The stock price of DiDi Global (OTC: DIDIY) does not reflect the intrinsic value of the business. An assessment of per-user, per driver and per-revenue-dollar value shows shares are worth between four and seven times their current price.

Business model and competitive advantages.

DiDi offers services including taxi-hailing, food delivery, intra-city freight, financial services, and vehicle services. The company is dominant in China and has a growing market share in Brazil and Mexico. Widely publicized regulatory issues in both the US and China temporarily moderated the company's growth and caused it to delist from the New York Stock Exchange.

Within a given urban agglomeration, network effects and economies of density favor the incumbent. To make a living, drivers need a large number of short rides while minimizing empty/unpaid miles. Drivers have a clear and compelling incentive to join the platform with the most users. The addition of food delivery and intra-city freight services boosts the network effects by helping drivers minimize empty (unpaid) miles and maximizing tips. Users, for their part, want quick and reliable service at a low cost. This will be found on the platform with the most drivers.

At different times during the week, the ride-hailing business is limited by low demand from riders or a shortage of available drivers. Both situations require a platform that efficiently balances supply and demand.

Ride-hailing platforms also serve as a mutually trusted intermediary, eliminating drivers' uncertainty about getting paid. For the rider, there is a basic level of assurance that any criminal intent on the part of the driver can and will be noted by the intermediary. These services are valuable to drivers, riders, and society as a whole. The alternative is picking up random strangers from the roadside.

DiDi is by far the largest company operating in the ride-hailing space. Its global peers include Uber (NYSE: UBER), Lyft (NASDAQ: LYFT), Grab (NASDAQ: GRAB), and Bolt. Uber leads the U.S. market, with Lyft as a credible challenger. In China, however, DiDi is the clear and unchallenged leader. The competitive overlap occurs mainly in emerging markets—most notably Brazil and Mexico. There, Uber and DiDi go head-to-head.

From a broader societal perspective, ride-hailing platforms do more than just move people around. They create flexible income opportunities for individuals who might otherwise struggle to find formal employment. Including refugees. These platforms also bring a level of accountability and traceability to a previously informal industry, while contributing meaningfully to local tax bases.

Valuation

In the words of Warren Buffett (Trades, Portfolio), "Price is what you pay, value is what you get." The stock market tells us the price every day, but how does the investor assess the value?

First we look at the value from a taxi driver's perspective. In the U.S., running a taxi costs about $250 per day. This includes expenses like insurance, maintenance, fuel (roughly $30), and driver pay (around $130). Considering the added value of a ride-hailing app, the app should be worth at least $250 per month. Without it, drivers might wait 30 minutes at the airport just to pick up a downtown-bound traveler—often returning empty because they can't find another passenger willing to hop into an unknown cab.

The other option is cutting a deal with a nearby hotel, which usually comes with its own costs. Either way, $250 is a meaningful—but manageable—slice of their monthly expenses. If the app also brings in food delivery orders, it helps further eliminate empty rides and boosts tips. Drivers can still line up at the airport or work hotel deals if they want. But when things go quiet, they flip on the app and pick up what's available. Yes, they give up 10–25% of their fare. That hurts but it beats circling the block hunting for the increasingly rare passenger who hasn't already booked through an app.

At that rate, an investor willing to pay $ 20,000 to “capture” the services of a driver, gets their money back in seven years. This is the bull case for Uber at its current market capitalization of $165 billion. The numbers show that bookings per driver, through Uber, are about $1,650 a month. Uber takes 15-25% of that. On average, Uber drivers are indeed paying about $250 per month for the app. These numbers include a mix of full-time, part-time, and occasional drivers across the ride-hailing, delivery, and freight services.

The market offers us a perpetual claim of 20% on the earnings of an Uber driver for $20,000. A claim on the income of a DiDi driver costs $650. Yes, investors in DiDi get the services of thirty drivers for the price of one Uber driver.

Drivers are not created equal across markets. In dollar terms, DiDi needs more drivers in China or Brazil to generate the same fees as Uber generates from a single driver in the U.S. or Germany. While there is more to this than meets the eye, it is reflected in DiDi's lower per-driver Gross bookings. Adjusted for the dollar value of driver earnings, investors in DiDi get the benefit of seven drivers for the price of one Uber driver.

If the bull case for Uber makes any sense and the owners of Uber do indeed get their money back in seven years, then DiDi owners get their money back in one.

That is a bargain.

