giant initial public offering next year, where the company hopes to achieve a valuation of $56 billion.
“There is certainly room for others to serve the market, and such incidents expose an apparent weakness in Didi’s business model: aggressive expansion without adequate control of the integrity of the drivers on their platform,” said Bill Russo, head of consultancy Automobility Ltd.