In the words of Charlie Munger, “Invert, always invert.” In that spirit, I started asking regular ride-hailing users how much money it would take for them to give up their favorite app—forever. To my surprise (chalk it up to being a bit out of touch), none of the people who use a ride-hailing app more than once a month were even willing to consider it for less than $500. Most didn't start taking the question seriously until the number hit $1,500. Interestingly, I also found that frequent users tend to keep two apps on hand. They switch between them depending on the situation.

Where I live, $500 is about 1% of per-capita GDP. That suggests the franchise value of a regular user in a country like Brazil or China might be closer to $120.

For context, in 2024, Grab spent around $1.3 billion on incentives in Indonesia and Malaysia. This brought in 10 million new users. That comes out to $130 per user—right in line with what users themselves say the service is worth. Clearly, Grab's management believes that's a price worth paying to win Asian customers.

Investors in DiDi today are paying $30 per active user.

That is a bargain.

We have now looked at the value of the app from both the driver's and the rider's perspective as well as replacement value. All estimates of intrinsic value come with a wide margin of error. Still, each approach points to the same conclusion: DiDi appears to be worth somewhere between four and seven times its current market price.

Addressable market and Profitability

In China, DiDi's growth strategy hinges on onboarding new drivers in smaller cities where ride-hailing hasn't yet gone mainstream. The company starts by offering the app at little or no cost to both drivers and passengers. Once adoption takes hold, it gradually raises its commission—or "take rate." Chinese regulators don't cap this rate, but they do require transparency. DiDi complies by displaying the commission cut on every ride. Tthe average take rate is 21%—about four percentage points lower than Uber or Lyft.

So, if the model is so compelling, why are DiDi's reported profits modest? The short answer: Companies like DiDi and Uber spend heavily to capture market share. How much, exactly?

Both Uber and DiDi have reported spending 5–7% of gross transaction value (GTV) on incentives. Grab reported spending $1.3 billion in 2024. That is 7% of its $18 billion GTV.

Applying this math to DiDi and backing out 4% of GTV as growth-related expense gives us estimated "run-rate" owner earnings of around $2.2 billion. That's $0.50 per ADR.

For context, DiDi added 90 million users in 2024. Allocating $2 billion to growth implies a customer acquisition cost of just $25 per user—less than a quarter of what Grab spends. Either my estimate of growth expense is too low and true owner earnings are higher, or DiDi is phenomenally efficient at customer acquisition.

According to Robert Vinall, DiDi should be able to raise take-rates to 29%, implying untapped pricing power of roughly 8% relative to current take-rates.

Stock Exchange Listings and ADS Structure

In June 2021, DiDi Global listed its American Depositary Shares (ADSs) on the New York Stock Exchange (NYSE) under the ticker symbol "DIDI". Each ADS represents four Class A ordinary shares of the company.

The ADSs are sponsored by Deutsche Bank Trust Company Americas, which acts as the depositary bank. In a sponsored ADS arrangement, Deutsche Bank manages the issuance, record-keeping, dividend distribution, and investor communications, providing a transparent bridge between DiDi and its U.S. investors.

Following regulatory challenges in China, DiDi announced plans to delist from the NYSE and pursue a listing on the Hong Kong Stock Exchange. Currently, DiDi's ADSs trade over-the-counter (OTC) in the United States under the symbol "DIDIY". They are also accessible on several European exchanges, including Frankfurt (ticker: 92S), Berlin, Munich, and Stuttgart. These European listings give investors alternative access to DiDi shares, albeit through the same ADS structure.

Risks: Cybersecurity, Regulatory Pressure, Robotaxis and Delisting

DiDi presents a strong investment case—but it is not without risks.

One concern is the potential for further regulatory pressure. While the stock already trades over-the-counter (OTC), additional political tension could make it harder for American investors to hold shares in Chinese firms. This wouldn't alter DiDi's underlying business, but it could increase volatility and reduce liquidity. That said, the structure behind the ADRs is worth understanding: Deutsche Bank holds the underlying shares directly, and if U.S. regulators push for delisting, the bank can shift the ADRs to Frankfurt or convert them into global depositary receipts (GDRs). That might cause temporary dislocation—some forced selling or halted trading—but it doesn't change the fundamentals.

It's also worth noting that DiDi has announced plans to list in Hong Kong, where there's likely to be stronger institutional demand for Chinese tech.

Another area to watch is labor classification. If regulators—either in China or elsewhere—determine that ride-hailing drivers must be treated as employees instead of contractors, DiDi's costs would rise. That would push up ride prices, but it wouldn't necessarily make the platform less appealing. If anything, it raises the barriers to entry, making DiDi's incumbency even more valuable.

Cybersecurity, however, is the big one—and it's rarely discussed in investor circles. In my view, it's the most serious risk to DiDi's long-term value. Think about it: your ride-hailing app knows where you live, what you eat, where you eat when you are not home, when you're out of town and where your spouse sleeps when you are out of town. Imagine having that kind of data on 3,000 members of the Chinese National Congress. You can be sure MI5 would love access to DiDi's logs. Mossad would certainly have an interest in Iran's Snapp data. North Korea's hackers would no doubt target Uber's infrastructure in Washington. The list goes on.

The Chinese government recognized this risk early and responded decisively. Many Western investors interpreted the Chinese government's actions as political meddling or part of a broader power struggle. That may or may not be the case but from a purely rational standpoint, the move makes perfect sense. Ride-hailing platforms are critical infrastructure. Their cybersecurity needs to be treated as such. In my view, this is the key risk that could truly threaten the value of the DiDi franchise. Long-term investors should be relieved that the issue has been addressed and that stricter regulations make it even harder for new entrants.

Stricter regulations, while troublesome, create greater barriers to entry. Just look at Bolt. Back in 2013, a teenager in Estonia launched a simple ride-hailing app and gave it away to local drivers and riders. It worked. Bolt is now active across Europe and parts of Africa. But imagine a company like Apple trying to do the same thing today. Technically, it's trivial. But once regulators step in and say, “Welcome to the world of employment law—you've just inherited 30 million workers in 100 jurisdictions,” the game changes. Tthat's before governments in China or the EU raise concerns about a U.S. company collecting intimate location data on their citizens. What that Estonian teenager pulled off in 2013 would be hard for Tim Cook to replicate today.

Autonomous vehicles inevitably come up in any conversation about the future of ride-hailing. While removing the driver changes the cost structure, it doesn't eliminate the need for a platform. You still need a system to manage the sharp swings in supply and demand that occur over the course of a week. And let's not forget the practical challenges: urban residents will not welcome fleets of idle driverless cars clogging parking spaces and adding to congestion. The owners of these vehicles, meanwhile, will still want to maximize their utilization. That coordination function doesn't go away.

Management and Major Investors

SoftBank, through its Vision Fund, has been a significant investor in the ride-hailing industry, holding stakes in multiple companies such as DiDi, Uber, Grab, and Ola.

SoftBank, through its Vision Fund, has long been a major force in the ride-hailing industry, with stakes in DiDi, Uber, Grab, and Ola. It partnered with DiDi to invest $2 billion in Grab, Southeast Asia's leading platform, and was instrumental in DiDi's acquisition of 99 in Brazil—a move that expanded DiDi's international footprint. Through these interconnected investments, SoftBank has positioned itself as a central player in shaping the future of global mobility.

Another noteworthy investor in the region is the Matthews Pacific Tiger Fund (Trades, Portfolio). In recent months, they have been trimming positions in Alibaba and TSMC while increasing their exposure to DiDi—a telling signal of where they see long-term value.

Like many publicly-traded Chinese firms, DiDi employs a dual-class share structure. There are two types of shares: Class A, which carry one vote each and are mostly held by public investors, and Class B, which carry ten votes per share. These are concentrated in the hands of insiders. Cheng Wei, DiDi's founder and chairman, owns a relatively small slice of the company's equity—but thanks to his Class B holdings, he maintains effective control over the company's direction.

This setup allows Cheng to block any major changes he disagrees with. Rightly or wrongly, some investors see that as a red flag and apply a “China Discount”. But through a long-term lens, it also offers continuity and resilience. DiDi can pursue difficult markets, withstand regulatory shocks, and continue investing even during downturns—without being distracted by the mood swings of the stock market. The facts matter. Cheng Wei has created billions of dollars of value for fellow shareholders under some of the most challenging conditions imaginable. While western investors have created huge swings in the stock price, Cheng has consistently kept his head down and stuck to building the business.

Conclusion

DiDi's current stock price doesn't reflect its intrinsic value, especially considering its vast user base, strong revenue growth, and dominant position in China. On a per-user, per driver and per-dollar-of-revenue basis, DiDi is a clear bargain.

The company's strategic partnerships, network effects, economies of scale, global expansion, strong recovery from regulatory setbacks, and support from heavyweight investors like SoftBank further fortify the investment thesis. Known risks such as potential delisting and regulatory pressure surrounding labor classification may affect the stock price but do not negate the value of the franchise.

For investors willing to be patient and think independently, DiDi presents a compelling and overlooked opportunity.

Further reading

Robert Vinall's letters – March 2025 discusses DiDi and other Chinese companies.

Ride hailing from the viewpoint of a driver.

DiDi reports and presentations.

Those are my thoughts. Let me know what you think in the comment section.